Colorado regulators fine oil company nearly $650,000 |

Colorado regulators fine oil company nearly $650,000

PARACHUTE (AP) – Oxy USA is agreeing to pay nearly $650,000 in fines after regulators said they found pit leaks that caused oil and gas contamination of spring waters near Parachute.

The company signed a proposed settlement agreement that includes a fine of about $390,000 related to leaks in an unlined pit in the Cascade Canyon area and $257,400 over a torn liner at Rock Springs.

If approved by the Colorado Oil and Gas Conservation Commission, the $390,000 fine would be among the largest it has imposed. The commission will hold a hearing on the matter this week.

The contamination was discovered in 2008. Regulators say Oxy operated pits without necessary permits, and water tests detected benzene levels well above allowable amounts.

Oxy has spent $2.4 million on remediation efforts and $8 million to better protect water in the area by reducing its number of pits and using more storage tanks.

Oxy admits no liability under the proposed settlement. Oxy spokesman Eric Moses said drinking water and wildlife were not affected by the incidents.

Both occurred near areas designated by the Colorado Division of Wildlife as sensitive habitat for the greater sage grouse. The U.S. Fish and Wildlife Service recently decided the bird is a candidate for federal protection under the Endangered Species Act, but it is precluded by the need to address higher-priority species first.

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