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Backup Documents 07/08/2014 Item #12A COLLIER 1 2 A P RESOURCES COMPANY July 7,2014 The Board of County Commissioners Attn: Chairman Tom Henning 3299 Tamiami Trail East Suite 303 Naples, FL 34112 Dear Chairman Henning: In recent months, Collier Resources Company (CRC) has closely followed the public debate regarding the activities of the Dan A. Hughes Company of Texas (Hughes), which is one of our lessees, not a contractor as some have reported. The public debate was initially focused on Hughes's plans to drill an exploratory well in a farm field adjacent to eastern Golden Gate Estates. More recently, much attention has been paid to a well that was completed by Hughes in an area south of Lake Trafford. DEP has publicly stated that Hughes was "caught" using a new and unapproved exploration method when it completed this well. It is our understanding that Hughes has denied any wrongdoing, and that it asserts that it has not broken any laws. It is important to note that neither the cease and desist order or the consent order issued by DEP have asserted any illegal activity. Regardless, during the months following DEP's initial announcement, we have been highly concerned by a flurry of inaccurate and misleading media reports regarding a business that CRC has operated without any issues whatsoever since World War II. The resulting public confusion has created an environment where a number of groups, well intentioned or otherwise, have made unsubstantiated and inaccurate claims about unplugged oil wells, oil drilling in the Everglades, threats to the Florida panther and,most recently, the safety of our drinking water. When we learned of these allegations — particularly as it relates to clean drinking water -- we were the first to raise our hands and volunteer to immediately undertake water quality testing and groundwater modeling in the area adjacent to the Hughes well. We agreed to pay for the testing, and we also agreed to utilize an independent subject matter expert that has been vetted and approved by Collier County staff. We would expect the subject matter expert to evaluate all reasonable recommendations, including recommendations from The Conservancy of Southwest Florida, regarding the nature and scope of any necessary testing. We only insist that the testing is to be based on sound science, and that it is guided by modeling and is independently verifiable. We wholeheartedly endorse DEP's decision to begin its own testing on June 24, 2014, and we look forward to learning of the results as they become available. 2600 Golden Gate Pkwy, Suite 112 ❖ Naples,FL 34105 ❖ Tel: (239)262-0900 Fax: (239)262-7378 c},2 iit(t4 COLLIER 1 2 A RESOURCES COMPANY In general, it seems that much of the recent controversy stems from the fact that in its first (and only) exploratory well, Hughes apparently used a well completion method that is new to Florida. Although this method is very common in other parts of the country, it is a method that DEP has requested additional time to study. At the June 24, 2014 meeting of the Collier County Board of Commissioners, Commissioner Hiller requested that CRC meet with Hughes and seek agreement that this method would no longer be used until such time as DEP has done whatever it needs to do to determine whether it is an acceptable method or not. CRC agrees with this request, and Hughes has agreed as well. Additionally, until such time as DEP has issued clear regulations regarding these new well completion methods, CRC will make sure that any future leases with third party exploration companies are limited to oil exploration using a"conventional" approach that has been well accepted and understood in Florida since 1943. CRC is a dedicated community partner that has been involved in oil exploration and development in Collier County, Florida for decades. We trace our roots to the founder of Collier County. This is our home—it is where we live and work and raise our children—and we take the issue of clean water and public safety very seriously. Sincerely, ce, Tom Jones, Sr. Vice President Cc: Commissioner Fred W. Coyle Commissioner Donna Fiala Commissioner Georgia Hiller, Esq. Commissioner Tim Nance County Manager Leo Ochs,Jr. 2600 Golden Gate Pkwy, Suite 112 ❖ Naples,FL 34105 ❖ Tel: (239)262-0900 Fax: (239)262-7378 Patricia L. Morgan 12A From: Durham, Tim Sent: Tuesday,July 08, 2014 9:43 AM To: Patricia L. Morgan Subject: FW: FDEP docs for Item 12.A Attachments: FDEP.pdf From: BigelowCatherine Sent: Tuesday, July 08, 2014 9:02 AM To: DurhamTim Subject: FDEP docs FDEP docs Catherine "Cat" Bigelow Operations Supervisor Communications&Customer Relations Board of Collier County Commissioners (239) 252-8586 or(239) 252-8383 msg (239-252-3985 FAX xs_ d :set spin., ad��:E,...;,.;... .is.t.,ip_.e-C�e, .:f-,,,a.t..,).:s � _ <�'.... .,.,.s<<..,.03..,�;:x,,u ..,.,j_ a ��EcLUC's�I .