Colorado flooding leads to oil spills

The accidental releases could create environmental problems -- and business issues for the state's growing energy industry.

By Bruce Kennedy Sep 20, 2013 1:19PM

Crude oil leaking from a flood damaged tank close to the South Platte river, south of Milliken Colorado on September 19, 2013 (© Andy Cross/The Denver Post via Getty Images)Experts say don't be surprised if the recent flood damage in Colorado exceeds $1 billion once the tally is finalized. But the financial and environmental costs related to the state's oil and gas industry are still being evaluated.

Federal and state officials are tracking at least 10 flood-related oil spills in Colorado, two of which are considered substantial. Anadarko Petroleum (APC) reported a pair of releases totaling close to 20,000 gallons that spilled into the South Platte and St. Vrain Rivers in Weld County, north of Denver.

An Environmental Protection Agency spokesman told The Associated Press both releases involved a mixture of oil and water. AP also quoted the Colorado Oil and Gas Association, which says of the 51,000 oil wells statewide, about 1,900 were shut down at the start of the flooding, but 300 are back online.

An Anadarko spokesman told The Denver Post that none of the company's hydraulic fracturing operations are in Colorado's flooded areas. Commonly called "fracking," it involves pumping water, sand and chemicals underground to crack rock and release oil and gas.

Colorado is currently just a minor part of the current national push to produce more oil and gas. AP says the state produced 135,000 barrels of oil daily last year -- the highest levels for Colorado producers in at least 30 years but only around 2% of overall U.S. production.

Industry analysts are concerned that images of flooded wellheads in Colorado could put a damper on oil and gas operations in the state -- and especially on fracking, which opponents say can contaminate essential groundwater supplies.

"There's been massive amounts of growth in the last two years, and it's certainly expected to continue," Caitlyn McCrimmon, a senior research associate for ITG Investment Research, told AP. "The only real impediment to growth in this area would be if this gives enough ammunition to environmentalists to rally support for fracking bans, which they had started working on before this."

Some oil from the flood-related spills is expected to quickly evaporate. But Wes Wilson, a former EPA environmental engineer who now advises the antidrilling group Be the Change, believes a lot of contaminants from the spills will end up in the soil.

"We are going to have dozens, if not hundreds, of toxic sites," he told the Denver Post, "and they've got to be cleaned up."

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