June 14, 2006

Gary Baughman

Director

Hazardous Materials and Waste

Management Division

4300 Cherry Creek Drive South

Denver, CO. 80246-1530

Steve Gunderson

Director

Water Quality Control Division

4300 Cherry Creek Drive South

Denver, CO- 80246-1530

Margie Perkins

Director

Air Poi.lution Control Division

4300 Cherry Creek Drive South

Denver, CO 80246-1530

Brian Macke

Director

Oil and Gas Conservation Commission

Colorado Department of Natural Resources

1120 Lincoln Street, Suite 801

Denver, CO 80203

Re: Disclosure of chemicals used in all phases of oil and gas

development

Dear Directors Baughman, Perkins, Gunderson and Macke:

I am writing on behalf of the San Juan Citizens Alliance, the Western

Colorado Congress, Grand Valley Citizens Alliance, Western Slope

Environmental Resource.Council and the Oil & Gas Accountability Project

(OGAP) to make two requests. First, the groups request that your.agencies

1

P.O. Box 1102 / Durango, CO 81302 J P 970-259-3353 F 970-259-7514 ~ www.oKap.orK

HESI300423
require the disclosure of the complete make-up and volumes of the

chemicals in products used in all phases of oil and gas development.

Second, where potentially toxic chemicals are used during oil and gas

exploration and development operations, the groups believe that monitoring

for the levels and effects of these chemicals should be required by your

agencies.

Reasons for requiring disclosure and monitoring

The groups believe such complete disclosure and monitoring

requirements are necessary for a number of reasons.

1. Toxic chemicals with known health effects are beinq used.

Many of the products used in the exploration, drilling and production

phases of Colorado’s natural gas and oil industry are made up of toxic

chemicals with known human health effects. Without regulators requiring oil

and gas companies to disclose the complete make-up and volumes of

chemicals in the products they use, a realistic evaluation of their immediate

and long-term effects on health and the environment cannot be made. Nor

can acutely impacted individuals living in the oil- or gas-patch readily or

realistically assess their exposures.

A recent analysis of products and ingredients used in natural gas

development in western Colorado by TEDX, Inc., shows that there are toxic

chemicals used throughout the development process. Fifty four percent of

the 192 chemicals on the list cause respiratory problems, 53% are toxic to

skin and sense organs, 48% cause gastrointestinal and liver damage, and

43% are neurotoxic. More than 26% of the chemicals are reproductive,

kidney, or cardiovascular/blood toxicants, and 22% are carcinogens. I have

included a summary of the TEDX analysis with this letter.

The TEDX analysis revealed, in particular, that air pollution during the

early stages of natural gas development poses an immediate risk to human

health that heretofore had been overlooked. Specific ingredients of

particular concern in air and water include 2-BE, 2MBT, 2-(2-

methoxyethoxy)ethanol and nonylphenols.

2-BE (2-butoxyethanol; ethylene glycol monobutyl ether) -

linked to liver cancer, testicular degeneration, reproductive problems,

and blood disorders that include destruction of red blood cells causing

bloody urine;

HESI300424
2MBT (2-mercaptobenzothiazole) - linked to. pituitary and adrenal

cancer, fetotoxin, inhibits reproductive function, and associated with

various tumors and mutations;

2-(2-methoxyethoxy) ethanol, diethylene glycol monomethyl

ether - suspected carcinogen, known to cause fetal deformities and

organ malformations, reduces male fertility;

Nonylphenols (ethoxylated nonylphenoi) - estrogenic-like

activity, interferes with male development and reproductive ability,

impedes brain development, and causes atrophy of the thymus, a

critical component of the immune system. The effects on

invertebrates and fish in aquatic systems at extremely low

concentrations of the nonylphenols has led to their ban in several

European countries.

These four chemicals are capable of migration because they don’t bind

to organic material. They also can persist underground, i.e., they don’t

break down or they break down into a toxic compound(s). This, in

combination with their mobility, means that these chemicals can travel great

distances, over short and long periods of time before reappearing.

2. No disclosure of these chemicals is currently being required.

Despite the widespread use of toxic chemicals, emergency

preparedness staff, state environmental staff, medical professionals, health

departments, and people living in close proximity to oil and gas facilities do

not have a complete picture of what chemicals are being transported

through, stored, and used in their communities or on their private property.

Currently, it is difficult, if not impossible, to obtain specific information about

a product’s chemical ingredients, and the proportions or combinations of

these chemicals present. It is difficult, as well, to find out what volumes of

chemicals are being used during various oil and gas drilling, completion and

production operations. Without such information, not only are communities

and citizens kept in the dark about potential health impacts, but also the

regulatory agencies cannot know what chemicals to sample for, in the event

of a spill or release.

The OGCC’s 300 and 900 series rules largely do not require disclosure

prior to a spill or release. The only OGCC forms that provide a space for such

disclosure are 5A (Completed Interval Report: "Formation Treatment" line)

and 15 (Earthen Pit Report/Permit). Based upon OGAP’s review of many of

these forms, as a matter of practice, operators simply list "fracking gel" or

some equivalent general term when filling in these forms. They almost

HESI300425
never list specific chemical ingredients of the fracturing fluids used, for

example.

