Oklahoma-based oil and gas production company to pay $1M for 2011 spill

(Denver, Colo. – January 31, 2014) Nadel and Gussman Rockies, LLC (NGR), an oil and gas production company based in Tulsa, Okla., will pay a total of $1 million in fines, restitution and community service contributions after previously pleading guilty to Clean Water Act (CWA) violations stemming from its role in the illegal discharge of more than 4,700 gallons of crude oil into a tributary of the North Platte River near Rawlins, Wyoming. The company is also required to implement a new compliance program to ensure future compliance with all environmental laws and regulations applicable to oil and gas companies leasing lands from the federal government.

Today, U.S. District Judge Alan Johnson ordered NGR to pay a $357,500 criminal fine and a total of $430,500 in restitution, of which $200,000 will go to the Oil Spill Liability Trust Fund, a federal fund used to finance oil spill response activities and provide compensation for damages. The remaining $230,500 will go to Carbon County, Wyo., the county in which the oil spill occurred. Of that amount, $80,500 will be used to purchase equipment and supplies necessary to responding to and cleaning up oil spills in the county, while the remaining $150,000 will be equally distributed to the Little Snake River, Saratoga-Encampment-Rawlings, and Medicine Bow Conservation Districts to improve water quality and conserve local natural resources.

NGR will also make a community service payment of $212,000 to be divided equally between the Yellowstone Park Foundation and the Grand Teton National Park Foundation for projects to enhance, protect and preserve the natural resources of each park.

“The defendant’s production and storage practices put the environment at serious risk,” said Jeffrey Martinez, Special Agent in Charge of EPA’s criminal enforcement program in Wyoming. “In addition, the company provided false information to EPA and BLM emergency responders, and did not begin cleanup activities until ordered to do so by the EPA. It is appropriate, therefore, that in addition to a criminal fine, the company will be required to pay to improve Wyoming’s natural environment and to implement a compliance plan to ensure this doesn’t happen again.”

“This case demonstrates the BLM’s commitment to protecting natural resources and holding accountable those who would compromise the health of the public lands and waterways,” said Shannon Tokos, Chief of Bureau of Land Management’s (BLM) Special Investigation Group.

The case began in May, 2011, when a local resident noticed an oily sheen on Emigrant Creek near Rawlins. BLM employees confirmed there had been a discharge of oil into the creek and that it appeared to have originated from an oil tank storage system owned and operated by NGR. BLM requested EPA’s assistance for emergency clean-up. A joint criminal investigation conducted by EPA’s Criminal Investigation Division and BLM’s Special Investigation Group later determined that Patrick Ely, an independent contractor for NGR, routinely drained production water from NGR’s tank system directly to the ground as authorized by NGR Operations Manager, Hugo Cartaya. As a result, about 375,000 gallons of production water containing high levels of arsenic and 113 barrels of oil – approximately 4,746 gallons – were discharged in mid-April, 2011. Although Ely reported the oil spill to NGR Operations Manager Hugo Cartaya, the spill went unreported to the National Response Center until directed by the BLM and EPA.

In 2012, Patrick Ely pleaded guilty to CWA violations and making false statements. On November 22, 2013 NGR pleaded guilty to violating the CWA by negligently discharging a harmful quantity of oil into a waterway under federal jurisdiction.

In September 2013, the Grand Jury in Cheyenne, Wyo. indicted Mr. Cartaya, charging him with eight felony counts, including discharge of oil into the waters of the United States and making false statements. An indictment is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. Mr. Cartaya has pleaded not guilty and his trial is scheduled to begin on February 18, 2014.

The CWA makes it unlawful to discharge oil or hazardous substances into waters of the United States or adjoining shorelines in quantities that may be harmful to the environment or public health. Oil spills are known to cause both immediate and long-term harm to human health and ecosystems, including the suffocation of wildlife and the contamination of nesting habitats.

The case was prosecuted by the U.S. Attorney’s Office in the District of Wyoming. It was investigated by agents of the EPA’s Criminal Investigation Division and BLM’s Special Investigation Group.

For more information on the Clean Water Act, visit: http://www2.epa.gov/laws-regulations/summary-clean-water-act

For more information on reporting oil spills, visit: http://www2.epa.gov/emergency-response/national-response-center