ConocoPhillips faces potential $914,000 fine over Alaska gas blowout, leak

ANCHORAGE, Alaska (AP) — ConocoPhillips Alaska faces a potential $914,000 fine over what a state regulatory agency called a “shallow underground blowout” of a well that released natural gas at the company’s Alpine field on Alaska’s petroleum-rich North Slope last year.

An investigation by the Alaska Oil and Gas Conservation Commission found the company violated several provisions of state law during missteps leading up to the leak and during the response, according to a proposed enforcement notice that was released Wednesday. The commission oversees oil and gas drilling in the state.

ConocoPhillips is reviewing the commission’s findings, said Rebecca Boys, a company spokesperson.

ConocoPhillips has 15 days to challenge the fine, a standard part of the process, the Anchorage Daily News reported.

There were no reports of injuries during the gas leak, which was first discovered on March 4, 2022 and resulted in about 7.2 million cubic feet (216,000 cubic meters) of natural gas being released into the atmosphere over several days and surfacing at multiple areas of a drill pad. Days after the leak began, the company rerouted much of the escaping gas to a gas processing facility, but small amounts leaked intermittently for weeks.

About 300 workers were temporarily removed from the site amid the leak, which also raised concerns with residents in the nearby village of Nuiqsut. The leak also halted oil production from the drill site.

Commission Chair Brett Huber said the proposed civil penalty follows the agency’s investigation and a hearing during which the agency heard from company officials. The company “was at all times cooperative” and voluntarily implemented new policies and procedures to prevent similar incidents in the future, Huber said.

Most of the proposed fine, $760,000, is associated with a failure to install cement around a portion of the waste disposal well where the blowout occurred. Cement could have confined gas from a shallow underground zone to the wellbore, preventing widespread release of gas, the enforcement action indicates.

Boys said ConocoPhillips remains committed to working with the agency “and to implementing our learnings into our future projects and operations. We recognize that it’s a privilege to operate on the North Slope and in Alaska.”

The company separately is seeking to develop the huge Willow oil project on the North Slope. The project was approved by the Biden administration earlier this year but faces legal challenges from opponents.

Lois Epstein, who owns LNE Engineering and Policy and provides consulting services to conservation groups and tribes, said she hopes the commission strengthens regulations to ensure that improvements made by ConocoPhillips to prevent future incidents apply to other companies as well.

The need for proper identification of potentially dangerous gas zones and proper protections with cementing are critical, as is making sure that procedures are properly followed when fluids are pumped into wells and pressure limits are exceeded, she said.

The agency notice was signed by Huber and commissioner Jessie Chmielowski. Commissioner Greg Wilson, a longtime former ConocoPhillips geologist appointed to the commission last fall, recused himself from the proceedings.

The U.S. Environmental Protection Agency also is investigating the incident, according to the commission’s notice.