OGCC Forms 19 (Spill Release), 22 (Accident Report), 24 (Soil

Analysis) and 27 (Site Investigation and Remediation Workplan) address

post-spill or release situations. These forms are consistently uninformative,

as they are mostly "self-reported’ by the operator and typically just list "frac

fluid" or "drilling mud", which does not tell local officials or citizens anything

about what specific chemicals were released to the environment during the

spills. In addition, OGCC Forms 25 (Water Analysis Report) . and 31

(Underground Injection Formation Permit Application) request limited

categories of information regarding produced water and other injected fluids.

3. The chemicals are being released to the environment.

The members of the above groups are concerned about both the need

for disclosure of the chemicals being used, and monitoring for their presence

in the environment, because the chemicals can, and do, escape into the

environment via a number of pathways. For example, spills release

chemicals into the air through volatilization, and spills can enter the water

and soil. Chemicals injected into the ground may come in contact with

drinking water aquifers. Surfacing toxic elements (metals) and polyaromatic

hydrocarbons (PAHS) loosened underground in recovery fluids can be

released to the air and water. Chemicals in recovery fluids stored or placed

in pits or tanks on the surface may escape (e.g., volatilize, leak, or leach)

into the air, water or soil. Additionally, flammable chemicals may burn,

releasing a host of toxic by-products into the air.

A review by OGAP of the OGCC database of spills shows 924 spills

since June of 2002, more than 20% of which (182) have affected

groundwater or surface water. In Weld County alone, nearly 50% of the 283

spills listed in the database have impacted groundwater or surface water.

The database also provided four examples of the variety of ways in which

primary oil and gas operations are releasing toxic chemicals into the

environment:

 ̄ In October of 2005, drilling mud containing bentonite, three types of

crystalline silica (cristobalite, tridymite and quartz) and lime surfaced

1/4 mile away from the drilling site and impacted Battlement Creek for

at least three and a half miles.

 ̄ In October of 2005, between 168 and 210 gallons of hydraulic

fracturing fluids sprayed off-site, with between 15 to 20 gallons

entering a surface irrigation ditch. The fluids contained a host of

potentially toxic substances, including ethoxylated nonylphenol (15-

40%); trimethylbenzene (3-7 %), light aromatic naphtha (3-13%);

4

HESI300426
oxyalkylated phenolic resin (15-40%); ethylbenzene (0-2%); xylene

(3-13 %); and isobutyl alcohol (10-30%).

oIn October of 2005, fluids from an unlined reserve pit infiltrated into

the shallow groundwater, flowed downhill 350 feet and impacted an

adjoining landowner’s water well. Water quality samples from this

landowner’s well revealed elevated concentrations of calcium, chloride

and total dissolved solids compared to neighboring water wells, and

concentrations of chlorides that exceeded Colorado water quality

standards. During the cementing process for the gas well, calcium

chloride and Halad 344 were added. Halad-344 is a Halliburton fluid

loss additive containing both acrylonitrile and N,N-dimethylformamide.

Acrylonitrile is a recognized carcinogen, and suspected toxicant with

respect to numerous physiological systems (respiratory, liver, immune,

blood, etc.). N,N-dimethylformamide is also a suspected toxicant for

many physiological systems (respiratory, skin, eyes, liver,

cardiovascular, and several others). It is not known whether any of

the other cementing fluid additives were present in the water well; or

whether COGCC asked that the water samples be analyzed for the

constituents in Halad 344.

°Between September and December of 2005, the OGCC received 10

complaints from eight separate households related to odors and

emissions emanating from wells being drilled and completed by one

operator. Although OGCC never undertook air sampling, an air quality

sample taken by Garfield County in close proximity to the wells

showed.that benzene and xylenes exceeded the U.S. Environmental

Protection Agency’s "non-cancer risk levels" for these compounds - at

67 IJg/m3, benzene was present at more than double the risk level.

Other detectable compounds included acetone, toluene and

ethylbenzene.

A more detailed description of. these four spills is attached.

4. No sinqle aqency has comprehensive iurisdiction over disclosure and

monitoring of the chemicals in products used in all phases of oil and gas

development.

Current practice in the field is that the OGCC nominally has oversight

of the chemicals used in primary operations, based upon voluntary reporting

by the operators. A review of the Colorado Oil and Gas Act indicates that

C.R.S., § 34-60-106 (1)(b), (2)(b) and (d) and (10) could provide a basis for

the OGCC to require fui__~l disclosure for chemicals used, or otherwise

involved, in the exploration for, and production of, oil and gas. However, as

HESI300427
discussed above, OGCC rules do not explicitly require ~ disclosure of

chemicals used. Nor does the OGCC require monitoring when toxic

chemicals are used during oil and gas operations.

The OGCC does have rules regarding disposal of toxic fluids. Yet, in

practice, the OGCC allows drilling fluids to be trucked to a disposal site,

injected underground, to undergo "land treatment", to be burned, or to

evaporate through exposure to the air, regardless of the chemicals present.

The OGCC also does not require additional setback distances from residences

when toxic chemicals are used during oil and gas operations. Without

requiring the disclosure of information about what is in the drilling fluids,

adequate monitoring or compliance with disposal regulations is impossible.

Even if the OGCC required comprehensive disclosure of all chemicals

used, or otherwise involved in, primary oil and gas field operations, other

agencies may have jurisdiction over such disclosure. The Hazardous

Materials and Waste Management Division (HMWD), of the Department of

Public Health and Environment, has produced a guidance document,

Information Reclardinq the Manaqement of Petroleum Contaminated Soils,

which discusses in detail the other agencies that may have regulatory

authority over oil and gas wastes, depending upon their source, type of

contamination and location. As that document suggests, the exact lines

between HMWD, the WQCC, and the OGCC jurisdiction remain complex and

unclear.

