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Colorado Goes After Chemical Disclosure Violators

In the first test of new statewide oil and natural gas drilling chemical disclosure rules established last year, the Colorado Oil/Gas Conservation Commission (COGCC) will flex its regulatory muscles soon in pending enforcement activity (Rule 205A) involving 11 operators.

Colorado set new rules on hydraulic fracturing (fracking) in late 2011 with the governor and other top state officials calling them a model for other states (see Shale Daily, Dec. 14, 2011).

The cases will be looked at separately during COGCC's Oct. 28 meeting in Denver. So far, seven of the cases have reached settlements that will be reviewed for approval by the nine-member panel of industry, environmental, state/local government, public health and landowner representatives.

Two of the cases have been continued to December, involving Denver-based units of McElvain Energy Inc. and Encana Corp.'s U.S. operations, a COGCC spokesperson told NGI's Shale Daily. A third, involving a unit of Marathon Oil Co. that is contesting the state's allegations, is awaiting a hearing on liability and fines, said the spokesperson, adding that one other case involving Noble Energy is still in settlement negotiations.

"Most of these matters are docketed for the Oct. 28 meeting, and as of today [Thursday] we have approved administrative orders by consent [or AOC, a form of settlement] with seven operators on alleged violations of Rule 205A, Hydraulic Fracturing Chemical Disclosure. The rule spells out the required disclosures, except for 'information claimed to be a trade secret.'"

The spokesperson said an eighth case was still in negotiations, along with another "set for a contested hearing," and two cases were continued until later this year.

The seven looking to have their AOCs approved by the commission on Oct. 28 are: Bill Barrett Corp.; Laramie Energy; Kerr-McGee; ConocoPhillips; Orr Energy LLC; Synergy Resources Corp.; and Gunnison Energy Corp.

When the COGCC set the disclosure of chemicals used in fracking, it included the trade secret protections sought by the oil and gas industry. At the time, the Colorado Oil and Gas Association (COGA) said the state "now has the strongest hydraulic fracturing rule in the country," and environmental groups praised the action. They were made effective in April 2012.

The upcoming meeting will be COGCC's first chance to have a bite at the enforcement apple.

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