October 8, 2013

Colorado flooding implicates insurance coverage for energy companies

Source: http://www.lexology.com, September 30, 2013
By: John D. Shugrue, Kevin B. Dreher and Emily Garrison, Reed Smith LLP

The damage caused by the recent flooding in Colorado is catastrophic and has evermore changed the lives of many who live in and around the affected communities. As the waters recede, the impact of the destruction is being uncovered. Many roads, houses, and businesses have forever been washed away, and the recovery effort will take years to rebuild what has been lost.

Among the businesses hit the hardest were the oil and gas industry. There are about 20,000 oil and gas wells across Weld County, Colorado, and about 1,900 of them had to be closed off — “shut in” — as the floodwaters poured down from the mountains and spread out across the plains. When the floodwaters reached Colorado’s drilling center, they poured into wells, broke pipes and swept huge oil tanks off their foundations. The state has counted at least a dozen “notable” spills stemming from the catastrophic floods. According to officials, the heavy floodwaters caused more than 37,000 gallons of oil to spill into or near rivers, and the state’s oil and gas industry is racing to assess and fix the damage to wells, pipelines, and storage facilities that occurred during the storm.

While the resulting environmental impact caused by the recent Colorado flooding may pale in comparison to other catastrophic disasters, such as the Deepwater Horizon blowout or the Exxon Valdez oil spill, the physical damage and loss of operations sustained by many oil and gas companies that operate in the affected area will be significant. Fortunately, the affected companies likely have insurance coverage in place to assist with physical repairs to wells, pipelines, and storage facilities, as well as coverage to assist with any environmental cleanup, resultant third-party claims, and loss of business income and production.…

September 26, 2013

Floods Exacerbate Damage of Fracking in Colorado

Source: Targeted News Service, September 24, 2013
Posted on: http://envfpn.advisen.com

As floodwaters continue to rage across the Front Range, our first thoughts are with the victims and their families. And to add insult to injury, Coloradans now have reason to be concerned about their water quality. Oil and gas industry infrastructure in the region has been severely compromised. Toxic wastewater tanks have been spotted floating in the floodwaters, pipelines are broken and sagging, and the state is now tracking several oil and gas spills.

“We were concerned about fracking before the flooding,” said Lindsey Wilson, field associate with Environment Colorado. “But now, oil and gas spilling into the floodwaters, contaminating drinking water, is an added exclamation point to the long list of dangers that fracking has brought to Colorado.”

The largest spill occurred on Wednesday when about 5,225 gallons of crude oil flowed into the South Platte River near Milliken. Nearly 2 million residents of Denver rely on the South Platte for their drinking water and just over 70 percent of Coloradans rely on the South Platte as their main water source.

“Toxic chemicals, such as cancer-causing benzene, have mixed with floodwaters posing a severe public health hazard,” said Wilson. “While we do not know the full extent of the contamination, we know that thousands of Coloradans’ drinking water could be affected.”

The oil and gas industry is currently exempt from some key provisions of our nation’s bedrock environmental laws such as the Safe Drinking Water Act and our nation’s hazardous waste law. The thousands of gallons of drilling waste mixing with floodwaters reinforces the need to close these toxic loopholes that leave communities vulnerable to water contamination.

Environment Colorado will be releasing a report Oct. 3, entitled “Fracking by the Numbers,” which will quantify key measures of fracking threats to our environment and health.


September 25, 2013

More oil, gas damage reported throughout Weld County

Source: Greeley Tribune (CO), September 21, 2013
Posted on: http://envfpn.advisen.com

The oil and gas carnage in Weld County has grown, now with three exploration companies noting problems due to flooding and almost 22,000 gallons of oil either on the ground or in floodwaters.

As of Friday afternoon, four spills had been reported by Anadarko Petroleum Corp., and one by Bayswater Exploration. Additionally, oil production equipment at a PDC Energy site has largely washed away.

The Colorado Oil and Gas Conservation Commission estimates roughly 22,000 gallons of oil have been spilled thus far.

But that may not be the half of it. Only 30 percent of the impacted areas has been assessed, reported Todd Hartman, of the Department of Natural Resources, which oversees the COGCC. Many areas, he reported, continue to be inaccessible due to either closed roads or floodwaters.

“The COGCC is tracking five notable releases, with volume amounts confirmed for four of those,” Hartman wrote.