We are aware of the 2000 Memorandum of Understanding (MOU)

between the HMWD and the OGCC regarding the disposal of exploration and

production wastes in commercial Class II injection wells. We are also aware

of the 2000 Memorandum of Agreement between the WQCD and the OGCC

regarding responses to spills/releases to surface water. However, neither of

these interagency agreements addresses disclosure of chemicals used during

oil and gas exploration and production or monitoring for these chemicals.

We also know from the case law under RCRA that citizens can, in

certain circumstances, sue oil and gas well operators for releasing

production wastes into the environment. These specific situations include

allowing waste to contaminate groundwater or surface waters, burning

waste, creating a fire or explosion hazard through release of combustible

waste, leaving waste in a publicly accessible area, and damaging an

endangered species or its critical habitat through exposure to waste.

Furthermore, under the solid waste provisions of RCRA, we believe that the

HM.WD, and not OGCC, has jurisdiction over these types of releases to the

environment.

In at least one other area of primary oil and gas field operations, the

Air Quality Control Division has jurisdiction: well site condensate tanks and

tank batteries. VOCs, benzene and n-Hexane are the pollutants of interest

here. I have not found an MOU between the AQCD and the OGCC on this

HESI300428
matter, and the AQCD website makes no reference to OGCC authority in this

area.

We are also familiar with the Emergency Planning and Community

Right-to-Know Act (SARA Title III) reporting program, housed within the

DPHE’s Environmental Sustainability Program.~ However, the information on

the volumes of chemicals "stored" that is available (the Tier II reports),

based upon our requests to local repositories of the reports so far, is very

general, covers mainly larger storage sites, and does not contain well

specific information. The information also can be very difficult to access, as

in one instance, OGAP has had to contact a city attorney’s office to confirm

our legal right to access the information.

Under federal OSHA regulations, Material Safety Data Sheets are

required to be kept for each well site. However, MSDS’s are not available to

the public at large. State and local emergency preparedness staff can

request this information, but it is not automatically submitted to these staff

in every county in Colorado. Moreover, the sheets are not always up to date

or complete. They often state that the mixture of chemicals is proprietary or

they list less than 100% of the chemicals in the product. For some of the

chemicals, studies often have not been done to determine either their shortterm toxicity or their long term or delayed health effects. Therefore, the

information regarding the chemicals used in oil and gas exploration and

development that is contained in the MSDS’s is seriously incomplete.

As a consequence of the above mix of jurisdictions, with both overlap

and gaps, it is unclear which agency should appropriately address the

questions of requiring (1) disclosure of the complete make-up and volumes

of the chemicals in products used in oil and gas development; and (2)

monitoring for levels of, and impacts from, these chemicals. From our

perspective, issues of staffing levels, expertise with health impacts and

cradle to grave coverage suggest that the DPHE would be the more

appropriate location for such regulation. The OGCC may, under the Oil and

Gas Act, assign its functions in this area to another agency through an

interagency agreement. Such an assignment would allow for much more

complete and efficient disclosure, which we view as essential to making

disclosure and monitoring most beneficial to the citizens of Colorado.

Summary of requests

The above groups believe that protection of public health and safety

requires full disclosure of the complete make-up and volumes of the

chemicals in products used in oil and gas development, and the monitoring

of their use. The groups believe their request is justified because chemicals

with known human toxicity are being used by the oil and gas industry in

Colorado. No disclosure of these chemicals is currently being required,

either by agency rule or practice. These chemicals are frequently being

HESI300429
released to the environment, with unknown impacts on. human health.

Inadequate agency regulation of the indust~ has prevented cradle to grave

disclosure of these chemicals and monitoring for their effects.

Therefore, on behalf of the above groups, I would like a written

response as to how to best to move forward with these requests.

I look forward to hearing from you in the near future.

Attachments

Cc" Matt Sura, WCC

Gwen Lachelt, OGAP

Josh Joshwick, SJCA

Peggy Utesch, GVCA

Peggy Baxter, WSERC

Theo Colborn, TEDX

Howard Roitman, CDPHE  ̄

Sincerely,

,,~

-~--~Bruce Baizel ~

Staff Attorney

HESI300430
TEDX

The Endocrine Disruption Exchange, Inc.

P.O. BOX 1407

Paonia, CO 81428

970-527-4082

Contact Person: Dr. Mary Bachran

mbachran@tds.net

CHEM]CALS USED IN NATURAL GAS DEVELOPMENT

Introduction, Analysis and Comments

April 25, 2006

Introduction

This project was designed tO explore the health effects of the products and chemicals used in

drilling, fracturing ("frac’ing’), and recovery of natural gas. It provides a glimpse at the

pattern(s) of possible health hazards for those living in proximity to gas development. In the

process of researching the literature, we discovered that drilling companies have access to

hundreds of products, the components of which are in many cases unavailable for punic

scrutiny. This spreadsheet addresses only those chemicals and products for which there is

evidence that they are or have been used in western Colorado, and for which there were data

about their health effects. We make no claim that this list is complete.

1. The four most common adverse health effects for the chemicals in the spreadsheet are

neurotoxicity, skin!sense organ toxicity, respiratory problems, and gastrointestinal/liver damage.

