Colorado oil and gas regulators rejected a plan by K.P. Kauffman Co. to cover the cost of cleaning up roughly 1,000 wells in the state. The communities of Frederick and Dacono urged regulators to require the company to pay much more or make it close its old, low-producing wells they say pose health and environmental risks and hinder development.
“In order for us to make a statement that we have some of the strongest financial assurance requirements in the country, it is our responsibility to apply the rules in the way they were intended to be applied,” said John Messner, a commission member. The ECMC staff accepted KPK’s financial plan but the commission said the company needed to post a bigger bond to clean up leaks and contamination at several sites. KPK proposed upping the bond by $2.9 million, but the staff said an additional $24 million was necessary.
“Yesterday’s decision by the commissioners is the latest in a series of rulings in which KPK has been treated differently and more harshly than other operators,” the company said in a statement. “If the commissioners’ order were to stand, KPK would be the highest-bonded oil and gas operator in the U.S.”However, Jeff Robbins, commission chairman, said the decision was not influenced by the state’s enforcement actions against KPK or any legal disputes. “This is its own ball of wax.
“I do appreciate the relevant local governments taking the time to hire counsel and be involved in this,” Robbins said. “It’s important because they are the boots on the ground that are dealing with some of these things.”Warnings of orphan and zombie wells spark debate on bonding by oil, gas companies
“The Town of Frederick was involved in this issue because it is uniquely impacted by legacy oil and gas wells that are now owned by KPK,” Mayor Tracie Crites said in an email. “These wells have had numerous issues, including leaks causing contamination of both soil and water.