Former Anadarko employees claim safety risks ignored ahead of deadly Firestone explosion

Claims made in investors' federal lawsuit
Posted at 1:54 PM, May 09, 2018
and last updated 2018-05-09 15:55:23-04

DENVER – Several former employees of Anadarko Petroleum Corporation say the company knew of safety risks involving thousands of its oil and gas wells in Colorado, but ignored the risks as it expanded operations here before a leaking pipeline exploded in Firestone, killing two people and injuring two more.

The claims were made in a November amended complaint in a class-action lawsuit filed in the U.S. Southern District Court of Texas, on which Denver7 first reported last year when it was filed.

But in the updated filing, six former employees of Anadarko, including some who worked in Colorado, claim that the company’s Colorado operations were a “ticking time bomb” and that when they told other company brass about concerns, those were brushed aside.

The claims were first reported Tuesday by the Colorado Independent and, subsequently, The Denver Post. Both stories identify two of the former employees – who are not identified in the filings – as Chris Castilian, the company’s former government relations head in Colorado, and Robin Olsen, Anadarko’s former Colorado spokesperson.

The filings claim that after Anadarko acquired 1,500+ wells in a “land swap” of oil and gas properties with another company, Noble Energy, in 2013, it found many of them were not up to state code because of their age and neglect.

But the former employees claim that after initially pledging millions of dollars toward fixing the issues with its newly-owned wells, the company did little to fix the issues, and cut the budget to remediate the wells after an industry downtown in 2014.

“According to [Former Employee 1], Anadarko’s top management, including the Executive Committee, well understood these problems within at most six months after the Land Swap closed,” the suit states. “The problems were a frequent topic of conversation.”

The suit claims that Anadarko executives were “well aware” of safety issues and met “several” times to discuss “whether it was appropriate to ignore safety and focus on supporting drilling.”

The filings also claim Anadarko cut one-third of its Colorado employees in March 2016, and that the reduced staffing levels made it impossible for the company to adequately inspect all of its flow lines. At the same time, according to two former employees, Anadarko upped its number of well-drilling rigs from one to five between August and November 2016, but didn’t hire any new employees.

“In Colorado, Anadarko complied with the law when violations were easy to detect and officials made efforts to investigate violations,” the lawsuit states. “But Anadarko ignored laws – even safety laws – that were not regularly enforced.”

One of the former employees said that one person was responsible for doing safety checks on all of the company’s flow lines in Weld County – a job that should have been performed by between 12 and 20 people, according to the former employee.

According to the lawsuit, the former employee identified as Olsen by the Independent and the Post brought concerns to upper management about a “lack of skilled staff” brought up by management following a January 2017 oil spill in Weld County and how she was being directed to discuss the spill publicly.

The suit says that one of the executives explicitly said not to bring up that point during a meeting with the Colorado Oil and Gas Conservation Commission.

And when the employee identified as Olsen again brought up her concerns, the suit says she was told to “keep quiet” because her job “was to shovel s—t, and to clean up the messes that [Anadarko’s employees] make.”

Jennifer Brice, the manager of corporate communications for Anadarko, told Denver7 in a statement the company doesn’t comment on pending litigation.

“Although we do not comment on specific allegations in pending litigation, the company looks forward to the opportunity to substantively respond through the judicial process when appropriate,” Brice said.

The company did file opposition to the filing in question, which can be read here.

But according to the suit filings, Anadarko’s Colorado-based executives and other staffers met “specifically to discuss how prioritizing remediation funds on supporting drilling as opposed to addressing environment, safety, and health hazards might lead to disasters.”

It also says that when considering well remediation, Anadarko would look primarily at wells that emitted high amounts of methane because the state’s Department of Health and Environment was doing field scans with infrared cameras to fine companies emitting improper amounts of the gas.

Yet when the company turned on its Firestone well in January 2017, the company noticed that the well was not emitting methane as it should have been, according to the court filings.

In early April 2017, two crews inspected the well, according to the suit and a former employee.

“They could not explain how the well was not emitting methane. Yet Anadarko did nothing to shut off the well,” the court documents say.

And the suit further states that no one checked the well’s flow lines after it was turned on to be sure they weren’t leaking – but that wasn’t the issue.

“It wouldn’t have helped,” the suit states. “Anadarko was unaware of the existence of the line that was leaking.”

On April 17, a build-up of methane gas in a Firestone home’s basement exploded while the homeowner, Mark Martinez, and his brother-in-law, Joseph Irwin, were installing a water heater. Both were killed the explosion, Martinez’s wife suffered severe burns, and their son was hospitalized after jumping out of the window.

The fallout from the explosion and the public statements that followed caused the company’s stock prices to drop, leading to the initial suit, which claimed the company defrauded its investors because it misled them about risks involved with the wells.

The class-action suit is led by the Philadelphia Ironworkers’ Benefit and Pension Fund and seeks damages for losses suffered by investors.

The Firestone explosion and another explosion weeks later at another Anadarko-owned site led to a statewide review of oil and gas lines, big changes to operator and review rules, and further intensified the debate surrounding oil and gas development along Colorado’s Front Range.

The next hearing in the lawsuit is set for June in Houston, according to court records.