2. Only a fraction of the chemicals used by the natural gas industry is covered in this

spreadsheet. For example, in the course of our investigations, we discovered a list of 910

"frac’ing" products and chemicals compiled by the Canadian government.

3. Many of the citations used in th~ spreadsheet are old. In some of those cases we were able to

get data only from an abstract. In other cases, we were able to get quotations about the health

effect(s) from only toxic chemical databases, such as TOXNET, HAZMET, etc. For some of the

older products and/or chemicals since the 60’s or 70’s we found no new studies.

4. Several reasons led to the lack of data about the health effects of some of the products and

chemicals on the spread sheet:

(a) We found no health effect data for a particular chemical or product.

(b) Some product labels have no ingredients listed.

(c) Some product labels provide only a general heading such as "plasticizer", "crosslinker" etc.

(d) Some product labels state only "proprietary" or provide only the name of one or two

ingredients plus "proprietary".

HESI300431
5.~ This spreadsheet provides no clues to the volumes of material injected underground during

natural gas development. However, typical drilling and stimulation activities use up to 150,000

to 500,000 gallons of fluid at each frac’ing What chemicals constitute these liquids, and at what

concentrations, is unknown.

6. This spreadsheet provides only a hint of the combinations and permutations of mixtures

possible and the possible aggregate exposure.

7. Materials Safety Data Sheets (MSDS) are designed to provide information to protect those

who handle, ship, and use the product(s). The sheets are also designed to protect emergency

response crews in case of accidents or spills. The data in the MSDSs do not take into

consideration the health impacts resulting from chronic or long-term, continual, and!or

intermittent exposure.

8. The MSDSs are often sketchy and provide health effects information for only one or two

chemicals in a product. In the case of mixtures, the health effects warnings are often not

chemical specific.

9. The following figures are based on the data in the Chemicals Used in Natural Gas

Development Spreadsheet. They are presented to define a pattern of the possible toxicity of the

chemicals and products that are being used. Of the 190 chemicals on the list:

* 51% can cause skin!sensory organ toxicity

* 49% can cause respiratory problems

* 38 % are neurotoxicants

* 44% are gastro-intestinal/liver toxicants

* 28% are reproductive toxicants

* 26% are kidney toxicants

* 27% are cardio/vascular/blood toxicants

* 22% are carcinogens

* 19% are immune system toxicants

* 18% are developmental toxicants

* 8% are endocrine disruptors

* 7% cause mutations

* 8% are wildlife toxicants.

10. Of the 39 (21%) of the chemicals on the list that are soluble, or miscible:

* 72% are skin and sensory organ toxicants

* 64 % are gastro-intestinal/liver toxicants

* 67% are respiratory toxicants

* 44%

* 36%

* 31%

* 28%

are neurotoxicants

are cardiovascular toxicants

are kidney toxicants

are reproductive toxicants

HESI300432
* 28% are immune system toxicants

* 26% are developmental toxicants

* 13% cause cancer

* 10% are endocrine disruptors

* 10% are wildlife toxicants

* 5% cause mutations

Of the 73 (38%) of the chemicals on the list that can vaporize:

* 63% are neurotoxicants

* 63% are skin and sensory organ toxicants

* 56% are gastro-intestmal/liver toxicants

* 58% are respiratory toxicants

* 42% are reproductive toxicants

* 41% are cardiovascular/blood toxicants

* 38% are kidney toxicants

* 32% are developmental toxicants

* 26% are carcinogens

* 25% are immuno-toxicants

* 12% are endocrine disruptors

* 7% cause mutations

* 11% are wildlife toxicants

11. Of the chemicals on the list, 12% are contained in specifically designated biocide products.

Comments

Many of the chemicals on this list have been tested for lethality and acute toxicity. The majority

have never been tested for low dose, long term effects that may not be expressed until long after

exposure. Nor have adequate ecological studies been done. For example, most of the chemicals

have not been tested for their effects on terrestrial wildlife or fish, birds, and invertebrates. It is

reasonable to assume that the health endpoints listed above could very well be seen in wildlife,

domestic animals, and pets.

The products labeled as biocides are among the most lethal in the spreadsheet, and with good

reason. Bacterial activity in well casings, pipes and joints can be highly corrosive, costly, and

dangerous. Nonetheless, when these products return to the surface through the retrieval process

they pose a significant danger to workers and those living near the well and evaporation ponds.

The use of respirators, goggles and gloves is advised on many of the MSDSs for the products on

this list. This indicates serious, acute toxicity problems that are not being addressed in the

recovery process when the chemicals come back to the surface. It raises concern over possible

hazards posed to those living in proximity to well pads as the chemicals evaporate or penetrate

water and soil.

HESI300433
Industry claims that 70% of the material it injects underground is retrieved. While the fate of the

remaining 30% is unknown, the recovered product is placed in holding pits on the surface and

allowed to evaporate. This results in many highly toxic chemicals being released into the air, as

well as being dispersed into local surface waters. The condensed residues remaining in the pits

are taken off-site and re-injected in the ground posing concerns for aquifers.

After development ceases on the well pad and the well goes into production, the evaporation pits

containing highly concentrated, lethal residues are bulldozed over. It is impossible to predict

how long the buried chemicals will remain in place. Chemicals like MTBE that are highly

persistent could migrate into underground water resources.

