[CITE: DNR v. Scope Operating Co., 11 CADDNAR
267 (2008)]
[VOLUME 11, PAGE 267]
Cause #:07-143G
Caption: DNR v. Scope
Operating Company
Administrative Law
Judge: Jensen
Attorneys: Boyko
(DNR); Dodd (Scope)
Date: March 14, 2008
FINAL ORDER
29. Permits numbered 1518, 1638, 1758, 38542, 38543, 38738, 38873, 38885, 38936, 39946 and 49287 issued to Respondent, Scope, are revoked.
30. Respondent, Scope, is ordered to properly plug and abandon each well authorized by permits numbered 1518, 1638, 1758, 38542, 38543, 38738, 38873, 38885, 38936, 39946 and 49287 as well as perform site restoration as required by 312 IAC 16-5-19(c).
31. A statutory lien is foreclosed in favor of the Department on the casing and all equipment located on or removed from each well site authorized by permits numbered 1518, 1638, 1758, 38542, 38543, 38738, 38873, 38885, 38936, 39946 and 49287 as well as on the leasehold of the land upon which each well authorized by permits numbered 1518, 1638, 1758, 38542, 38543, 38738, 38873, 38885, 38936, 39946 and 49287 are located and upon any crude oil stored on the well site(s) or recovered at the time the well is abandoned.
32. If the Natural Resources Commission elects to abandon the well(s), the Commission may enter an order authorizing the agents, employees, or contractors to dispose of the casing and all equipment located on or removed from the well site(s) and any crude oil stored on the well site(s) or recovered at the time the well is abandoned. An inventory of the casing and all equipment and any crude oil shall be made, and the salvage or other reasonable market value of the casing, all equipment and any crude oil shall be applied as a credit to offset the actual costs incurred by the Commission in plugging and abandoning the wells.
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
CASE SUMMARY:
1. The instant proceeding was initiated by the Department of Natural Resources’ (Department) filing of a Complaint for the Issuance of an Order to Revoke Permits (Complaint) on June 27, 2007 wherein it seeks the revocation of eleven (11) oil and gas permits issued to Scope Operating Company (Scope).
[VOLUME 11, PAGE 268]
2. The Department’s bases its Complaint upon the contention that it issued eleven (11) notices of violation on October 19, 2006 with respect to oil and gas wells authorized by the eleven (11) Scope permits at issue herein. The Department further alleges that Scope failed to take advantage of the opportunity afforded it to either abate the violations, seek an extension of time to abate the violations or initiate administrative review pursuant to Indiana Code § 4-21.5-3-6.
3. A prehearing conference was conducted on July 27, 2007 and subsequently a status conference was held on November 19, 2007 with the Department appearing by counsel, Ihor Boyko, and Scope appearing by counsel, Timothy R. Dodd, on each occasion.
4. On November 19, 2007 a schedule for filing and responding to motions for summary judgment was established.
5. The Department timely filed its motion for summary judgment on December 28, 2007, along with evidentiary affidavits and other designated evidentiary material.
6. Scope was provided until January 28, 2008 to file a response to the Department’s motion, but failed to avail itself of the opportunity.
7. Substantively, this proceeding is controlled by Indiana Code §§ 14-37 and 312 IAC 16.
8. The instant proceeding is governed procedurally by the Administrative Orders and Procedures Act, or AOPA, found at Indiana Code §§ 4-21.5-3 et seq. and rules adopted to assist in the implementation of AOPA in proceedings before the Natural Resources Commission (Commission) located at 312 IAC 3.
9. The Commission has jurisdiction of the subject matter and the persons to the instant proceeding.
10. The Commission is the ultimate authority for the instant proceeding. Indiana Code § 14-10-2-3.
SUMMARY JUDGMENT:
11. Summary judgment is anticipated by AOPA at Indiana Code § 4-21.5-3-23.
12. Summary judgment is an appropriate tool used to terminate unnecessary litigation, when a moving party has sufficiently proved the non-existence of a genuine issue of material fact establishing entitlement to judgment as a matter of law. Indiana Department of Environmental Management v. Schnippel Construction, Inc., 778 N.E.2d 407 (Ind.App. 2002), Travelstead v. Vigo Coal Company and DNR, 10 CADDNAR 302 (2006), Reed v. Department of Natural Resources, 9 CADDNAR 65, (2002).
[VOLUME 11, PAGE 269]
13. The administrative law judge is obligated to render a judgment immediately if it is determined that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. I.C. § 4-21.5-3-23 and Indiana Department of Environmental Management v. Schnippel Construction, Inc., 778 N.E.2d 407 (Ind. App. 2002).
