A review of Colorado’s year-old law increasing fines on energy companies for breaking health, safety and environmental rules shows firms might be more careful with their operations.
The Associated Press found that regulators levied 74 fines totaling $5.3 million in the past year, far more than any year for the past 20 years. The biggest fine was $1.3 million for leaks at operations run by Benchmark Energy, a small firm that so far has been unable to pay.
The increases were prompted after legislators argued the state’s existing penalties were too light. So they upped the maximum daily fine from $1,000 to $15,000 and also removed a fine cap of $10,000 per violation. The last time the fines were changed was in the 1950s.
Colorado Oil and Gas Conservation Commission Director Matt Lepore says as a result of the increased fines, he believes energy companies are policing themselves to avoid bigger fines.
“I would surmise that operators are being more careful for fear of a substantial fine,” he said. “We aren’t seeing sort of careless mistakes and careless noncompliance.”
But he also said companies are also putting up tougher fights with the commission if they are accused of a safety or environmental violation.
Despite the increase in fines, Rep. Mike Foote, who authored the bill is not ready to call it a success.
“I’m encouraged that the Oil and Gas Conservation Commission is enforcing the rules in a more diligent way. On the other hand, I’m discouraged that some operators continue to break those rules.”
The increase in fines also came while the number of oil and gas rigs drilling in the state was down to 16 in mid-May. But there are still 54,000 producing wells in the state and Colorado also has hired more field inspectors and attorneys to enforce the rules.