Prior to use, these products must be shipped to and stored somewhere in our counties before

being transported to the well site. They pose a hazard on our highways, roads, and rail systems,

as well as to people living and working near the storage facilities.

Recently, in our efforts to get lists of the chemicals or products used or stored for natural gas

development, we were told that the information may no longer be available because it could aid

and abet terrorists. The fact that these chemicals are considered so dangerous underlines how

important it is to be aware of their presence in our watersheds. The necessity for full disclosure

cannot be emphasized enough if we are to protect our watersheds and public health. Proper

monitoring of air and water cannot be designed without knowing what to look for.

Some of the chemicals on the list, such as citric acid or polysaccharide, are frequently found in

the environment or household products and generally do not cause harm. Polysaccharides are

found in almost all plant material and are often defined as complex sugars of which there are vast

numbers. However, they appear in this spreadsheet because they are an ingredient and are

included on the MSDS sheet for the product with warnings attached, such as "may cause eye,

skin and respiratory irritation... ’" However, there is no way to know whether the polysaccharide

has been modified to become toxic. "

Other chemicals, such as citric acid, can be toxic when encountered in high concentration, or,

perhaps, during certain exposures (such as inhalation versus skin contact). Because only a small

pdrcentage of the total composition of most of the products in this spreadsheet is available, we

cannot say for certain whether such chemicals are harmless in their application. Under the

present system, there are not enough data to determine the safety of products that contain

mixtures of relatively "’benign" ingredients and unknown chemicals, when the actual percentage

composition is not provided.

As we have added products to the spreadsheet the percentages of toxic effects occasionally

shifted. Changes such as this will continue as more products and chemicals are entered into the

database. Thus far, despite small increases or decreases in percentage, the top four health effects

of concern have remained the same. They are neurological, skin and sensory organ, gastrointestinal!liver, and respiratory system damage.

HESI300434
Summary of Recent Incidents Involving the Release of Chemicals

Prepared by Lisa Sumi, Research Director, OGAP

PRESCO DRILLING MUD DAYLIGHTS IN STREAM: In October of 2005,

PRESCO, Inc. (PRESCO) was drilling a well on Battlement Mesa, in Garfield County.

While drilling a borehole to set the surface casing for the BM 36-23 well, the drilling

mud "daylighted." According to the company, the borehole apparently intersected a

fracture, which conveyed the drilling mud to the ground surface.1 The leak was first

discovered coming out of a natural spring, on a hillside approximately 1/4 mile from the

drilling rig.

According to a report sent by Cordilleran Compliance Services, Inc. to Robert Chesson of

the COGCC, "the drilling mud leak eventually made its way to Battlement Creek causing

a visible, ’milky-white’ color change in the creek due to the turbidity. The effects of the

mud leak were visible for at least 3 1/2 miles down stream."2

According to Cordilleran, the drilling mud consisted of "fresh water, bentonite gel,

polymer, and lime.’’3 The Material Safety Data Sheet (MSDS) for the drilling mud QuikGel, supplied to Cordilleran, showed that in addition to bentonite, the drilling mud

contained three types of crystalline silica (cristobalite, tridymite and quartz). There was

no mention of lime in the MSDS.4

The National Lime Association’s Fact Sheet Lime Safety Precautions states that "care

should be taken to avoid accidental mixing of quicklime and water (in any form,

including chemicals containing water of hydration) to avoid creating excessive heat.

Heat released by this reaction can ignite combustible materials or cause thermal damage

to property or person. ’’~

The COGCC issued a notice of alleged violation (NOAV) on November 21, 2005, for an

"unpermitted discharge of any fluids into water of the State." On the NOAV, the

COGCC ~equired the company to describe all operational changes Presco will implement

on future drilling operations to mitigate uncontrolled release of E&P fluids from

drillsites, including contingency plans to manage a release without resulting in an

1 Colorado Oil and Gas Information System (COGIS) Spil! report. 10/14/2005. Filed by PRESCO Inc. for

the Battlement Mesa 36-23 well; and COGIS Field Inspection Report, 10/14/2005, for Battlement Mesa

#36-23 well.

2 February 7, 2006. Letter from Cordilleran Compliance Services, Inc. (Cordilleran) to Robert Chesson,

COGCC, Re: Notice of Alleged Violation for Uncontrolled and Uncontained Drilling Mud at the PRESCO,

Inc. Battlement Mesa 36-23 Gas Well Site that Occurred on 14 October 2005 - Cordilleran Project

#E04243. t?U,~:/.’ogcc.viis state.co.us."cai-binisearchTid=~?&classid=2~)& ! 2¢’=200078321. 3 February 7, 2006. Letter from Cordilleran to Robert Chesson, COGCC. p. 2.

4 Halliburton. Material. Safety Data Sheet for Quick-Gel ®. Included in February 7, 2006. Letter from

Cordilleran to Rober~ Chesson, COC-CC. 5 National. Lime Association. i::t~: ; v,~,;,,,< :Jme ora,’t’aqs.~atmI Fact Sheet Lime Safety Precautions

~p-i!ww~. !irne ~r~Fac~Sat’e~- 12403 ~,d..f.

