After two deadly explosions, Colorado’s largest gas producer faces lawsuits

State’s pro-industry governor orders review of all pipelines located near occupied dwellings.

Workers dismantle the charred remains of a house destroyed by an Anadarko Petroleum natural gas line leak that caused an explosion that killed two people inside the house in Firestone, Colorado. CREDIT: AP Photo/Brennan Linsley
Workers dismantle the charred remains of a house destroyed by an Anadarko Petroleum natural gas line leak that caused an explosion that killed two people inside the house in Firestone, Colorado. CREDIT: AP Photo/Brennan Linsley

Anadarko Petroleum, the largest oil and gas producer in Colorado, is coming under pressure from the public and investors to provide explanations for two deadly explosions over the past couple months.

In April, leaking methane from a natural gas pipeline owned by Anadarko reportedly caused a house to explode in Firestone, Colorado, killing two residents and injuring a third. Last week, a storage tank exploded at a Mead, Colorado facility owned and operated by Anadarko, killing one worker and injuring three others.

Both Firestone and Mead are located in Weld County, Colorado, the state’s top natural gas-producing county.

Anadarko and its top executives are facing multiple proposed class action lawsuits over allegations that the company made “materially false statements” before the explosion that destroyed the house. An investor filed a lawsuit in U.S. District Court for the Southern District of Texas earlier this month, claiming Anadarko defrauded investors by misrepresenting the company’s “business, operational and compliance policies.”

Since the deadly explosion at the house in Firestone, Anadarko’s stock price has dropped approximately 16 percent, from $61.21 per share to $51.23 per share at midday on Tuesday.

After local and state officials announced in early May that Anadarko’s operations were responsible for the Firestone explosion, Colorado Gov. John Hickenlooper (D) ordered a statewide review of all oil and gas lines in the state that lie within 1,000 feet of an occupied building.

Last week, the Colorado Oil and Gas Conservation Commission, an agency that regulates the state’s oil and gas industry, reportedly told residents of the Firestone subdivision where the April explosion occurred that a second underground leak had been found. The subdivision sits on the edge of a natural gas field developed in the 1980s and 1990s.

Oil and gas drilling operations across the nation are increasingly occurring closer to homes and schools. At the request of the homeowners association in Firestone, Anadarko reportedly is providing funding for the purchase of home natural gas detection devices. The gas that seeped into the home in the neighborhood that killed two people was unprocessed, without the additive mercaptan, which provides a rotten egg smell to otherwise odorless natural gas.

“Sadly, last month in Firestone, a fatal house explosion killed two men by an explosion caused by a flow-line seeping methane into the basement of the home that ignited,” Shane Davis, a prominent anti-fracking activist in Colorado, wrote in a blog post last week. “This tragedy could have been prevented, and all future catastrophes can be prevented if the state acts in a manner consistent with public health, safety and environment with regards to oil and gas development.”

Davis, in a letter sent earlier this month to Boulder County, Colorado, officials, reminded them that he had issued many warnings about the occurrence of an incident similar to the one in Firestone. “There is no doubt a catastrophic tragedy will happen if Boulder County does not act immediately to pass local laws that protect the ‘civil rights to safety’ of Boulder County citizens and that of the environment and not favor the oil and gas industry,” he wrote.

Hickenlooper, who is a strong supporter of the state’s oil and gas industry, also is considering whether to support legislation that would require oil and gas companies to release maps telling homeowners how close they live to oil and gas lines.

Anadarko opposes the legislation. The company’s spokesman told the International Business Times, “We believe any legislative or regulatory action around this issue will be most effective when we have all the information from the investigation and the state regulatory authority’s Notice to Operators, and with input from home builders, commercial developers, industry, regulators, the environmental community, local officials and others.”

The line that caused the deadly explosion in Firestone was considered inactive, according to a report in The Colorado Independent.

In a statement issued earlier this month, the Colorado Oil and Gas Association, the state’s primarily lobbying group for the industry, said it supports the state’s call to inspect flowlines. “In the weeks and months that follow, we will endeavor to enhance flowline and pipeline procedures and remain committed to improving Colorado oil and gas production,” the association said.

The lawsuit brought by the Anadarko investor stated that the company’s maintenance and safety protocols for certain of its vertical wells were inadequate. Due to those “shortcomings,” the wells were at an “increased risk” of explosion. “As a result of the foregoing, Anadarko’s public statements were materially false and misleading at all relevant times,” the proposed lawsuit said.

In response to the incident in Firestone, Anadarko said in a statement that it has begun the process of inspecting all wells, with priority being placed on wells and infrastructure that are in closer proximity to homes and communities.

On May 15, residents in Firestone who live next door to the house that exploded filed a nuisance lawsuit against the company and another oil and gas producer, Noble Energy, in Weld County (CO) District Court, DeSmogBlog reported. Noble Energy was included in the lawsuit because it was a prior owner of the natural gas wells in the neighborhood that connected to the Anadarko pipeline.

The plaintiffs stated the pipeline “associated with the explosion site was reported by the initial investigators to not have been capped, purged or properly abandoned pursuant to industry standards.”