Crooks Oil Lease - Order, January 25, 1999
Order, January 25, 1999
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of
the Alleged Violation of Article 23 of the Environmental Conservation Law
- by -
FRED H. CROOKS
Crooks Oil Lease
8797 Tug Hill Road
Machias, New York 14101 Respondent
File No. 98-20
- A Motion for Order Without Hearing dated November 23, 1998, was duly served upon the Respondent, Fred H. Crooks, by certified mail on November 25, 1998.
- The Respondent has not answered the motion and, thus, has not disputed the allegations of Department Staff.
- The Motion and supporting papers were forwarded to the Department's Office of Hearings and Mediation Services for review, and the matter was assigned to Administrative Law Judge (ALJ) Edward Buhrmaster, who has submitted a report thereon.
- Upon review of the ALJ's Report (copy attached) and the record of this proceeding, I concur with the ALJ's Findings of Fact, Conclusions of Law, and Recommendations, which establish that the Respondent failed to comply with Department regulations and a previous order on consent (R9-4133-94-05) by failing to produce or lawfully plug and abandon certain oil wells that are part of his lease in the Town of Carrollton, Cattaraugus County.
NOW, THEREFORE, have considered this matter, it is ORDERED that:
- No hearing is required to determine whether the Respondent has committed the violations alleged by Department Staff, or whether the relief requested by Staff should be ordered.
- The Respondent shall pay a civil penalty in the amount of Forty Five Thousand Dollars ($45,000.00), apportioned as Five Thousand Dollars ($5,000) for each of the nine wells that were not producing, plugged and abandoned, or sold by May 1, 1998, as required by the previous order on consent.
- This penalty shall be due and payable within thirty (30) days following the service of a conformed copy of this Order upon the Respondent.
- The Respondent shall produce, lawfully plug and abandon, or sell to a bonded operator three (3) wells subject to the Crooks Oil Lease by May 1, 1999.
- The Respondent shall produce, lawfully plug and abandon, or sell to a bonded operator nine (9) additional wells subject to the Crooks Oil Lease within six months of service of this Order.
- The Respondent shall produce, lawfully plug and abandon, or sell to a bonded operator the one (1) remaining well subject to the Crooks Oil Lease by May 1, 2000.
- The provisions, terms and conditions of this Order shall bind the Respondent, his agents, servants, employees, successors and assigns and all persons, firms, and corporations acting for or on behalf of the Respondent.
- All communications between the Respondent and the Department concerning this Order shall be made to the Region 9 Director of the New York State Department of Environmental Conservation, 270 Michigan Avenue, Buffalo, New York, 14203-2999.
For the New York State Department
of Environmental Conservation
By: John P. Cahill, Commissioner
Dated: Albany, New York
January 25, 1999
TO: Fred H. Crooks
8797 Tug Hill Road
Machias, New York 14101
(VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED)
Lee W. Zimmerman, Esq.
NYS Department of Environmental Conservation
Division of Legal Affairs, Region 9
270 Michigan Avenue
Buffalo, New York 14203-2999
STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
50 Wolf Road
Albany, New York 12233-1550
In the Matter
- of the -
Alleged Violation of Article 23 of the Environmental Conservation Law
- by -
FRED H. CROOKS,
REPORT ON MOTION FOR ORDER WITHOUT HEARING
File No. 98-20; R9-4590-98-02
Administrative Law Judge
On November 25, 1998, Department of Environmental Conservation ("DEC", or "the Department") Staff served a motion for order without hearing upon Fred H. Crooks ("Respondent"), owner of the Crooks Oil Lease, for wells located on real property in the Town of Carrollton, Cattaraugus County. Staff seeks to impose a $45,000 penalty upon Mr. Crooks for his failure to either produce or lawfully plug and abandon nine wells on his property, in violation of Section 555.1 of Title 6 of the New York Codes, Rules and Regulations ("6 NYCRR 555.1") and a consent order he had executed on May 16, 1994. In addition, Staff wants a schedule set for the production, lawful plugging and abandonment, or sale of the remaining wells that are subject to the lease.
Staff's motion was made consistent with 6 NYCRR 622.12(a), which provides that "in lieu of or in addition to a notice of hearing and complaint, the department staff may serve, in the same manner, a motion for order without hearing together with supporting affidavits reciting all the material facts and other available documentary evidence." Attached to the motion, prepared by Staff attorney Lee W. Zimmerman, was an affidavit of John K. Dahl, the minerals manager of DEC's Region 9 office.
As required by 6 NYCRR 622.14(b), Department Staff's motion included a statement that a response must be filed with the Department's chief administrative law judge within 20 days of the Respondent's receipt of the motion and that failure to respond constitutes a default. Despite this, no response to the motion has been filed.
After the deadline to respond had passed, I contacted Mr. Zimmerman to see if there had been any communication between the Respondent and Department Staff since the motion had been served. He informed me that there had been no communication, and that he wanted the motion decided.
By letter dated January 5, 1999, which I copied to Mr. Crooks, I requested that Mr. Zimmerman send me the original domestic return receipt (or "green card") indicating receipt of his motion papers, and an affidavit of the papers' service by certified mail. I wrote that assuming Mr. Zimmerman could demonstrate proper service of the motion papers, I would conclude that the Respondent had defaulted and review Staff's papers to determine whether its charges are supported by Mr. Dahl's affidavit and whether the requested relief is warranted. I said I would then prepare a hearing report and an order for the Commissioner's consideration.
On January 8, 1999, I received by mail the original "green card" and an affidavit of service of the motion papers, dated January 6, 1999, which was signed by Mr. Zimmerman. As I had requested in my January 5 letter, Mr. Zimmerman sent a copy of these documents to Mr. Crooks.
