COGCC: KP Kauffman Compliance Ruling & Denial of Appeal

The Colorado Oil and Gas Conservation Commission (COGCC) issued an order Feb. 15, 2023 re-imposing a $1.9 million fine on oil and gas operator KP Kauffman (KPK), suspended its ability to sell product, and required the company to clean its production sites. The company has 30 days to pay the nearly $2 million penalty that had been previously suspended. Furthermore, if remediation isn’t done for the 58 sites covered by the compliance plan in six months, and the fine is not paid, the company (which owns 25 low-producing oil and gas wells in Erie) could lose its right to do business in Colorado. The order followed a public hearing held Feb. 1, 2023, available for viewing here. In the hearing, the commission decided KPK had failed to make substantial progress on a compliance plan to address previous violations since its adoption in November 2021.

KPK requested more time to plan the shut in of wells while they continue to sell oil and gas to finance remediation on Feb. 27, 2023 in a public hearing sating it “lacks the ability to comply with the order because it now lacks the operating revenue necessary to shut in its many wells and flow lines.” The motion for reconsideration was denied by the commission. 

“I don’t appreciate that KPK is here today threatening the state of Colorado by threatening noncompliance,” COGCC Commissioner John Messner said. “KPK has a path to compliance and KPK alone is responsible for that compliance.” 

Despite the Feb. 15 order (1V-863), KPK has continued to sell its oil and gas, according to Caitlin Stafford, the assistant attorney general representing commission staff. 

“KPK continued, immediately after the commission order, to operate outside of compliance by surreptitiously selling products without communicating with staff,” Commissioner Brett Ackerman said. “Given this blatant disregard I just would simply not feel prudent if I were to assume that KPK is on the road to some sort of compliance.” Video of the February 27 hearing is available for viewing here.

Whether the KPK wells within the Town of Erie will be decommissioned by the operator or by the State of Colorado Orphaned Well Program remains to be seen. Also of unknown fate at this time are the ongoing KPK spill remediation projects in Erie. Additional information will be provided as it becomes available. 

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