Those include releases of 323 barrels (13,566 gallons) and 125 barrels (5,250 gallons) from Anadarko locations, reported Thursday. Two additional releases of 56 barrels (2,352 gallons) at an Anadarko location and 21 barrels (882 gallons) at a Bayswater Exploration and Production location also have been confirmed, Hartman reported.…

May 31, 2013

Rainstorm Causes Grief

Source: Great American Environmental Division, May 2013

During a particularly heavy storm, rain water gathered in a puddle on the roof of an office building. Due to a clogged drain, the water level rose higher than the installed protective flashing and entered the drywall behind office furniture. Over time, mold began to grow in the obscured area and was not discovered until odors were noticed, leading to a costly clean up and the potential for bodily injury claims from tenants.…

December 18, 2012

Homeowners won’t be fined for oil spills caused by Sandy: Some residents have received a scam letter threatening 25G fines for not cleaning up promptly

Source: Staten Island Advance (NY), December 17, 2012
Posted on: http://envfpn.advisen.com

The state wants Staten Island property owners affected by Hurricane Sandy to know they won’t be fined for oil spills on their property.

This comes on the heels of a scam letter threatening daily fines of $25,000 per day for failing to clean up storm-related oil spills.

A solicitation letter, sent out by GC Environmental, Inc., a private company in Bayshore, N.Y., falsely claims to be from the “Department of Remediation,” according to the state Department of Environmental Conservation (DEC).

DEC officials said the agency will not fine homeowners for discharging oil without a permit or for delaying cleanup of residential oil spills due to Sandy.

“In the immediate aftermath of the hurricane, DEC provided spill cleanup services to more than 2,200 residences. For these actions, DEC will not seek cost recovery from the homeowners,” said Joe Martens, DEC Commissioner. “It is unconscionable that a company would try to take advantage of hurricane victims by threatening fines and then promoting the company as the solution.”

The GC Environmental letter points out sections of the New York State Navigation Law that requires those responsible for oil spills to promptly clean up those discharges, and that there could be a penalty of $25,000 a day for failure to complete that cleanup. The letter also states that any costs related to DEC’s actions in spill cleanup would be the responsibility of the spiller.…

July 1, 2011

Asbestos found in Arroyo Chico project

Source: http://www.kold.com, June 28, 2011
By: Bud Foster

A few years ago, it was not unusual for people to use washes and arroyos as their own personal garbage dumps.

It was not illegal, it was convenient and some thought it was a good way to help prevent flooding by shoring up the sides.

Those days are long gone, but what’s left behind is, in some cases, just being discovered.

One of those things is asbestos.

“We did find some asbestos when we were constructing Phase II of the Arroyo Chico project, says Chris Cawein, deputy director of the county flood control district.

Construction workers found a mix of things including siding and roof tiles that contained the asbestos.

About 1500 cubic feet of soil and debris had to be removed from two sites and another one will be cleaned up later this week.…

July 21, 2010

Ma Nature’s Next Hissy Fit

Claims Magazine (06/10); Brownlee, Ken

Ken Brownlee discusses the plethora of natural disasters throughout the U.S. as well as the ins-and-outs of being prepared with the proper insurance. Central New England recently faced a bout of devastating floods, and Brownlee expects that most residents did not have flood insurance. As a result, the cash-strapped states will be forced to raise taxes and, because some areas have been declared federal disaster zones, the rest of the nation will have to pay up as well. Floods have long been on the list of natural disasters to have insurance for, but “every time there is a major flood, there are those who thought it would never happen to them, and who did not purchase flood insurance.” Brownlee next touches on man-made disasters, some of which are covered by insurance already and some of which pose challenges for insurance coverage. Product or pollution liability, airline crashes and bridge collapses are all purely man-made and are covered. Things like grassland and forest fires as well as mudslides, which can be a combination of man-made and natural disasters, are often not covered. Insureds and insurance adjusters must plan ahead with the knowledge that both of these perils — man-made and natural disasters — are not covered under the same form. Thus, homeowners must adjust their policies accordingly. Mother Nature, according to Brownlee, has an entire cookbook full of damage recipes: floods, tornadoes, hurricanes, tsunamis, mudslides, earthquakes, freezes, droughts, snow, rockslides, and the perils of active volcanoes. For Brownlee, this all serves to reaffirm the importance of having key claims personnel to work with insureds who have faced natural disasters.…