Gas producer Cook Inlet agrees to pay state more than $200,000 for water pollution violations

A small Cook Inlet oil and gas producer has agreed to pay the state of Alaska nearly $203,000 after the state’s environmental agency accused it of violating water pollution limits in the bay over an extended period of time.

Furie Operating Alaska is responsible for hundreds of Water pollution violations between the end of 2020 and February of this year, according to a 46-page agreement.

The agreement was signed in May by Mark Slaughter, Furie’s Chief Commercial Officer, along with Gene McCabe of the Division of Water in the Alaska Department of Environmental Conservation and Cameron Jimmo of the Alaska Department of Law.

The violations occurred on Furie’s offshore production platform in Cook Inlet, the agreement states. The platform is called Julius R and is located in the Kitchen Lights Unit.

Pollution discharged into Cook Inlet after water treatment exceeded allowable limits under an Alaska discharge permit designed to protect water quality, the state claimed in the agreement.

Furie violated allowable wastewater limits for domestic wastewater, the agreement states. Domestic wastewater can refer to gray water, which can come from a kitchen, or black water, which can come from the wastewater from a bathroom. These violations occurred from December 2020 to February of this year, the agreement states.

Furie also violated allowable discharge limits for “produced water,” a byproduct of oil and gas production after it also went through a treatment process. These violations occurred from June 2021 to January of this year, the agreement states.

Hundreds of the violations involved the release of copper from produced water, the agreement says.

The metal is a toxic pollutant and can affect the survival, growth and reproduction of marine species, Holly Hansmeier, an environmental program specialist with the Alaska Department of Environmental Conservation, said in an email.

She said the “highest exceedances of effluent limits” for produced water occurred in March 2022. At that time, releases exceeded the average monthly limit for copper by 9,707%, she said.

Many other violations of produced water regulations involved emissions of oil and grease. Produced water exceeded the daily maximum for oil and grease by 662% in March 2022, she said.

Many of the violations that occurred fell into the U.S. Environmental Protection Agency’s category of “significant noncompliance,” Hansmeier said.

Furie is owned by John Hendrix, a former oil and gas executive and adviser to former Governor Bill Walker.

In a text published on Friday, Hendrix said Furie had “proven with mathematical precision that there is not even the slightest danger of harm to the environment from our discharges.”

He said that “despite the use of the best available technology and best management practices,” the strict wastewater limits were sometimes exceeded.

“For example, ice floes hitting our offshore monopod (a platform) can cause turbulence in our domestic wastewater system sufficient to cause small amounts of wastewater to pass prematurely through the secondary treatment chamber,” he said.

“(Alaska Conservation Agency) oversight of our operations is subject to strict federal regulations, and liability for violations is strict, regardless of fault,” he said.

“Ultimately, the benefit of consent negotiations is to identify improvements that can be made to reduce or avoid exceedances,” he said. “In our case, for example, an additional filter was installed behind the secondary clarifier.”

Furie also failed at times to conduct required monitoring and testing for contaminants or to submit required documentation, the agreement states.

“Lack of monitoring was not the reason for the exceedances of wastewater limits,” Hansmeier said by email. “Exceedances generally occurred due to improper operation of the treatment plants or the inability of the treatment plants to treat the contaminant load.”

Furie was purchased from Hex Cook Inlet in July 2020 as part of a Chapter 11 bankruptcy proceeding, the agreement states.

Hendrix owns Hex Cook Inlet.

Furie supplies about 5% of the natural gas used to generate heat and electricity in south-central Alaska, or about 4 billion cubic feet. The company is the second-largest gas producer in Cook Inlet after Hilcorp.

The state’s actions follow a notice of violation sent to Hendrix in early 2023 that outlined many of the allegations, the agreement states. The notice came after the Department of Environmental Conservation conducted a routine inspection of the Julius R platform in May 2022.

Hansmeier said Friday that Furie was meeting the goal of the agreement, which was to bring the company back into compliance with its authorization as quickly as possible.

“So far, Furie is implementing the corrective actions (of the agreement) on time and communicating with DEC,” Hansmeier said.

Hendrix said in the text on Friday: “The entire wastewater program is based on self-reporting. Furie employs experienced environmental experts who monitor, record and report our wastewater discharges, both those that meet strict limits and those that exceed them. An open and transparent effort is made to achieve the most environmentally friendly operation. Penalties for exceedances are mathematically calculated using government-established tables.”

correction: The headline of an earlier version of this story incorrectly stated that Furie had agreed to pay a $200,000 fine to the state. The payment is not a fine.

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