A Lafayette lawmaker says Colorado’s system of levying fines against oil and gas companies for environmental disaster like the spill this month near Parachute Creek is totally out of whack with other states and needs to be brought “into this century.”
Sponsored in the state House by Rep. Mike Foote, D-Lafayette, and in the Senate by Sen. Matt Jones, D-Louisville, House Bill 1267 (pdf) would increase the maximum daily fine for violators of Colorado Oil and Gas Conservation Commission (COGCC) regulations to $15,000 and repeal the cap on maximum total fines.
Current law dating to the 1950s sets the daily fine limit at $1,000 and caps maximum fines at $10,000, which Foote argues doesn’t adequately punish polluters and lags far behind other major oil and gas producing states. His bill passed out of the House Transportation & Energy Committee on an 8-5 party-line vote last week and was sent to the Finance Committee.
“In the Texas legislature there’s a proposal to increase [fines] to $200,000 per violation, per day, with no cap,” Foote told the committee last week, “and apparently there’s a trade association that’s in favor of that bill.”
Texas officials currently can issue fines of $10,000 per day for oil and gas violations, and Pennsylvania law allows for a $25,000 fine plus $1,000 a day for conventional wells, and $75,000 plus $5,000 per day for unconventional gas wells.
A representative of the Colorado Oil and Gas Association (COGA), a trade group representing the state’s booming oil and gas industry, told the Boulder i Journal on Tuesday that COGA will work with Foote on HB 1267 going forward.
“While industry was not consulted prior to the introduction of HB 1267, as noted in COGA’s testimony during the committee hearing, we look forward to working with state Rep. Foote on his legislation,” COGA’s Doug Flanders said.
“Oil and gas regulations must work to both protect the environment and the business climate by encouraging best practices without being punitive. There are over 107,000 Colorado men and women whose jobs are supported by the industry. Our families are passionate about protecting the communities in which our families live, work, and play.”
The Colorado Oil and Gas Conservation Commission (COGCC), the state agency that both regulates and facilitates oil and gas drilling in the state, revealed on Tuesday that Parachute Creek spill on the Western Slope near the Garfield County town of Parachute may trace back to a valve box on a pipeline servicing a nearby Williams Corp. gas plant.
“We will be discussing the latest developments regarding the ‘Parachute Plume’ – the most recent environmental disaster that is threatening our drinking water source,” Dave Devanney of Battlement Concerned Citizens wrote to members on Tuesday. Battlement Mesa is retirement community near Parachute that’s surrounded by drilling activity.
Williams, which self-reported the Parachute spill earlier this month, has so far reportedly collected about 6,000 gallons of oil and 60,000 gallons of tainted water. There is growing concern about the potential for spills along the far more populace Front Range, where communities east of Boulder are bracing for more drilling and lawmakers are trying to implement more stringent regulations.
“Current fine and enforcement actions in Colorado are merely slaps on the wrist for multi-million-dollar oil and gas companies and lag far behind other energy producing states,” Conservation Colorado Executive Director Pete Maysmith said a recent press release.
Critics of COGCC regulation of the industry point to long delays for investigations during boom cycles and a lack of transparency and publicity once settlements are agreed to and fines are actually levied. It took years, for example, for fines totaling $316,350 to be levied against two companies for a 1.2-million-gallon fracking-fluid spill into a tributary of Parachute Creek on the Roan Plateau in 2008.
Since then, oil production in Colorado has surged, with 48 million barrels produced in 2012, according to COGCC stats (pdf). That’s a 24 percent increase over 2011 -- a year that saw a 20 percent increase over 2010.
“The growth in oil production can be attributed primarily to the giant Wattenberg Field in the Denver Basin just north and east of the Denver metropolitan area,” the COGCC reports. “Operators there are combining improving technologies in horizontal drilling and hydraulic fracturing to increase production from the Niobrara Formation.”
A citizen “fractivist” group called East Boulder County United held a fracking forum last weekend attended by Foote and other concerned politicians. Lafayette officials may consider a fracking ban like the one approved by Longmont last year that got the city sued by COGA and the state, which maintains it holds the ultimate regulatory authority over drilling.
Fort Collins earlier this month voted to implement a fracking ban despite threats of legal action from Gov. John Hickenlooper, and Boulder County earlier this year extended its fracking moratorium into June.
Boulder County Commissioner Elise Jones, the former head of Environment Colorado, will debate Hickenlooper April 1 in Denver on fracking and state versus local control over drilling.