HESI300435
uncontrolled discharge into surface water of the State.6 The COGCC case regarding this

spill was closed on the same date. 7

KERR McGEE FRACKING FLUID AFFECTS SOIL AND IRRIGATION DITCH:

On October 4, 2005, a valve on a the wellhead of Cannon Land 7-35 well failed, resulting

in the spraying of between 168-210 gallons of fluids returning to the surface from an

hydraulic fracturing operation. The fluid sprayed into the air and drifted offsite,

primarily onto pasture land, resulting in a visible coating that was as much as 1/2 inch

thick,s The company estimated that 15-20 gallons of the fluid entered the Platteville

Lateral irrigation ditch, which contained some standing water but was not flowing at the

time that the fluids entered it.

The fracturing fluid contained Potassium Chloride (2%), as well as a surfactant (DWP931, run at 1.5 gallons/1000 gallons of water), and friction reducer (DWP-601, run at 0.5

gallons/1000 gallons of water)? DWP-931 contains a host of potentially toxic

substances, including ethoxytated nonylphenol (15-40%); trimethylbenzene (3-7 %), light

aromatic naphtha (3-13%); oxyalkylated phenolic resin (15-40%); ethylbenzene (0-2%);

xylene (3-13 %); and isobutyl alcohol (10-30%)J° DWP-601 contains 1-5% ethoxylated

nonylphenol.11

According to an Oct. 4, 2005 email from COGCC to the Water Quality Control Division

of CDPHE, this spill/release "would be classified as non-significant.’’1:

MARALEX DRILLING FLUIDS IN DRINKING WATER: On October 30, 2005, a

landowner contacted COGCC regarding potential contamination of his water well by

fluids in a nearby drilling reserve pit. The unlined reserve pit for the Keegan Patrick 33-

7-11 #2A well, which was operated by Maralex Resources, Inc., was located about 350

feet uphill from the affected water well. Based on in_formation collected by COGCC, "it

appears that fluids from the unlined reserve pit infiltrated into the shallow groundwater,

flowed downhill and impacted the.., water well.’’1~

Water quality samples from the landowner’s well revealed elevated concentrations of

calcium, chloride and total dissolved solids compared to neighboring water wells, and

concentrations of chlorides that exceeded Colorado water quality standards.

6 COGIS- NOAV Report. 10/21/2005. Issued to Presco, Inc. for Battlement Mesa #36-23 wall.

7 COGIS- NOAV Report. 10/21/2005. Issued to Presco, Inc. for Battlement Mesa #36-23 well.

s Oct. 7, 2005. Letter from Paul Schneider, Kerr-McGee to Forrest Vaugtm, Colorado Department of

Public Health and Environment.

9 ibid.

x0 Cal-frac Wel! Services Ltd. May 14, 2004. Material Safety Data Sheet for DWP-931 Fracturing fluid

additive. Included in Oct. 7, 2005 letter from Kerr-McGee to CDPHE. ix Cal-frac Well Services Ltd. Sept 19, 2002. Material Safety Data Sheet for DWP-601 Oilfield additive.

Included in Oct. 7, 2005 letter from Kerr-McGee to CDPHE. iz October 5, 2005. Email from Randall Ferguson, COGCC, to Jeffrey Coombe and BethAnne Williams.

Electronic document in COGCC Remediation Project 3641. 13 Notice of Alleged Violation Report. 10/30/2005. Issued by COGCC to Maralex Resources Inc. COGIS

document number 200085988. t3~?-."/~i!-~as state

HESI300436
No information on the composition of the drilling mud is available on the COGCC web

site. According to Steve Lindblom of COGCC, the COGCC requested copies of the

MSDSs for the various products used during the Maralex drilling process. COGCC

received the MSDSs, but Lindblom did not have the resources to send OGAP copies.

They will eventually be posted to the COGCC web site.a4

The COGCC web site does contain some general information on the well cementing

program at the Keegan well. During the cementing process, calcium chloride15 and other

additives, like Halad 344, were added to the cement at different phases, i6 It is unclear

whether the calcium chloride present in the water well originated from the drilling fluids

or the cementing operation. It is also not known whether any of the other cementing fluid

additives were present in the water well; or whether COGCC asked that the water

samples be analyzed for the constituents in Halad 344.

Halad-344 is a Halliburton fluid loss additive. According to information contained in the

patenting information for other Halliburton chemicals, Halad 344 is described as:

 ̄ a copolymer of NcN-dimethylformamide and 2-aerylamido-2-methylpropane

sulfonic acid. 17

 ̄ grafted polymers prepared by the polymerization of monomers or salts of

monomers of N,N-dimethylacrylamide, 2-acrylamido-2-

methylpropanesulfonic acid and acrylonitrile having a lignine or lignite or

other backbone, and are commercially available from Halliburton Energy

Services, Duncan, Okla.18

 ̄ a random copolymer of 2-acrylamide-2-propane sulfonic acid and N,Ndimethyl acrylamide]9

Acrylonitrile is a recognized carcinogen, and suspected toxicant with respect to numerous

physiological systems (respiratory, liver, immune, blood, etc.). N,N-dimethylformamide

is also a suspected toxicant for m ,an~0 physiological systems (respiratory, skin, eyes, liver,

cardiovascular, and several others).

~4 Pets. Communication between Steve Lindblom and Lisa Sumi. 06/05/2006.

~ Sundry Notice, Form 4, submitted to COGCC by Maralex Resources Inc. Report of work completed on

Keegan Patrick 33-7-11 #2A well, 07/27/2005. (I-Ialliburton Job Summary attached to Sundry notice).