�.�v„, �� tot,,end ..otr(A this,) 3e. ,,toiepi a:_c 1 12A RICK FLORIDA DEPARTMENT OF GOO OTT GOVERNOR 4 Tr. ENVIRONMENTAL PROTECTION �� E � CARLOS LOPCsZ-CAN'['ERA , LT.GOVERNOR MAIUORY STONEMAN DOUGLAS BUILDING 3900 COMMONWEALTH BOULEVARD TALLAHASSEE,FLORIDA 32399-3000 HERSCHEL T.VINYARD JR. SECRETARY June 19,2014 The Honorable Tom Henning Chairman Collier County Board of County Commissioners 3301 Tamiami Trail East Naples,Florida 34112-4961 Dear Chairman Henning: I appreciate you taking the time to meet with me on Monday. As I conveyed to you personally,the protection of the incredible environmental resources in Collier County is a priority for the Florida Department of Environmental Protection(DEP). We remain committed to working with you and the entire county commission to protect groundwater resources for the families of Collier County. To demonstrate our commitment,DEP has already taken three significant actions. We announced on Friday our decision to offer DEP staff and resources to support Barron Collier's efforts to conduct groundwater testing. DEP also decided to independently conduct more groundwater testing near the site of the Collier-Hogan Well and additional locations,and we are currently seeking the permission of Collier Resources and Dan A. Hughes Companies to access the properties. Finally,DEP announced yesterday that we are requiring the Dan A.Hughes and Collier Resources Companies to hold at least three public meetings to discuss and take public comment on plans for the Collier-Hogan site, and plans for all other current and future energy operations in Collier County. In addition,we acknowledge the County's legitimate concerns and would like to partner with you to ensure all of your requests are fulfilled. In your recently filed Petition,you asked for the following eight items(beginning at page 12 of the Petition): a.Amend paragraph 11 of the Consent Order to provide". . .the Company shall provide to the Department and Collier County the information in paragraphs 12- 14 below." b.Amend paragraph 15 of the Consent Order to provide" ...The ISPC Plan shall be submitted to the Department and Collier County within fourteen(14)days of the effective date of this Consent Order. . . " c. Amend paragraph 16 of the Consent Order to provide that Collier County will be given the requested information and analysis,and that DEP, in consultation www.dep.statejl.us 12A The Honorable Tom Henning June 19,2014 Page Two with Collier County,directly retain the requested independent third-party experts at the Hughes Company's sole cost and expense to do the work described therein. d.Amend paragraph 17 of the Consent Order to include Collier County as a recipient and meaningful reviewer of the Report. e.Amend paragraph 18 of the Consent Order that gives(sic)Collier County 30 days after receipt of the Report to consult with DEP prior to DEP providing written notice to the Hughes Company that it has satisfied the Report requirements. f. Amend paragraph 19 to include Collier County as a recipient of the Plan and require that the Plan be reviewed by independent third party experts retained by DEP in consultation with Collier County,to be paid by the Hughes Company. g. Include a new provision in the Consent Order that requires the Hughes Company to immediately notify Collier County or its designee of any accident or incident occurring at the well site. h.Include a new provision in the Consent Order that requires the Hughes Company to post a one million dollar bond for potential clean-up costs at the well site. Under our authority,DEP is able to address the County's requests referenced above through an agreement between DEP and the County. The one exception is the need for the Hughes Company to provide the million dollar bond. To achieve this goal,I have included a draft letter to Hughes requesting they post a bond or provide other financial assurance,which would allay all concerns about any future incidents.I am asking the Commission to join DEP by signing our letter,for settlement purposes,calling on Hughes to fulfill this important need. DEP will work with the County to pursue every means possible to hold responsible parties accountable and to protect the people and environment of Collier County. Again,I stand by my commitments to vigilantly protect the groundwater resources in Collier County. I look forward to continuing to work together as partners in environmental protection. I am available to speak with you at your convenience. Sincerely, —lly..4.041 Herschel T. Vinyard Jr. Secretary www.dep.state. 