More than 1,000 alleged violations lead to record $12.5 million fine for oil firm Greka

By Karen Kidd | Apr 21, 2018

A state law approved by the governor in 2016 lead to a record-breaking $12.5 million fine levied against Greka Oil & Gas earlier this month following more than 1,000 alleged safety violations at an Orange County oil field.

SACRAMENTO - A state law approved by the governor in 2016 led to a record-breaking $12.5 million fine levied against Greka Oil & Gas earlier this month following more than 1,000 alleged safety violations at an Orange County oil field.

"Clearly, the Greka situation was extraordinary given the scope of potential harm of its violations," Don Drysdale, Department of Conservation spokesman for the Division of Oil, Gas and Geothermal Resources, said. "Our goal is to protect health, safety and the environment through prudent, science-based regulation."

On April 11, the state Department of Conservation announced Greka Oil & Gas had been fined "for major safety violations related to its operation of the Richfield oil field in Orange County." In its order filed against Greka, the department documented 1,466 alleged violations that included false reporting, and failing to comply with testing and operational requirements last year.

Greka also was ordered to stop injecting water into its field northeast of Anaheim until it came into compliance and obtained a $39 million bond "to guarantee that cleanup costs are not passed to taxpayers if the company folds," according to a statement from the department.


California Gov. Jerry Brown  

The fine against Greka was 50 times greater than the previous record of $257,000 assessed against Bennett Petroleum in 2015.

"Companies doing business in California must follow the rules, and if they don't, we're going to take proactive steps to stop potential disasters before they happen," Department Supervisor Ken Harris said. "The magnitude of this penalty reflects the company's violations and poor practices, and the potential harm it could cause to surrounding communities, the environment, and groundwater."

The penalty assessed against Greka stems from provisions in a 2016 state law, Assembly Bill 2756, approved by Gov. Edmund G. "Jerry" Brown in September of that year, which enlarged the department's enforcement powers. "The new penalty structure allows DOGGR to assess penalties in line with the harm caused and allows each day to be treated as a separate violation if the issue is not repaired," Drysdale said.

Greka has not yet paid the fine, Drysdale said. 

"Greka has challenged the fine and such a challenge will likely take place, first, in an administrative hearing where an administrative law judge from the Office of Administrative Hearings will hear the matter," he said.

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