FX Energy to plug wells at site of NW Mont. spill

AP News
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Posted: Jul 19, 2011 3:39 PM
FX Energy to plug wells at site of NW Mont. spill

FX Energy Inc. plans to permanently shut down two oil wells in northwestern Montana where a spill went unreported for a month and spread nearly a mile before being discovered, a company executive said Tuesday.

The company is filing notice with the Blackfeet Indian tribe that subsidiary FX Drilling Co. will plug the small wells on the Blackfeet reservation and dig up the connecting flow line that spilled up to 840 gallons of crude and contaminated water, FX Energy Vice President Andy Pierce said.

A neighboring landowner reported finding oil July 12, a month after the company had discovered the spill and fixed the line. An environmental response team says the oil traveled nearly a mile down a steep coulee, soiling the ground and filling pools of spring-fed water before reaching Cut Bank Creek.

The two wells combined produce only about a barrel of oil a day _ 42 gallons _ and have been offline since the leak was discovered, Pierce said.

"They're too close to the coulee, and whatever little oil they make, it's not worth it to us to have these kinds of problems," he said.

Sandra Watts, the tribe's attorney, said taking the wells permanently offline was fine, but they are only a small part of the company's oil production on the reservation. The tribe wants reassurances that other lines carrying oil are in good condition, she said.

"They've got a lot more wells up here (where) lines need to be checked," Watts said.

Environmental Protection Agency officials said they are looking into possible penalties against the company because the length of time for the spill to be reported. Tribal officials also were looking for answers as to why FX Energy did not inform them when the spill happened in June, Watts said.

The company has said the leak was due to a break caused by shifting ground during last month's rain and flooding. Pierce previously said there was no way of telling exactly when the break occurred, but the slow leak may have gone on for between 10 days and two weeks.

Officials with the tribe and EPA were only notified July 12 when a neighboring landowner reported the spreading oil.

Pierce clarified the timeline Tuesday, saying the spill was discovered June 12 and crews took the wells offline and repaired the flow line by the next day. Workers believed the leak was smaller than it turned out to be, only extending to a grassy area nearby, and so they didn't report the spill, Pierce said.

"We believed at the time that was the end of it," Pierce said. "Our guys cleaned up everything they could see. We thought it was a relatively small leak."

But a month later, the spill was found to have spread nearly a mile down the ravine, with some escaping into the creek that connects with the Marias River. Once an oil spill reaches water, the company has 24 hours to report it.

Pierce said the company didn't know the spill had gone beyond the oil field. There was no attempt to keep the information from tribal and governmental officials, he said.

"That would be silly. It's there. It's not like you can hide it forever," Pierce said. "As soon as we heard about it, we went into action and continue to do so."

Cleanup workers have constructed a berm and ringed the area with boom to prevent any more oil from reaching the water. They are digging out the contaminated areas by hand along the steep, treacherous ravine.

There have been no reports of wildlife affected, like the oiled birds and animals being spotted 350 miles away at the site of a larger pipeline break along the Yellowstone River.

The U.S. Fish and Wildlife Service said 19 oiled animals have been seen but have not yet been captured in the area near the break of an Exxon Mobil Corp. pipeline that spilled up to 42,000 gallons of crude oil. Crews have collected 10 dead animals for analysis, and another five have been captured for cleaning and care.