Document OEKgoGMaBq16wq8KwL0vJxaYw

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION6 1201 ELM STREET, SUITE 500 DALLAS, TEXAS 75270-2102 May 12, 2022 TRANSMITTED VIA E-MAIL Mr. Blaine Haag Calgary Energy, LLC 20565 East Clear Brook Rd. Owasso, OK 74055 bhaag.calgarvenergyllc@gmai I.com Re: Final Administrative Order Well Number: W2 EPA Inventory ID: OS 1094000 Docket Number: SDWA-06-2022-1102 Dear Mr. Haag: Attached is a Final Administrative Order (Final Order) issued by the United States Environmental Protection Agency (EPA), to Calgary Energy, LLC (Respondent) for violation ofthe Safe Drinking Water Act (SOWA). The Final Order requires the Respondent to comply with the regulatory requirements specified in the Final Order. EPA requests that the Respondent immediately confinn receipt of this e-mail and the attached Final Order by a response e-mail to aguinaga.david@epa.gov. The violation of the SOWA was identified through a review of files that EPA maintains on the referenced injection well. The violation was for failing to successfully demonstrate mechanical integrity and maintaining the injection well in a manner that could allow the movement of fluid that contains contaminants into an underground source of drinking water (USDW). The Final Order does not assess a monetary penalty; however, it does require compliance with SOWA requirements and specifies deadlines for compliance. The Final Order requires the Respondent to comply with certain SOWA regulatory requirements. Please be aware that failure to comply with the Final Order may subject the Respondent, to additional enforcement action by EPA, including the initiation of legal proceedings to seek monetary penalties. The effective date of the Final Order is thirty (30) days after issuance unless an appeal is taken pursuant to Section 1423(c)(6) of the Act, 42 U.S.C. 300h-2(c)(6). The SOWA provides that you may file an appeal of the Final Order with the United States District Court for the District of Columbia or the district in which the violations occurred. Such appeal must be filed within 30 days after the Final Order is issued. If you file an appeal, you must simultaneously send a copy of the appeal by certified mail to the Administrator of the Environmental Protection Agency and to the United States Attorney General. Re: Calgary Energy, LLC 2 SDWA-06-2022-1102 Also enclosed is an " Information Sheet" relating to the Small Business Regulatory Enforcement Fairness Act and a ''Notice of Registrant' s Duty to Disclose" relating to the disclosure of environmental legal proceedings to the Securities and Exchange Commission. The EPA is committed to ensuring compliance with the requirements of the Underground Injection Control program, and my staff wi II assist you in any way possible. If you have any questions regarding this matter, please contact Mr. David Aguinaga at (2 14) 665-6439. Sincerely, Digitally signed by CHERYL ~lIA~L rj .,{,, . ~ SEAGER - - ~(J. . ~ Dote : 2022.05.12 16:50:33 -05'00' Cheryl T. Seager, Director Enforcement and Compliance Assurance Division Attachments ec: Ms. Jann Hayman, Osage Nation Department ofNatural Resources Director jannhayman(@,osa2:e nati o n-nsn .gov Ms. Robin Phillips, Osage Agency BIA Superintendent robin.phillips@bia.gov ... .., : ;- ., r-'" t,..;... ~ 1 ~n. j ,. 6 UNITED STATES ENVIRONMENTAL PROTECTION ACENCY U REGION 6 D~llas, Texas 75270 22 MAY I G AH 11: 02 In the Matter of Calgary Energy, LLC. Respondent. ;: E:C1).,;; _ Hu\Rli,G CLERK EPA REGION Vl Docket No. SDWA-06-2022-1102 FINAL ADMINISTRATIVE ORDER STATUTORY AUTHORITY The following findings are made, and Final Administrative Order issued, under the j authority vested in the Administrator of the U.S. Environmental Protection Agency (EPA) by Section 1423(c) of the Safe Drinking Water Act (the Act), 42 U.S.C. 300h- 2(c). The authority to issue this Final Administrative Order has been delegated by the Administrator to the Regional Administrator of EPA Region 6 who further delegated such authority to the Director of the Enforcement and Compliance Assurance Division. The EPA has primary enforcement responsibility for underground injection within the meaning of Section 1422(c) of the Act, 42 U.S.C. 300h-l (c), to ensure that owners or operators of Class 11 injection wells w ithin Osage County, Oklahoma, comply with the requirements of the Act. FINDINGS I. Calgary Energy, LLC. (Respondent) is a corporation doing business in the State of Oklahoma and, therefore, is a "person," within the meaning of Section 140I (12) of the Act, 42 U.S.C. 300f(l2). 