News Column

Problems Found at N.M. Gas, Oil Wells

Jun 17 2013 6:07AM

Nearly 240 oil and gas wells in southeastern New Mexico that state officials approved for electric hookups last year failed to pass recent after-the-fact electrical safety inspections.

Of about 276 oil and gas well sites inspected over the past six weeks, about 85 percent received a "failed" grade and correction notices were issued, according to a Journal review of inspection records. None has been ordered to stop operations.

Gov. Susana Martinez's office called for the belated inspections after learning that the state Construction Industries Division had parked more than 500 inspection requests in a computer file because there weren't enough inspectors to do the work.

The governor's directive came after the Journal made inquiries in April about the computer file dubbed E-Vacant.

CID spokesman S.U. Mahesh told the Journal in a May 30 email that no oil and gas well sites failed the recent inspections.

The Journal , however, checked an agency website last week and discovered more than 270 oil and gas well inspection reports filed by state inspectors who have been whittling down the E-Vacant backlog for weeks.

The reports listed the address of the site inspected, the date of inspection, comments from the inspector and included a box to show the result. The words "Failed-Failed" were entered in the result box on 236 inspection reports. The rest were marked "Pass."

Asked to explain, Mahesh replied in an email that inspectors used the word "failed" on the reports instead of "entering it as a passed inspection with corrections ... . This is simply a data entry issue ... ."

Correction notices issued by inspectors showed state and national safety code violations related to installation, grounding equipment and wiring. Other violations included failing to properly identify conductors and other equipment.

The inspection reports also show that some inspectors faced potential health hazards at well sites, encountering signs warning of poisonous gas.

Hydrogen sulfide gas, a natural byproduct of well drilling, is toxic and flammable, according to the U.S. Occupational Safety and Health Administration.

CID managers told the inspectors not to inspect sites with warning signs, but safety equipment and training to deal with the conditions didn't arrive until more than three weeks into the inspections, purchasing records show.

Mahesh said no life-threatening situations have been discovered, no red tags issued and no oil or gas wells have been ordered shut down pending completion of the corrections.

Inspections are supposed to be performed and corrections completed prior to the state granting permission for electricity connection.

Rather than ask the oil and gas producers to wait, CID began to issue "releases" last June, allowing electricity to be turned on at the sites and drilling operations to begin.

Two inspectors were eventually hired to work in the southeastern region, but the number of pending inspection requests assigned to E-Vacant kept growing. By mid-April, the number hit 512.

Some agency officials believed there was no way to catch up.

But at Martinez's direction, a team of nine inspectors from around the state was dispatched in early May with orders to eliminate the backlog within 90 days.

Martinez spokesman Enrique Knell told the Journal on Friday that even though no "life safety" issues have arisen requiring the shutting down of well sites, "correction notices of any magnitude are still issues that should be addressed."

Overtime at 350 hours

The team of inspectors sent out to check the sites in recent weeks has racked up more than 350 hours of overtime. But their work wasn't so easy.

With electricity allowed at the sites, records show, inspectors at times reported being unable to access certain electrical equipment, because the site was "energized" or equipment was sealed by the utility.

Performing an electrical inspection on such sites with the electricity already turned on "poses many concerns," said David Clements, executive director of the the International Association of Electrical Inspectors.

With hydrogen sulfide gas, "potential victims may be unaware of its presence until it is too late," Clements stated in an email to the Journal . "Knowing what to do or how to proceed in the presence of this gas could mean the difference in life and death."

Moreover, he said that electricity "mixed with the possible presence of flammable substances can result in serious accidents."

Mahesh said CID managers ordered gas sensors, training and fire retardant clothing in mid-May as soon as they realized the hazards inspectors might be facing.

The cost of the training and equipment came to about $2,400.

Training on H2S gas was provided May 28. The sensors and fire retardant gear arrived at the CID on June 4 -- about a month after oil and gas well inspections first began, records show.

Inspectors also found that additional work had been performed at many well sites without the proper permits, Mahesh's email stated.

Annual permit shelved

Because of the burgeoning number of new oil and gas wells in the southeastern part of the state, CID officials had planned to roll out an annual electrical permit option for oil and gas wells by this summer. That would have eliminated the need for individual inspections.

Only spot checks would have occurred, with the state relying on the oil and gas producers and their contractors to ensure compliance.

But the governor's office wasn't so keen on the idea when queried by the Journal in April and wanted further study.

Knell said on Friday it is now apparent, with the recent code violations found during inspections, "that it's good for inspectors to visit these sites individually."

The annual permit option has been shelved. But other solutions are under evaluation.

CID officials say inspections of oil and gas wells in New Mexico have been hit or miss for years.

"Inspectors commonly performed utility releases without ever inspecting the well site," Mahesh said in an email. "This practice is no longer allowed."

Over the past year, however, a state electrical inspector assigned to the Four Corners area signed off on 66 oil and gas inspections without physically visiting the sites, Mahesh said in an email on Friday.

He said the practice was identified by CID managers after the E-Vacant inspections became an issue. The inspector has been instructed to go back and inspect those sites by the end of the month.

Systematic struggle

Records show that months into new Martinez administration in early 2011, some CID managers contemplated resurrecting an alternative inspection procedure first proposed in 2008 by the administration of Gov. Bill Richardson to address "resource shortages," state records show.

Under the plan, inspectors would consider digital photographs submitted by electrical contractors to ascertain whether applicable codes were met, but were supposed to perform the inspection in person within 20 working days after allowing electric service at the site.

Mahesh said that option was never approved by state Regulation and Licensing Superintendent J. Dee Dennis Jr., who oversees the CID, "and the administration was never aware this practice was in place."

Knell said there appears to have been a systematic struggle in state government over the past decade to keep pace with inspections.

E-Vacant helped to highlight the problem by providing a record of the sites that inspectors had not been able to get to, he said.

Asked whether the governor's office would seek to add more inspectors to insure against future backlogs, Knell said future strategies "may involve additional staff or contractors, perhaps both."

Ensuring compliance

Contractors or permit holders typically have from 10 to 14 days to make corrections ordered by state inspectors. But there is no such deadline on E-Vacant oil and gas wells that didn't pass inspections.

"We ... will work with producers and contractors to fit their schedules over the next couple of months. Time will be needed by the contractors to go to the sites and perform the repair work," Mahesh said.

Then state inspectors will travel back to the sites to ensure compliance. In cases where inspectors found violations related to labeling and signage, the CID will accept photographs as proof corrections were made.

Clements said any violation of the National Electrical Code is serious "and has a potential to adversely affect the equipment or the public in general."


(c)2013 the Albuquerque Journal (Albuquerque, N.M.)

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Source: Copyright Albuquerque Journal (NM) 2013

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