State warns oil and gas: Break rules, expect fines
RIFLE—Oil and gas companies that continue to break rules can expect heightened scrutiny when regulators consider fines against them for violations, the director of the Colorado Oil and Gas Conservation Commission said Thursday.
“We’re not going to tolerate repeat offenders,” Matt Lepore said at the Northwest Colorado Oil and Gas Forum, a quarterly event attended largely by local industry representatives.
Lepore was speaking in reference to a recent executive order by Gov. John Hickenlooper obligating the agency to review its enforcement and fine approach to ensure that companies are strongly deterred from violating rules. The order came after the failure of a bill that would have increased the agency’s maximum daily fine from $1,000 a day to $15,000 a day.
One part of the order requires the commission to establish circumstances under which staff are precluded from negotiating a settlement and fine amount with a company, and the matter instead must go to a commission hearing.
Lepore said those circumstances are likely to include things such as recidivism by a company, and cases involving very significant violations with highly adverse impacts.
Lepore said the Hickenlooper administration supports oil and gas development, but it’s also important to protect a state that Lepore called a “darned pretty place to live.”
“I don’t want anything that this industry does to change that in any way,” he said.
He said Hickenlooper has been clear that the state expects “the highest and best” from oil and gas companies.
“That means if you violate our rules you should expect to be penalized,” he said.
The Hickenlooper administration had supported the increase to $15,000 a day, but took issue with a required minimum fine in the legislation that it thought took away flexibility in enforcement matters.
Lepore said that under the current fine schedule, a lot of cases involve enough days and enough violations “that fines can become meaningful when they need to be when there are significant transgressions.”
He said he thinks part of what Hickenlooper is asking is to be more publicly transparent and explicit regarding what factors the agency considers in imposing a specific fine.
Addressing media coverage contending that the agency doesn’t impose sufficient fines, Lepore said it does reach negotiated settlements and fines with companies in most cases, but that’s encouraged by state law and no different from the plea-bargaining that often occurs in criminal prosecution.
“We do adjust from what is the maximum (fine) available. To me, that is just frankly not news,” he said.