16 Sundry Notice, Form 4, submitted to COGCC by Maralex Resources Inc. Report of work completed on

Keegan Patrick 33-7-11 #2A 08/09/2005. Halliburton Job Summary attached. COGIS web site.

17 US Patent and Trademark Office. August 28, 2003. United States Patent Application

20030159625. Reddy, B. Raghava et al. h~p aut~ftl.uspa~ ~,ov;netac~i/nph_-

Parser’~Sect I =PTO ! & Sec~2=HITOFF&d=PG0 ?&~?= ’~ #:~:=° o2Yner.ahm;1%2 F PTO~!-,2Fs:-c:~ q:~ra.hmfl & r= !&

~’=G&t-I&sl w2003(’.q 5o,~25’ PGNR.&OS=D\/20030 * 5O,’;,25&RS=DN’20~)3{ 15o~525. 1~ US Patent and Trademark Office. April 14, 2005. United States Patent Application 20050080161 Tare,

Uday A. et al. http: %ppt~ 1 uspto. ~ov/netac~i, nobParser’~ Sect I =PTO2& Sec~= HITOFF&u=%2 Fnetahm: i° o 2F PTO%2 Fsearchadv html&r=2&p= i &t~G&i=50&d=PG0 i&S 1 =haiad-344~2OS=haiad-344& RS-haiad-?~44. ~9 ibid

~o Scorecard. Acrylonitrile (CAS 107-13-1) and N,N-dimethylformamide (CAS 68-12-2).

~ ,’,’v,~.wv ~c~recard ~.r~’che:,~ica!-grmq!es.

3

HESI300437
BARRETT CONDENSATE AND FLOWBACK PRODUCTS I~ AI~:

Citizen Complaints

Between September and December, 2005, the COGCC documented 10 complaints from

eight separate households related to odors emanating from wells being drilled and

completed by Bill Barrett Corporation ("Barrett")..

9/16/2005: Elizabeth Vath, Gayle Hartop and Teran Hughes complained separately to

the COGCC about smoke/haze/odors from a nearby well pad. The COGIS Complaint

report for this incident stated that additional cementing work had to be done on a Barrett

well, so pressure in the well was released. Typically, Barrett would sparge the

accumulated gases through reserve pit fluid. In this case, however, because the pit was

almost empty, the gases were vented directly to the atmosphere. There was no mention of

any air quality monitoring occurring at the complainants" homes or at the well site.

9/22/2005: Oni Butterfly, a landowner living near Barrett’s Louthan well, complained of

fumes/odors that left her "gagging." The "stench" was so bad that she found it difficult

to be at home, especially outside.2t

10/18/2005: Dion and Debbie Enslow complained about odors from a Barrett wellpad

upwind from their home. The pad had four wells that were undergoing

completion/hydraulic fracturing. COGCC staff investigated and found flowback in one

half of the unlined pit. The other side of the pit was "really dark and oily in appearance."

The complaint report states that the "Enlow residence is down in a hollow, 1/4 miles or

so from well-pad. Fumes and such can accumulate there... [Barrett is] trying to

complete this loc[ation] ASAP.’’2a According to Dion Enlow, he complained to the

company that the smell was so bad that "I can’t go outside and breathe." Enlow was not

aware of either the company or any agencies actually sampling the air quality in response

to his complaints.23

10/19/2005: Oni Butterfly filed another complaint about the odors from the Barrett wells.

There had recently been a problem with a nearby well location, with tanks overflowing.24

According to the COGCC Complaint report on this incident,25 Garfield County

environment staff would install monitoring equipment at her house to take a monthly air

quality reading, and leave a Suma air sampler so that Ms. Butterfly could take an air

sample when the odors were especially bad. This is the only example, in these COGCC

complaints, of air samples being taken in response to odors from Barrett pits.

10/25:2006: COGCC was called by the Enslow family, who related that odors were so

severe that they could not remain outside to cook on their grill. Debbie Enslow also said

2x COGIS Complaint Report. Complaint date 9/22/2005. Document number 200081430. ~

= COGIS Complaint Report. Complalint date 10/18/2005. Document number 200082039: 23 Pers. Communication between Dion Enslow and Lisa Sumi. 06/06/2006.

24 COGIS Complaint Report. Complaint date 10/19/2005. Document number 200081429.

~ ibidL

HESI300438
that she and her husband were "not prone to headaches but have been getting them due to

pit odor/vapors," and that they were also "feeling rundown and listless." Jay Krabacher of

COGCC and a Barrett representative went to the Enslow residence and according to

Krabacher, "we all could smell intermittent (but persistent) odors." Krabacher

investigated options for mitigating pit odors, and was told that "Schlumberger and

[Services] have ’industrial strength’ powdered bleach which, when added to the pit fluid,

is pumped and circulated.., works quickly." Krabacher visited the Wilson pad near the

Enslows and stuck a finger in the pit; in the complaint report he notes that "there was a

slight condensate odor - which could be detected on my f’mger hours later." z6

11/1/2005: Sherry Tardiff contacted the COGCC regarding "’nauseating odors from

Anchondo pad." COGCC staff, Jay Krabacher, went to the location to "sniff around,’"

and detected a "’slight odor." He was told by a Barrett employee that Anchondo was a

"real active well," and that during the day the gas was being vented under the pit surface

to a tank. Krabacher also reports that that hot flowback water "becomes very steamy

upon hitting surface, and there was some odor.

