North Dakota regulators fine Utah company $687,000 for saltwater disposal violations

Energy Associated Press

North Dakota regulators assessed a $687,000 fine Wednesday against a Utah company for violating saltwater waste disposal rules.

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The North Dakota Industrial Commission, a three-member panel that includes Republican Gov. Jack Dalrymple, approved the sanction against Springville, Utah-based Redemption Energy LLC. The matter now goes to North Dakota District Court for collection.

Redemption Energy did not immediately return telephone calls from The Associated Press on Wednesday.

Court documents said the company constructed a saltwater disposal well before getting permission for it and also improperly stored oilfield waste.

Saltwater is a naturally occurring, unwanted byproduct of oil and natural gas production that is up to 30 times saltier than sea water. The briny liquid also may contain petroleum and residue from hydraulic fracturing operations. Companies commonly dispose of it by injecting it underground.

Lynn Helms, director of the state Department of Mineral Resources, told the commission the company showed "very little regard" for North Dakota's rules and regulations over the past three years.

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Helms' agency regulates the state's oil and gas industry and is overseen by the Industrial Commission. An administrative law judge recommended the amount of the fine, which included $3,143 in investigation costs.

North Dakota law provides a maximum civil fine of $12,500 a day for violating waste disposal rules.

Helms told the Industrial Commission, which also includes Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem, that is was unclear Wednesday whether the fine can be collected from the company.

"It's unlikely they have that kind of money sitting somewhere to pay that fine," Helms said. "But if that is the case, the Industrial Commission can shut the company down."

Owners and employees of the company also could be barred from starting another business in North Dakota, a move the governor said would "absolutely" be the right thing to do.