Fox 31 Story Misses The Mark

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Denver’s Fox 31 wants you to believe that (a) Colorado isn’t doing enough to monitor energy development and that (b) the TV station had a hard time working with WPX.

Neither point is true. We’ll expose the inconvenient facts that were ignored or missed. Either way, in their own words they “dug deep for months” and still didn’t get it right.

BAD MATH

Fox reported that “companies like WPX only have a 10% chance of being inspected in a given year.” Let’s look at the numbers.

In 2015, WPX’s operations in Colorado were inspected by state regulators roughly 1,500 times. That’s right, 1,500.

That equates to four inspections every single day of the year. Put another way, at least one of our sites was inspected every two hours during a typical work day.

The director of the state’s primary oil/gas enforcement agency is on the record saying just about the same thing.

In a print interview published on Oct. 23, COGCC Director Matt Lepore said that “thanks to the increased authority and budget coming out of 2014 task force changes, the Colorado Oil and Gas Commission has more than doubled its enforcement staff.”

In the news coverage, “he said that the COGCC inspected 30,000 wells last year, and generally can inspect wells at least once every 15 months,” adding that “I don’t feel like there are dark things going unseen.”

To us, that’s closer to a 100% chance of being inspected, not 10%. Let the record note that we provided Mr. Lepore’s comments to Fox.

But those facts were contrary to the story Fox wanted to tell, so they relied solely on remarks from a different state agency (the CDPHE) that covers all industries in Colorado, not just oil and gas like the state’s primary enforcement arm, the COGCC.

Lepore’s reference to 2014 is critical, too. That’s when the state (a) increased maximum fines by not just double, triple or quadruple, but 15 times higher (b) gave regulators authority to revoke permits and (c) doubled the number of enforcement staff.

That info is hiding in plain site via (a) state records (b) media coverage and (c) content we provided to the station. In fact, here’s one of the hits on our first Google search. Just because Fox’s Problem Solver Joe St. George was working in a different media market in 2014 doesn’t make the omission excusable.

ENTER WPX

Fox’s story highlighted a desire to “start a conversation” about oil and gas.

Actually, WPX has had thousands of conversations in Colorado about natural resources via the tours we’ve given to schools, environmental groups and basically anyone who asked.

In 2007, we also founded an organization on the Western Slope called Community Counts that fosters open lines of communication between residents and operators.

We were first contacted by Fox on Wednesday, Sept. 7. We responded the next morning via email, saying, “We’ll be happy to talk with you about your story over the phone today and answer any questions you have.”

We then had a series of conversations by phone and email over the next six weeks. And yes, we tried to talk in-person, too, but when a schedule conflict arose we offered to do a taped phone interview instead. Preferable? Of course not. Still accessible? Completely.

Unbeknownst to WPX, Fox had already sought out media credentials to a technical conference in Denver where a WPX employee from North Dakota was going to speak. This happened three days before we informed them about our need to do a “phoner.”

We also learned that Fox asked for those credentials to the event to “talk with companies about their water technology and why it’s important.” 

According to first-hand accounts, only one thing happened. Our North Dakota employee was ambushed by a camera and a microphone – an employee whose presentation highlighted that he had worked in Pennsylvania and North Dakota, not Colorado.

No notice. No time to allow our person to prepare. No request to WPX’s press office to speak with an employee (like every other media outlet does). Just the evidence of a tactic widely criticized and denounced within most media circles.

Mere hours later, Fox conducted the regularly-scheduled phone interview with WPX’s spokesman, never making mention of the ambush interview. Wonder why.

THE REST OF THE STORY

Fox, to no surprise, emphasized some of our imperfections, including a recent $99,000 fine for housekeeping items we fixed to prevent erosion, the height of berms, the placement of hay bales and to prevent mud from tracking on a county road.

But like Paul Harvey says, what about the rest of the story? For starters, we always care about doing the right thing. Compliance is everyone’s job at WPX. As we say in our core values: if we miss the mark, we’ll learn from it and get better.

Second, the story mentioned spills, but didn’t tell you how many hundreds of millions of gallons we keep safe and secure in our systems (even though we provided those stats, too). Our success rate for keeping water and fluids where they’re supposed to be – in pipes, tanks, equipment and trucks – averaged 99.9% in Colorado.

Third, we’re doing a lot right. Federal officials, state regulators and trade groups have publicly praised our innovations, best practices and environmental protection measures in Colorado roughly two dozen times. See for yourself.

But the last word here deserves to go to our neighbors and landowners who worked with us for years in Colorado. You can see and hear their stories in these videos:

VIDEO: WHAT THE COMMUNITY SAYS ABOUT WPX

VIDEO: WHAT A LANDOWNER SAYS ABOUT WPX 

How Energy Taxes Fund Public Improvements

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WPX’s Susan Alvillar (right) gives remarks at a recent news conference along with Gov. John Hickenlooper (left).

Last year WPX paid $11.6 million in state severance taxes in Colorado and $66 million in royalties to Uncle Sam for our in-state wells on federal lands. Colorado also receives a share of the royalties we pay to the federal government.

After the state collects taxes from WPX and scores of other energy producers, along with its share of royalties from the federal government, some of that money comes right back to help fund public improvements on the Western Slope.

It’s all made possible by a grant program dating back to 1977 that is administered by the state’s Department of Local Affairs (DOLA).

Last year Colorado issued $78 million in grants to help pay for improvements in more than 500 communities and school districts across the state.

“This grant program is a valuable tool for Colorado’s smaller and rural communities,” said Gov. John Hickenlooper. “With these funds, communities are able to plan for and implement substantial capital improvements, essential public projects and other services.”

According to the state, 8.66 jobs are created for every $1 million in grants. Since July 2012, the program has awarded $150 million in grants, creating an estimated 1,300 jobs supporting grant-funded projects.

