Drilling industry says new rules too strict and warns of possible closures with fines

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GRAND JUNCTION, Colorado — Colorado oil and gas regulators postponed a decision on a new fine structure for rule violations after industry representatives said it could lead in some cases to companies shutting down or curtailing drilling operations.

Jamie Jost, an attorney representing the Colorado Oil and Gas Association industry group, told members of the Colorado Oil and Gas Conservation Commission that the proposal could hurt companies for circumstances beyond their control in some cases.

Attorneys for environmental groups argued that fines should be required in the case of violations that create a high risk of health, safety and environmental impacts, the Grand Junction Daily Sentinel reported Wednesday (http://tinyurl.com/mworugf ).

The commission is considering the new fine structure to comply with a state law passed this year and an executive order by Gov. John Hickenlooper. The law raises the daily penalty limit from $1,000 to $15,000 for each violation and requires commissioners to assess a penalty for each day a violation occurred.

Jim Walker, who is with Petron Development, a company that operates low-yield wells, said that under the kind of fines being considered, his company could go out of business if it faced an enforcement action of any significance.

Colorado Oil and Gas Conservation Commission director Matt Lepore said his agency would still have discretion in determining the per-day fine amount. He said the agency in the past has issued compliance orders in ways to ensure a company could continue to operate and have revenue so it could provide revenue for cleanup of contamination or reduce the impacts of a violation.

Through Oct. 28, the commission issued 45 enforcement orders for the year and imposed more than $1.4 million in penalties. The highest fine was $155,000.


Information from: The Daily Sentinel, http://www.gjsentinel.com

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