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Colorado Regulator Suspends Oil Company’s Ability To Operate Wells

Colorado’s oil and gas regulator, the Colorado Oil and Gas Conservation Commission, or COGCC, suspended one company’s ability to sell or transport oil and gas for six months, along with suspending its ability to operate its 1,00 wells.

K.P. Kauffman, operating in the Denver-Julesberg Basin, has found itself on the wrong side of the regulator, and now must spend its six-month suspension bringing its operations into COGCC compliance. If Kauffman fails to bring it into compliance by that time, it could lose its ability to do business in Colorado at all.

KPK was also ordered to pay $2 million in fines, previously deferred, within 30 days. COGCC had given Kauffman a plan to follow to bring its operations in compliance back in 2021, but the COGCC grew tired of the lack of progress, which was trickling in.

COGCC commissioner Brett Ackerman had some harsh words about the regulatory decision, describing Kauffman’s performance as “just enough compliance to make a rote argument that it should be allowed to continue to operate.

Colorado’s crude oil production averaged around 440,000 bpd in November, according to the latest data from the Energy Information Administration.

KPK said in an emailed statement that it disagreed with the commission’s ruling, arguing that it had provided evidence that it had made progress on fulfilling the requirements of the 2021 plan. What’s more, KPK argues that without continuing oil and gas sales, it would not be able to fund the remediation activities called for in the plan.

In May, the COGCC, citing a “pattern of violations” at KPK’s well sites, said it saw “no improvement in operations or compliance” by KPK, adding that it had seen instead “a lack of commitment to right the ship.”

The COGCC referenced numerous spills since the original plan was set in motion.

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KPK, for its part, said it had spent $3 million so far on the compliance agreement.

By Julianne Geiger for Oilprice.com

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