2. At all times relevant to the violations alleged herein, Respondent owned or operated an "injection well" which is a "Class II well" as those tenns are defined at 40 C.F.R 147.2902. The injection well is located in the NW Quarter of Section 26, Township 24 North, Range 08 East, Osage County, Oklahoma, designated as Well No. W2 and EPA Inventory Number OS I094000 (the injection well). S O WA-06-2022- 1102 Page 2 3. Respondent is subject to underground injection control (UIC) program requirements set forth at 40 C.F .R. Part 147, Subpart GGG, which are authorized under Section 1421 of the Act, 42 U.S.C. 300h. 4. Regulations at 40 C.F.R. I47.2903(a) require that any underground injection is prohibited except as authorized by rule or authorized by a permit issued under the UIC program. The construction or operation of any injection well required to have an EPA UIC permit is prohibited until the permit has been issued. The term "permit" is defined at 40 C.F.R. 147.2902. 5. Regulations at 40 C.F.R. 147.2903(6) provide that no owner or operator shall construct, operate, maintain, convert, plug, or abandon any injection well, or conduct any other injection activity, in a manner that allows the movement of fluid containing any contaminant into underground sources of drinking water, if the presence of that contaminant may cause the violation of any primary drinking water regulation under 40 C.F.R. Part 142 or may otherwise adversely affect the health of persons. 6. Regulations at 40 C.F.R. 147.2909 provide that existing injection wells (wells authorized by the Bureau of Indian Affairs and constructed or completed on or before the effective date of the Osage UIC program) are authorized by rule (ABR). Owners or operators of injection wells authorized by rule must comply with the provisions of 40 C.F.R. 147.2903, 147.2905, 147.2907, and 147.29 10 through 147.2915. 7. Regulations at 40 C.F.R. 147.2912(a) require each ABR injection well to have mechanical integrity. An injection well has mechanical integrity if there are no significant leaks in the casing, tubing, or packer and there is no significant fluid movement into the "Underground Source of Drinking Water" (USDW) through vertical channels adjacent to the wellbore. The term USDW is defined at 40 C.F.R. 147.2902. SDWA-06-2022-1102 Page 3 8. The inj ection well is authorized by rule in accordance with 40 C.F.R. 147.2909. 9. Pursuant to 40 C.F.R. 147.29 I2(a)( I)(i), a pressure test of the injection well casing/tubing to at least 200 psi shall be conducted at five-year intervals for the li fe of well . I0. Regulations at 40 C.F.R. 147.2905 require that the injection well must be plugged within one year of term inat ion of injection. All injection wells must be plugged to prevent movement of fluid into a USDW. 11. On or about June 3, 2020, the EPA became aware that the injection well lost mechanical integrity and was purging produced water to the surface around the outside of the well casing. 12. On June 17, 2020, EPA received a copy of an Emergency Workover Permit issued by BIA Osage Agency. On August 12, 2020, EPA issued plugging approval for the injection well. 13. On August 12, 2020, EPA approved a plugging plan for the injection well. 14. A recent file rev iew indicates the injection well has not successfully demonstrated mechanical integrity. It has not been plugged nor converted to production use. 15. Therefore, Respondent violated regulations set forth at 40 C.F.R. 147.2903(b), 147.2909 and 147.29 12(a) by maintaining the injection well in a manner that could allow the movement of fluid that contains contaminants into an USDW and by fa iling to successfully demonstrate mechanical integrity. 16. Pursuant to Section 1423(c)(3)(A) of the Act, 42 U.S.C. 300h- 2(c)(3)(A), on March 3, 2022, EPA issued a Proposed Administrative Order to Respondent and provided Respondent an opportunity to request a hearing on the Proposed Administrative Order. 