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

A small Cook Inlet oil and gas producer has agreed to pay the state of Alaska nearly $203,000 following allegations by state environmental regulators that it violated water pollution discharge limits in the inlet over an extensive period.

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

The agreement was signed in May by Furie’s chief commercial officer, Mark Slaughter, as well as Gene McCabe, with the Division of Water in the Alaska Department of Environmental Conservation, and Cameron Jimmo, with the Alaska Department of Law.

The violations took place at Furie’s offshore production platform in Cook Inlet, the agreement says. The platform is known as Julius R and is located in the Kitchen Lights Unit.

The pollution released into Cook Inlet after the water was treated exceeded allowable limits under an Alaska discharge permit meant to protect water quality, the state alleged in the agreement.

Furie violated effluent limits allowed in domestic wastewater releases, the agreement alleges. Domestic wastewater can refer to gray water that might come from a kitchen or black water that might come from bathroom sewage. Those violations occurred from December 2020 to February of this year, the agreement says.

Furie also also violated effluent limits allowed for “produced water,” a byproduct of oil and gas production, after it had also gone through a treatment process. Those violations occurred from June 2021 to January of this year, the agreement says.

Hundreds of the violations involved releases 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, said Holly Hansmeier, an environmental program specialist with the Alaska Department of Environmental Conservation, in an email.

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

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

Many of the violations that occurred fell into the “Significant Non-Compliance” category established by the Environmental Protection Agency, Hansmeier said.

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

Hendrix said in a text on Friday that Furie has “demonstrated with mathematical precision that with our discharges there was not even a threat of harm to the environment.”

He said, “that despite implementation of best available technology and best management practices,” the strict effluent discharge limits are sometimes exceeded.”

“For instance, ice flows striking our offshore monopod (platform) can create turbulence in our domestic wastewater system sufficient to prematurely move small quantities of wastewater through the secondary treatment chamber,” he said.

“Oversight of our operation by (the Alaska conservation department) is tightly guided by federal strictures and liability for exceedances is strict, without regard to fault,” he said.

“Ultimately, the benefit of the consent negotiations is to identify upgrades that can be made to reduce or eliminate exceedances,” he said. “For instance, in our case an additional filter has been installed downstream of the secondary treatment chamber.”

Furie also failed at times to conduct the proper monitoring and testing for pollutants, as well as submit required paperwork, according to the agreement.

“The lack of monitoring was not the reason for the effluent limit exceedances,” Hansmeier said by email. “Exceedances generally occurred due to improper operation of treatment systems or the treatment systems’ inability to treat the load of pollutants.”

Furie was purchased by Hex Cook Inlet through a Chapter 11 bankruptcy process in July 2020, the agreement says.

Hendrix owns Hex Cook Inlet.

Furie supplies about 5% of the natural gas used in Southcentral Alaska to make heat and power, or about 4 billion cubic feet. It’s the second largest gas producer in Cook Inlet behind Hilcorp.

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

Hansmeier said on Friday that Furie is meeting the goal of the agreement, which is to bring the company back into compliance with their permit as soon as possible.

“Thus far, Furie is completing (the agreement’s) corrective actions timely and communicating with DEC,” Hansmeier said.

Hendrix said in the text on Friday: “The entire discharge program pivots on self-reporting. Furie retains experienced environmental professionals who monitored, recorded and reported our discharges, both those that complied and those that exceeded strict limits. There is open and transparent pursuance of the most environmentally sound operation practicable. Sanctions for exceedances are mathematically calculated pursuant to federally established tables.”

Correction: The headline of an earlier version of this story incorrectly said Furie had agreed to pay $200,000 in fines to the state. The payment is not a fine.