Grand County Clerk Diana Carroll told The Times-Independent last week that Danish Flats Environmental Services is $94,763.05 in arrears on its monitoring payments to the county.
At the same time, business activity at the site has dropped from $424,000 five years ago to $99,000 in 2013, according to Grand County Technical Inspector Lee Shenton.
“They’re less than a quarter of the volume they had in 2009,” Shenton said Aug. 14.
Open-air evaporation ponds at the facility process salty, hydrocarbon-laden water that is a byproduct of oil and gas exploration and production.
Much of that tainted water has been coming from oil and gas wells across Colorado’s Western Slope: Garfield County alone has 10,780 active wells, according to the Colorado Oil and Gas Conservation Commission.
Increasingly, however, rival companies are setting up treatment facilities within easier reach of major oil and gas operations in the Piceance Basin.
Shenton sees a correlation between the drop in business at the Cisco-area site and the rise of similar “produced water” treatment facilities on the other side of the state line.
“We know that there are competitors operating closer to the Western Slope, so it’s not exactly a surprise,” he said.
Truckers who serve the oil and gas industry now have the option of hauling produced water to Alanco Energy Services’ Deer Creek disposal facility in Mesa County. And pretty soon, they will be able to access a second Alanco facility in Mesa County: that company says its Indian Mesa site is expected to be operational in early 2015.
Other companies, including Concord Produced Water Services and Black Hills Plateau Production, also hope to get in on the action in Mesa County.
While those latter facilities aren’t in service yet, Shenton said he’s talked to a number of truck drivers who would rather utilize them, if they had their druthers.
“They would prefer to go to a closer facility because they make their livelihoods doing that,” Shenton said.
With fewer trucks going to and from Danish Flats these days, Shenton has noticed that most of the 13 active evaporation ponds appear to be somewhere between one-third to halfway full.
“In the last several months, I can tell you that it’s pretty obvious their business is off substantially,” he said.
Yet despite that reported decline in business, the company’s operations are not a “de minimis,” or minor, source of pollutants, Shenton said.
The company previously claimed otherwise, reporting in January 2012 that its annual emissions totaled one-hundredth of one ton, according to Shenton.
It came up with that figure based on measurements it took from activated carbon canisters that are commonly used to sample indoor air quality.
The Summa-process canisters may offer accurate representations of emissions inside enclosed spaces, according to Shenton.
“But sitting on a pole in inclement weather, they don’t even come close,” he said.
Accordingly, the Utah Division of Air Quality (DAQ) does not accept those measurements.
Actual emissions at Danish Flats were much higher than the company’s estimates, Shenton said.
In 2012, its operations released an estimated 332 tons of volatile organic compounds and 106 tons of hazardous air pollutants, according to Shenton.
Until recently, however, it continued to operate under a small-source exemption from state air quality regulations.
However, a DAQ review found that Danish Flats no longer met that criteria.
The company ultimately agreed to pay the agency a $50,000 civil penalty to resolve allegations that it did not submit a notice of its plans to expand its operations.
The wide-ranging agreement also settled allegations that it did not obtain state approval before it began construction work on that expansion. In addition, the settlement cleared up claims that the company failed to apply for a state operating permit under Title V of the federal Clean Air Act within a one-year deadline.
Both sides had been working toward a resolution even before Shenton began to monitor oil and gas operations in April 2011.
In December 2012, he reported that both parties felt an approval order was imminent.
“And sure enough, it was issued on Aug. 4 (2014),” he said.
According to Shenton, state regulators were aware that the company no longer qualified for a small-source exemption long before they issued any notices.
“The DAQ first warned them that they were out of compliance in August of 2013,” Shenton said. “But they had been in conversation with them many, many times and many months before that.”
Under the terms of the DAQ’s approval order, Danish Flats must install emissions-control equipment at the site within the next 18 months.
Shenton anticipates that the controls will lead to major reductions in emissions from the site.
“It doesn’t absolutely eliminate (them), but it knocks (them) way down,” he said.
Danish Flats Environmental Services Operations Manager Justin Spaeth did not return phone calls requesting comment, and a listed phone number for company CEO Jim Bradish is no longer in service.
But Spaeth told The Times-Independent in 2012 that the facility has always operated within state guidelines, and that it would continue to do so.
The company’s website also says that its commitment to environmental compliance is “second to none.”