1.us 12A SOMON RICK SCOTT FLORIDA DEPARTMENT OF GOVERNOR .f a 117,„_ ENVIRONMENTAL PROTECTION CARLOS LOPEZ-CANTERA LT.GOVERNOR ;' t MARJORY S I ONEMAN DOUGLAS BUILDING 3900 COMMONWEALTH BOULEVARD TALLAHASSEE,FLORIDA 32399-3000 HERSCHEL T.VINYARD JR. SECRETARY July 3,2014 Ms. Kristin Kramers Dan A. Hughes Company 208 E. Houston Street Beeville,Texas 78102 Dear Ms. Kramers: As you know,the Department of Environmental Protection(Department),members of the Collier County Commission and families in Collier County have had numerous unanswered concerns about your activities at the Collier-Hogan well. The activities that took place on land owned by Barron Collier Partnership has left families at unease. These matters must be remedied. As companies across Florida have treated Florida's natural treasures with respect, your enterprise is the only one that engaged in an unauthorized acid treatment at the Collier- Hogan well. Indeed,the results of your actions have created unease among families across the county. Our number one priority at DEP is ensuring families are safe and that our environment is protected. We are concerned that your goals may be inconsistent with ours. For some time we have worked with you to operate transparently by asking you to share information and meet with families in Collier County; however, Dan A. Hughes has moved slowly on these requests and your inaction is unacceptable. Because of these issues.the Department has the obligation to consider the company's non-compliant actions that led to the Consent Order. The use of unauthorized acid treatment and Hughes' violation of the Department's Cease and Desist Order on December 31, 2013, highlights the concerns of the Department regarding your course of conduct while operating in Florida. Additionally, with respect to the Collier-Hogan well, you must complete the following demands by July 15, 2014: 1. Publish dates and times that Dan A. Hughes will hold three public meetings to discuss and take public comment on your plans for the Collier-Hogan site and future operations in Collier County. 2. Confirm whether Hughes took samples of the flowback material that was trucked off the Collier-Hogan site prior to June 23, 2014, when DEP arrived to inspect the .dep.state II.us 12 Ms. Kristin Kramer Page 2 July 3,2014 3. site. If samples exist. immediately provide those samples to DEP. If Hughes did not take samples of the flowback material,prior to trucking off-site, provide an explanation as to why and who, specifically at Dan A. Hughes,made the decision not to sample these materials and why DEP was not notified of this action. 4. Publicly announce media and public access to your operations to ensure that the previous violations are not ongoing. 5. Publicly commit to testify before the County Commission's July 8 meeting to discuss your current practices and long term plans. 6. Provide an explanation of the agreement between Dan A. Hughes and the facility that agreed to accept the flowback material to provide full assurance that this material is being disposed of appropriately to safeguard the public. Also include a copy of the renewed pretreatment permit issued by Miami-Dade County, as the current permit you provided to DEP expired on May 31, 2014. 7. Provide the revisions of the groundwater monitoring plan as required by DEP to address the deficiencies previously identified by the Department. This would include a prompt schedule of when Dan A. Hughes will be conducting on-site testing. 8. Provide the names and qualifications of the individuals at Dan A. Hughes who are responsible for implementing the requirements of this Consent Order and ensuring compliance on-site. We are aware that you have released the environmental compliance consultant and project engineer who were working with DEP on the implementation of the Consent Order. and we ask that you provide an explanation for the release of these individuals. It is important that we have the information necessary to determine the expertise of those employed by Dan A. Hughes to protect the public. 9. Provide the name of your recommended independent third-party expert that will conduct the study under the Consent Order. The Consent Order required Dan A. Hughes to provide a third-party expert acceptable to DEP and a scope of work within 60 days,which was June 7,2014. The independent third-party expert you initially proposed was rejected by DEP because, as a prior contractor for Dan A. Hughes,that company(Stantec)had a clear conflict of interest. The independence of the third-party expert is critical to ensure unbiased information. 