With my receipt of this additional information, the record in this matter closed.
Findings of Fact
- As of May 16, 1994, Fred H. Crooks owned Crooks Oil Lease for wells located on real property in the Town of Carrollton, Cattaraugus County.
- Sixteen non-producing oil wells were located on the property, having the Well API Numbers of 31-009-67322 through 31-009-67337, inclusive.
- On May 16, 1994, Fred H. Crooks executed a short-form order on consent (R9-4133-94-05, a copy of which is attached to Staff's motion). By executing the order, Mr. Crooks agreed to strictly comply with the conditions on the Schedule "A" which was attached thereto. That schedule required that Mr. Crooks produce or lawfully plug and abandon the sixteen non-producing wells at the rate of three or more per year during the period May 1995 through May 2000. Schedule "A" also provided that "in the event that the respondent fails to produce or lawfully plug and abandon three of the aforesaid wells by May 1, 1995, and any subsequent year, a stipulated penalty of one-hundred dollars ($100) shall be imposed for each day the well(s) remain non-producing or unplugged."
- Mr. Crooks plugged three wells (API Nos. 31-009-67322, 31-009-67323, and 31-009-67326) by May 1, 1995, but had not produced or lawfully plugged and abandoned any of the remaining wells as of November 18, 1998, the date of an affidavit by John K. Dahl, Region 9 minerals manager, which is attached to the motion for order without hearing.
- On August 14, 1998, Mr. Dahl sent a Notice of Violation to Mr. Crooks (a copy of which is attached to Staff's motion) informing him that he was in violation of the New York State Oil, Gas and Solution Mining Law, Article 23 of the Environmental Conservation Law, the regulations promulgated thereunder, and the Order on Consent. Mr. Dahl also informed Mr. Crooks that as of August 11, 1998, the Department could impose a stipulated penalty in the total amount of $83,300 due to his noncompliance with the order on consent.
- Mr. Crooks and Mr. Dahl met to discuss the matter after Mr. Crooks received the Notice of Violation. Mr. Dahl provided Mr. Crooks with the names of individuals who are in the business of plugging wells. Mr. Crooks told Mr. Dahl that he understood what he had agreed to do when he executed the order on consent, and that he would get back to Mr. Dahl with his efforts to come into compliance with its terms.
- As of November 18, 1998, Mr. Crooks had not produced or plugged and abandoned any of the remaining 13 wells and had not provided Mr. Dahl with a schedule to come into compliance with the terms of the order on consent.
- On November 23, 1998, Lee Zimmerman, a Department Staff attorney, caused to be served from the Department's Region 9 office in Buffalo a motion for order without hearing, addressed to Mr. Crooks at 8797 Tug Hill Road, Machias, New York, 14101.
- Department Staff's motion papers, sent by certified mail, were received by a Kim Crooks upon delivery on November 25, 1998.
- The Respondent has defaulted, no timely response to Staff's motion having been received by the Department.
The Respondent, Fred H. Crooks, violated a consent order he signed on May 16, 1994, by failing to produce or lawfully plug and abandon non-producing wells according to the schedule set out in that order. By plugging three of the 16 wells by May 1, 1995, Mr. Crooks complied with one of the order's requirements. However, by failing to subsequently produce or lawfully plug and abandon any of the other 13 wells, Mr. Crooks violated another requirement in the order as of May 1, 1996, and remained in violation as of November 18, 1998, when Mr. Dahl executed the affidavit which is attached to Department Staff's motion.
Given the stipulated penalty of $100 for each day that affected wells remain non-producing or unplugged in violation of the order, Mr. Crooks owed the Department $83,300 on August 11, 1998, as noted in Mr. Dahl's notice of violation. The unlawful abandonment of the wells was a violation not only of the consent order, but also of 6 NYCRR 555.1, which controls the abandonment process.
My fact findings concerning the Respondent's violations are based on Mr. Dahl's affidavit. Mr. Crooks submitted no affidavits or other evidence of his own, leaving Mr. Dahl's assertions uncontested for the purpose of this proceeding.
The monetary relief requested by Department Staff in its motion ($45,000) is lawful since it is considerably less than what is authorized by the consent order and the relevant statute fixing administrative sanctions [Environmental Conservation Law Section 71-1307(1)]. Staff proposes that the $45,000 be apportioned as $5,000 for each of nine wells not produced, plugged and abandoned, or sold by May 1, 1998, in violation of the consent order, and this is confirmed in my proposed Commissioner's order.
Staff proposes that the Commissioner's order also establish a schedule for the production, lawful plugging and abandonment, or sale of the 13 remaining wells. That schedule generally reconfirms obligations that the Respondent agreed to undertake when he signed the consent order in 1994. Because of this, and in the absence of any answering papers by the Respondent, the schedule cannot be considered objectionable.
Conclusion of Law
The Respondent, Fred H. Crooks, violated 6 NYCRR 555.1 as well as a Department consent order he signed, by failing to meet that order's schedule for the production or lawful plugging and abandonment of wells in his lease.
- The Respondent should be assessed the $45,000 penalty requested by Department Staff, since it is authorized by the consent order and Mr. Crooks has presented no facts to suggest that the penalty is disproportionate to the violations he has committed.
- Also, Staff's proposed schedule for the production, lawful plugging and abandonment, or sale of the wells that have not already been plugged and abandoned basically reconfirms the Respondent's existing obligations, while affording him a new six-month opportunity to redress his current violations. The schedule is reasonable and should be adopted by the Commissioner.