WPX’s Susan Alvillar is one of the members who serves on the advisory committee that supports this process. Susan and her fellow committee members are appointed by the governor and confirmed by the state senate.

She made some remarks at a recent news conference announcing the results of the grant program, along with Gov. Hickenlooper and others.

“I am proud to say that I work for an industry that generates the funds we are speaking about today. What a great feeling to know that vital community improvements such as water tanks, community centers, and upgraded roads are made possible through Colorado’s rich mineral resources,” she said.

“My company and our industry are committed to safe and responsible energy development so that this fund continues to thrive.”

“In fact, in 2014 alone, WPX Energy contributed over $75 million in state severance taxes and federal royalties, not counting other taxes,” Alvillar said.

Caution + Care = 99.9% Success Rate

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Water management is one of the things that companies who produce oil and gas have to do really well. At WPX, we work with care, train our employees and have invested millions of dollars in water treatment and recycling facilities.

Reporting spills is part of this process and our commitment to comply with state requirements. Today the Colorado Oil and Gas Conservation Commission requires operators to report any spill involving one barrel (42 gallons) or more of fluid.

In 2014, WPX handled more than 19 million barrels (798 million gallons) of water, liquids and fluids in our local drilling and production operations in the Piceance Basin. For some context, that’s enough liquid to fill more than 1,200 Olympic-sized swimming pools.

So how’d we do? Of that amount, we kept 99.983 percent of the water and fluids “in the swimming pool” so to speak, or more precisely, where that water was supposed to be – in pipes, tanks, equipment, trucks, etc.

The amount we spilled – 0.017 percent – was less than one quarter of one percent. We documented each of these occurrences – 85 reported in all totaling 3,400 barrels – according to requirements.

About a quarter of the spills occurred in areas where we had lined containment. Additionally, 90 percent of the 3,400 barrels stayed on drilling pads where we ultimately recovered about 87 percent of the spilled  volumes.

99.9 is a strong success rate, but we’re committed to constant improvement. Spill prevention is where we and our contractors can make the biggest, most beneficial impact.

How to Draw A Crowd in Parachute

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There’s a typically quiet room in the back of our Parachute office that transforms into a bustling activity center like clockwork.

It’s the monthly safety meeting, a standing-room-only event where about 200 people gather to discuss a critical aspect of our work at WPX: job safety.

To adhere to regulatory compliance and to keep certification up to date, safety meetings are required so employees can discuss operations in the field, as well as safety practices that can save lives and prevent accidents.

At a recent meeting, for example, leaders of the safety meetings gave a presentation about the company’s Emergency Response Plan.

“Every month we choose a different topic so we can train everyone as a group,” says Kevin McDermott,  safety supervisor in Parachute.

“We pack em’ in. These are the days when our parking lot is filled with trucks of those who typically spend their days checking our natural gas wells, McDermott says.

WPX takes safety seriously. In 2013, our employees in the Piceance Basin worked a total of 516,299 hours and drove 5.5 million miles without a lost-time accident, or LTA. An LTA is a specific reportable incident that employs standards and criteria set by the Occupational Safety and Health Administration.

In 2012, our Piceance employees worked 480,926 total hours, drove 5.3 million miles and had two LTAs.

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WPX Recognized for Reducing Emissions

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WPX Energy was recognized this week by the state for its commitment to reducing emissions and helping protect air quality.

One of the rigs WPX uses for drilling in the state’s Piceance Basin in western Colorado runs entirely on natural gas. WPX deployed the new rig last year.

“Using natural gas as a fuel source is better for the environment and helps reduce costs,” said Jeff Cutler, Piceance Basin drilling manager. “Compared to diesel fuel, there’s a 24 percent reduction in overall total emissions and an 80 percent reduction of ozone compounds.”

During initial operations in 2013, the rig saved WPX Energy more than $7,000 in daily fuel costs, and reduced fuel consumption by 85 percent. With less fuel required, truck traffic was also reduced — resulting in less dust, noise and impact to roadways, which benefits neighbors and the local community.

WPX supplies natural gas to the new rig from its existing well pads, where production already occurs.   The company has developed more than 4,400 natural gas wells in western Colorado over the years. “Using existing well pads provides a direct fuel source, reduces additional surface disturbance, and takes advantage of the pipelines and infrastructure that are already in place,” said Cutler.

The rig is also capable of moving between multiple wells on a single pad without being disassembled. The rig has four natural gas engines that provide the required horsepower needed to drill both vertical and horizontal well depths between 8,000 to 15,000 feet.

Successfully using the natural gas rig has led WPX to convert six other rigs in Western Colorado to dual-fuel engines that use a combination of both natural gas and diesel.

This is the 16th honor WPX has received from the Colorado Oil and Gas Conservation Commission. The agency also has recognized WPX for water management, water recycling, water quality protection, green completions, use of new technology, reclamation and best practices.

Over the past decade, WPX has invested more than $7.5 billion to develop its holdings in western Colorado’s Piceance Basin. WPX plans to spend $475 million to $495 million in Colorado in 2014.

Water Recycling

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In the Piceance Basin, WPX recycles nearly 100 percent of our water. Typically in this industry, much of water hauling is done by trucks. Instead, we built our own state-of-the-art water management systems in Parachute and Rulison, Colo.

Why does WPX make the extra effort?

It’s not only less expensive for us to recycle the water and reuse it in our Colorado operations, but it also reduces truck traffic and noise significantly — we’ve already eliminated some 90,000 truck loads.

That results in less wear and tear on the roads, and it’s more environmentally friendly to continue to use the same water, especially in drought years. It make sense — by recycling and reusing our produced water, we don’t have to use as much fresh water.