17. On March 10, 2022, EPA provided public notice of its proposal to issue an order for compliance in this matter in accordance with Section 1423(c)(3)(B) of the Act, 42 U.S.C. 300h2(c)(3)(B). SDWA-06-2022-1102 Page4 18. Respondent did not request a hearing and EPA did not receive any public comments on the Proposed Administrative Order. SECTION 1423(c) COMPLIANCE ORDER 19. Based on the foregoing findings, EPA Region 6 hereby orders Respondent to: a. Cease use of the injection well for the unauthorized underground injection of fluids, and b. Take one of the following actions: 1. Repair the injection well and successfully demonstrate mechanical integrity according to regulations at 40 C.F.R. I47.29 l2(a) within ninety (90) days after the effective date of this Final Administrative Order; or 11. Complete proper plugging and abandonment in accordance with 40 C.F.R. 147.2905, w ithin ninety (90) days after the effective date ofthis Final Administrative Order; or 111. Convert the injection well to production use within ninety (90) days of the effective date of this Final Administrative Order. 20. Submit copies ofcompleted plugging reports or completed work reports showing conversion to production and BIA Osage Agency Forms I39 within one-hundred twenty (120) days after the effective date of this Final Administrative Order to: David Aguinaga aguinaga.david@epa.gov U.S. Environmental Protection Agency Water Enforcement Branch (ECDWE) 1201 Elm Street, Suite 500 Dallas, TX 75270-2102 SDWA-06-2022-1 !02 Page 5 GENERAL PROVISIONS 21. Respondent may appeal this Final Administrative Order to Federal District Court pursuant to Section 1423(c)(6) of the Act, 42 U.S.C. 300h-2(c)(6). 22. This Final Administrative Order does nqt constitute a waiver, suspension, or modification of the requirements of 40 C.F.R. Parts 144, 146, and 147, Subpart GGG, which remain in full force and effect. 23. Issuance of this Final Administrative Order is not a n e lection by EPA to forego any civ il or crimina l action otherwise authorized under the Act. 24. Violation of the terms of this Final Administrative Order after its effective date or date of fi nal judgment as described in Section 1423(c)(6) of the Act, 42 U.S.C. 300h-2(c)(6), may subject Respondent to furth er enforcement action, including a c ivil action for enforcement of this Fina l Administrative Order under Section 1423(b) of the Act, 42 U.S.C. 300h-2(b), and civil and criminal penalties for vio lations of the compliance terms of this Final Administrative Order under Section 1423(b)( I) and (2) of the Act, 42 U.S.C. 300h-2(b)( I) and (2). TAX IDENTIFICATION 25 . For purposes of the ide ntification requirement in Section 162(f)(2)(A)(ii) of the Internal Revenue Code, 26 U.S.C. I62(f)(2)(A)(ii), and 26 C.F.R. I. 162-21 (b)(2), performance of Paragraphs 19 and 20 is restitution, remediation, or actions required to come into compIiance with the law. SDWA-06-2022-1102 Page 6 EFFECTIVE DATE 26. This Final Administrative Order becomes effective thirty (30) days after issuance unless an appeal is taken pursuant to Section 1423(c)(6) of the Act, 42 U.S.C. 300h- 2(c)(6). May 12, 2022 Date ~ I\ A,,,.J-v".- Digitally signed by CHERYL " ~t) SEAGER Date:2022.05.1216:49:36-0S'00' Cheryl T. Seager, Director Enforcement and Compliance Assurance Division Docket No.: SDWA-06-2022-1102 Page I of I CERTIFICATE OF SERVICE I certify that the foregoing Final Administrative Order was sent to the following persons, in the manner specified, on the date below: Signed Original E-mailed: Regional Hearing Clerk (R6ORC) U.S. EPA, Region 6 120 I Elm Street, Suite 500 Dallas, TX 75270 vaughn.lorena@epa.gov File Stamped Copy Transmitted via Email: Mr. Blaine Haag Calgary Energy, LLC 20565 East Clear Brook Rd. Owasso, OK 74055 bhaag .calgaryenergyllc@gmail .co m Elect ronic Copy: Ellen Chang-Vaughn David Aguinaga U.S. EPA, Region 6 120 I Elm Street, Suite 500 Dallas, TX 75270 Chang-Vaughan.Ellen@epa.gov; aguinaga.david@epa.gov Ms. Robin Phillips, Superintendent Bureau of Indian Affairs Osage Agency P.0. Box 1539 Pawhuska, OK 74056 robin.phillips@bia.gov Ms. Jann Hayman, Director Osage Nation Department of Natural Resources I00 W. Main, Suite 304 Pawhuska, OK 74056 jannhayman@osagenation-nsn.gov Dated: 5/18/2022 David Aguinaga