1 !11/2005: Dion Enslow reported "a large cloud of steam/vapor" extending for

approximately 1/4 mile from the Wilson pad, which was undergoing a workover prior to

hydraulic fracturing. The Enslows were "somewhat apprehensive" of the contents of the

cloud. The crew foreman speculated that the steam cloud could be the result of hot (170 -

190° F) produced water hitting the cold air, which sounded "reasonable" to Krabacher

and the Enslows. There was no investigation into what compounds might be volatilizing

when the hot produced water hit the surface.

11/15/2005: The Enslows left a message for COGCC at 5:30 in the morning, stating that

the "odor [is] worse than it’s been." Enslow had gone up to the Wilson pad location and

had observed "gnarly/oily" fluid in the pit. Barrett had just completed its final hydraulic

fracturing flowback operation at that site. The well had been hydraulic fractured with

"slickwater,’’28 which according to Jennifer Miskimins of the Colorado School of Mines,

may contain chemicals such as "a friction reducer, surfactants, and clay stabilizers.’’29 Jay

Krabacher of COGCC noticed a "’slight odor" at the Wilson well pad, and was assured by

the company that the location would be completed and pit reclamation would begin soon

thereafter. Enslow reports that the flow-tester working for Barrett assured him that if the

Enslows had any problem he’d "take care of it.’’3°

11/21/2005: Oni Butterfly contacted the COGCC several times to complain about odors

from area we!ls. Ms. Butterfly asked about the "’stuff" on the surface of the Louthan pit,

and was given the "guar gum tutorial" by Jay Krabacker. She was told that the stuff on

pit surfaces is "mostly environmentally benign," although sometimes "odiferous."

26COGIS Complaint Report. Complaint date 10/25/2005. Document number 200082049.

27COGIS Complaint Report. Complaint date 11/1/2005. Document number 200081427.

2sCOGCC Form 5A. Complete interval report filed by Bill Barrett Corporation for the Wilson 33D-23-692

well. Processed 12/20/05~ Document number 01526602.

29 Petroleum Technology Transfer Council of the Rockies Newsletter. 2003. Vol.6;4. J. Miskimins.

~0 COGIS Complaint Report. Complaint date 11/15/2005. Document number 200082058.

HESI300439
12/05 - 12/29/2005: Ms. Butterfly called the COGCC to complaint about "a different

sort of stench, still very bad." The next day she called again, referring to it as a "benzene

smelL" She asked that the COGCC try to procure a full-time, outdoor air-monitoring

device and an air pollution control device for the inside of her house. On the 29tu of

December, Ms. Butterfly called COGCC again, to report a strong odor experienced at

4:30 that morning. On December 30, Butterfly was informed by Garfield County that an

air quality sample had been taken on Chipperfleld Lane, which was fairly close to the

Laughlin Pit, on October 25, 2005.3~ Results from the sampling showed that benzene and.

xylenes exceeded the U.S. Environmental Protection Agency’s "non-cancer risk levels"

for these compounds - at 67 gg/m3, benzene was present at more than double the risk

level. Other detectable compounds included acetone, toluene and ethylbenzene.

Notices of Alleged Violation (’NOAVs)

Between October .18 and December 28, 2005, Barrett was issued nine NOAVs. The

violations included transporting condensate wastes offsite without a permit; burning

wastes at a site not authorized as a waste disposal site; allowing fluids to fill pits above

allowable levels; not reporting the spill of"frac flowback" fluid outside of a pit; and not

removing condensate from the pit within 24 hours. Some well sites received a couple of

NOAVs during this time period.

In one of the COGCC NOAV reports, it was documented that a Barrett employee said he

was unaware that he was violating a COGCC rule by filling the pit too full.32

Burning the Condensate

One case, in particular, should be highlighted for its air quality issues. On or within a

few days of December 24, 2005, condensate from a Barrett owned well was transported

to the Werner 44A-23-692 well site and burned. According to COGCC rules, operators

are not allowed to haul condensate from one pit to another for disposal purposes without

a permit. Barrett had not obtained a permit to use the Werner site as a centralized

location for waste disposal purposes. Barrett was issued a Notice of Alleged Violation

for transporting the wastes to the Wemer pit.

The burning of condensate created smoke that sparked complaints from nearby residents.

Brian Macke, COGCC director, told the Glenwood Springs Post Independent (the Post)

that burnin,,g.~ condensate "’does get rid of the odor problem quickly, which we thought was

beneficial. ,33 The Post also reported Garfield County environmental health manager as

saying "’I felt pretty good that there was no direct impacts to anybody in the area~’" 34

Letter and air quality test results sent from Garfield County to Oni Butterfly. 12/30/2005.

COGCC NOAV Report. 12/12/2005. Document 200080875.

Webb, D. 12/09/2006. "Tempers flare over Barrett pit fires." Glertwood Springs Post Independent.

ibid

HES1300440
Yet, despite the lack of concern on the part of the Garfield County staff, on December 29,

the Air Pollution Control Division (APCD) of the Colorado Department of Public Health

and Environment revoked the burning permits that it had issued to Barrett. According to

the Post, this was done after the APCD learned of complaints made to Garfield County

about the pit fires.35 .There is no information on whether the state agencies or Garfield

County conducted air quality monitoring during the burn operations.

Gray, D. 01/04/06. "Fires not as bad as some report," Glenwood Springs Post Independent.

HES1300441