14. A genuine issue of material fact exists when facts necessary for the disposition of a proceeding are either in dispute or are not in dispute but are capable of supporting differing inferences on the same issue. Id.
15. A party adverse to a motion for summary judgment “may not rely upon the mere allegations or denials made in the adverse party’s pleading as a response to the motion.” I.C. § 4-21.5-3-23(f). The adverse party is responsible for responding to the motion setting forth specific facts supporting the conclusion that a genuine issue of material fact does, in actuality, exist. Id.
16. While the administrative law judge may not render summary judgment as a matter of course due to the adverse party’s failure to offer opposing evidence, the administrative law judge may render a determination based upon available evidence. I.C. § 4-21.5-3-23(c) and (f).
FINDINGS OF FACT:
17. Evidence available in the instant proceeding is undisputed.
18. Scope was issued oil and gas permits numbered 1518, 1638, 1758, 38542, 38543, 38738, 38873, 38885, 38936, 39946 and 49287 (Scope Permits). Exhibits A-1 through A-11
19. R. Kyle Kingston (Kingston) has served as an Oil and Gas Field Inspector under the employ of the Department since August 5, 2002 and is presently assigned inspection responsibilities within Gibson, Posey and Vanderburgh Counties. Affidavit of R. Kyle Kingston.
20. As an Oil and Gas Field Inspector, Kingston, who is familiar with the legal requirements imposed by virtue of Indiana Code §§ 14-37 and 312 IAC 16, inspected the following identified oil and gas wells associated with the Scope Permits on October 19, 2006:
[VOLUME 11, PAGE 270]
Permit #1518 L.P. Kleiderer Well Number 11A
Permit # 1638 L.P. Kleiderer Well Number 15A
Permit # 1758 L.P. Kleiderer A Unit Well Number 17A
Permit # 38542 L.P. Kleiderer A Unit Well Number 1X
Permit # 38543 L.P. Kleiderer A Unit Well Number 2X
Permit # 38738 L.P. Kleiderer A Unit Well Number 4X
Permit # 38873 L.P. Kleiderer A Unit Well Number 5X
Permit # 38885 L.P. Kleiderer A Unit Well Number 6X
Permit # 38936 L.P. Kleiderer A Unit Well Number 10X
Permit # 39946 L.P. Kleiderer Well Number 19-R
Permit # 49287 L.P. Kleiderer A Unit Well Number 23
Affidavit of Kingston,
Exhibits B-1 through B-11.
21. The oil and gas wells drilled as authorized by the Scope Permits are located in Posey County. Exhibits A-1 through A-11.
22. With respect to each of the Scope Permits, Kingston issued a notice of violation requiring Scope “to operate, plug or abandon, or obtain a temporary abandonment permit” and to take such action by December 19, 2006, or seek an extension of time to take such action. The notices of violation issued by Kingston further provided Scope with required information regarding its ability to seek administrative review of the notices of violation. Affidavit of Kingston, Exhibits B-1 through B-11.
23. Kingston reinspected the oil and gas wells associated with the Scope Permits on December 13, 2007 and discovered that the violations previously identified during the October 19, 2006 inspections remained uncorrected with respect to each and every permit. Affidavit of Kingston.
24. Scope had also, as of December 27, 2007, not applied for temporary abandonment of the wells associated with the Scope Permits and had further failed to seek administrative review of the notices of violation as authorized by Indiana Code § 4-21.5-3-6. Complaint for Issuance of an Order to Revoke Permits, Affidavit of James B. AmRhein.
25. The Department’s designated evidentiary material clearly establishes that Scope is not operating the wells, had not sought temporary abandonment of the wells, had not sought an extension of time within which to plug and abandon the wells, had not sought administrative review of the notices of violations at issue herein, and had not properly plugged and abandoned the wells as required by the issued Notices of Violation.
CONCLUSIONS OF LAW:
[VOLUME 11, PAGE 271]
26. The undisputed evidence presented by the Department herein reveals that the Notices of Violation issued to Scope in conjunction with the Scope Permits were appropriately issued in accordance with Indiana Code §§ 14-37-12.
27. Pursuant to Indiana Code § 14-37-13-1(5), the commission is authorized to revoke the Scope Permits due to Scope’s failure to abate the violations, seek an extension of time to abate the violations or seek administrative review of the notices of violation.
28. Revocation of the Scope Permits as authorized by Indiana Code §§ 14-37-13-1 et seq. is appropriate.