The Colorado Oil and Gas Conservation Commission (COGCC) on Tuesday delayed implementing until at least January larger fines for operators that violate drilling rules.
The commission is set to take up the measure again on Jan. 7.
Some of the state’s operators had warned COGCC that imposing fines of up to $15,000/day could harm exploration and production (E&P) and rollback job creation in the state. Operators have requested that E&Ps that voluntarily report violations not be fined.
The current $1,000/day penalty structure, which has a $10,000 cap, was implemented in 1955.
The COGCC has reviewed numerous draft rule changes since September, a spokesperson said Wednesday. "The commission hasn't voted, so nothing has changed at this time."
In May 2013, Gov. John Hickenlooper issued executive order D 2013-004 that directed the COGCC to review its enforcement program, and penalty structure (see Daily GPI, May 10, 2013). The commission submitted its review a year ago.
In June, the state legislature passed HB14-1356) to amend the Colorado Oil and Gas Conservation Act, which strengthened COGCC’s penalty authority. The rulemaking is part of that review to implement the legislation.
The COGCC said earlier this month the primary purpose for its pending action was to implement “significant rule and policy changes to the regulatory oversight of oil and gas operations. The necessity for these changes has been demonstrated by formal action by the executive and legislative branches of Colorado’s government.”
While COGCC staff proposed giving the commissioners discretion to waive penalties for minor or moderate offenses, Director Matt Lepore has urged the commissioners to not go too far to accommodate the industry's concerns.