10. The Company must provide every 10 days a status report as to the utilization of its Spill Prevention and Cleanup Plan to ensure that proper safety mechanisms are in place. Aerial photographs and on the ground assessments have exposed oil sheen on the ground that are allegedly the result of Hughes' techniques of spraying oil into truck tanks. It is important to know whether or not this activity is part of the Spill Prevention and Cleanup Plan. iti tY lt'.dep state/I u 12A Ms. Kristin Kramers Page Three July 3, 2014 These actions are not negotiable and require your immediate response. Should you refuse, delay or not properly follow through on any of these demands. DEP will take any and all regulatory and enforcement action available to it regarding Dan A. Hughes. This letter offers a tremendous opportunity for your company to begin rebuilding the trust that your past actions have damaged, and I look forward to your immediate response. Sincerely, 11,441.2777-74 ), Herschel T. Vinyard Jr. Secretary cc: Collier County Collier County Water-Sewer District Thomas G. Mosher Matthew Schwartz Preserve Our Paradise Conservancy of Southwest Florida „ de-h..tcrte:fl.rrs 12A 1M FLORIDA DEPARTMENT OF RICK SCOI�I GOVERNOR ENVIRONMENTAL PROTECTION CARLOS LOPEZ-CANTERA MARJORY STONEMAN DOUGLAS BUILDING LT.GOVERNOR 3900 COMMONWEALTH BOULEVARD TALLAHASSEE,FLORIDA 32399-3000 HERSCHEL T.VINYARD JR. SECRETARY July 4,2014 Mr. Tom Jones Senior Vice President Collier Resources 2600 Golden Gate Parkway Naples, Florida 34105-3227 Dear Mr. Jones: On Thursday, the Department of Environmental Protection(Department)notified the contractor currently operating on your property, Dan A. Hughes,that they must comply with a number of demands to increase the transparency of their operations.ensure compliance with state environmental rules and regulations,and address a number of areas in which the company may be deficient. As Dan A. Hughes is your contractor, this letter serves as notice that we expect that you shall ensure that company's compliance with the Department's demands. Ultimately, you stand to benefit financially from Dan A. Hughes' operations. It is your responsibility to ensure that activities by your contractor on your properties do not adversely impact the families of Collier County or the environment. As we have called on Dan A. Hughes to fulfill their obligations to families, we expect that you hold your contractor accountable and require the company to fulfill these obligations before the July 15 deadline. Sincerely. Herschel T. Vinyard Jr. Secretary cc: Collier County Collier County Water-Sewer District Thomas G. Mosher Matthew Schwartz Preserve Our Paradise Conservancy of Southwest Florida x tii iti.dep.state.11.us 12A, „my, RICK SCOTT FLORIDA DEPARTMENT OF GOVERNOR NT ENVIRONMENTAL PROTECTION CARLOS LOPFZ-CANTERA Yr MARJORY S I ONEMAN DOUGLAS Bt:11.DING I.T GOVERNOR 3900 COMMONWEALTH BOULEVARD I"ALLAHASSEE.FLORIDA 32399-3000 HERSCHEL T.VINYARD JR. SECRETARY July 5,2014 Mr. Blake Gable Barron Collier Companies 2600 Golden Gate Parkway Naples, Florida 34105 Mr. Tom Flood Collier Enterprises 2550 Goodlette Road North, Suite 100 Naples, Florida 34103 Dear Mr.Gable and Mr. Flood: As you know,the actions of Dan A. Hughes has left families in Collier County at unease,and we notified the Company that they must fulfill a list of demands by the Department of Environmental Protection's(Department) July 15 deadline. As part of ensuring we do everything possible to protect families' groundwater from activities at the Collier- Hogan site,the Department went above and beyond to begin its own water testing on June 24,2014. To date,the tests that were administered by the Department and two private labs have indicated that groundwater has not been impacted. However,public trust has been damaged by Dan A. Hughes' previous actions. As you stand to benefit financially from the Company's activities on your property,we instruct you to work with both Collier County and the Conservancy of Southwest Florida to develop long-term groundwater monitoring strategies, based on sound science,that ensure the safety of current and future operations. Furthermore,we instruct you to exclusively fund the implementation of these strategies. We look forward to seeing your plan. 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