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Colorado increases fines for oil and gas violations

DENVER — The Colorado Oil and Gas Conservation Commission on Monday increased the maximum fine that oil and gas companies could face for violating state rules to $15,000 from $1,000.

The fine is the highest allowed by a law the Legislature passed last year that increases the possible penalties, The Denver Post reported.

“If the Legislature said $15,000, it may not be appropriate to reduce that number,” Commissioner John Benton said.

The commission also eliminated an overall cap of $10,000 in fines for each violation but reduced the maximum daily fines for the least serious violations, such as late paperwork, to $200, from $500.

The Colorado Oil and Gas Association, an industry group, has said it supports the higher fines but expressed some concerns about how they would be applied. A spokesman for the group didn’t immediately return a call from the Associated Press on Monday.

Pete Maysmith, executive director of Conservation Colorado, welcomed the higher fines.

“It is important to hold the oil and gas industry accountable for significant violations, not only to act as a deterrent but to protect the health and safety of Coloradans and our environment,” he said in a written statement.

Some environmental groups had expressed concern that the director of the oil and gas commission could settle an alleged violation without imposing any penalties.

Commissioners limited the director’s discretion to waive all penalties in the most serious cases. They also tightened language to protect the right of the public to go to the commission if they disagree with the director’s ruling.

Commissioner DeAnn Craig said higher penalties could prompt small operators to abandon wells, making the state responsible for maintaining them.

Commission member Mike King, who is director of the state Department of Natural Resources, said well abandonment is a separate issue from the penalties.

“There is no history of fines causing operators to get up and walk away,” he said.

King said regulators plan to document more precisely what happens to wells as they reach the end of production.

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Information from: The Denver Post, http://www.denverpost.com


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