Troubled oil and gasoline operator Ok.P. Kauffman as soon as once more eluded a cleanup deadline because it received a decide’s keep of a state order to remediate 78 websites and pay a $2 million positive by Aug. 1 or face a shutdown.
The order by the state Power and Carbon Administration Fee, previously the Colorado Oil and Gasoline Conservation Fee, mentioned that if the positive wasn’t paid and the cleanup wasn’t accomplished the corporate would lose its proper to do enterprise in Colorado
Within the February order, the fee additionally directed the Denver-based firm, which operates about 1,200 principally low-producing wells, to droop gross sales of oil and gasoline.
The ECMC motion got here after greater than a yr of wrangling over a negotiated remediation plan between the state and the corporate, often known as KPK.
The corporate, the goal of repeated enforcement actions, sued in March to dam the fee order, alleging that the fee order disadvantaged the corporate of due course of and was arbitrary and capricious.
The corporate mentioned that with no keep of the fee order it risked going out of enterprise earlier than it had its day in court docket.
Denver District Court docket Decide Andrew Luxen agreed with KPK’s argument and stayed the ECMC order till the corporate’s lawsuit might be heard.
“KPK believes the court docket’s grant of a keep is in keeping with the legislation and info,” the corporate mentioned in a press release. “The keep allows the corporate to proceed working.”
The ECMC declined to touch upon the ruling.
Luxen famous that state regulators haven’t enforced the order to droop gross sales. In 2023, KPK has bought almost 65,000 barrels of oil and 330,000 cubic toes of gasoline, in accordance with state information.
“With the income earned whereas working because of the keep, KPK will preserve its oil and gasoline manufacturing system in Colorado safely and can proceed to fund required reporting and ongoing remediation initiatives at areas topic to COGCC regulatory oversight,” the corporate mentioned.
In November 2021, the oil and gasoline fee and KPK agreed on a plan to wash up a spate of spills and releases from wells, tanks and flowlines. That plan was prompted by an enforcement motion involving 20 violations at seven websites and adopted an April 2021 order to close 87 wells and clear up 27 websites.
As a part of the settlement a $2 million positive was diminished to $795,000 if the websites had been cleaned up. KPK mentioned that it couldn’t afford to pay greater than $795,000.
Cleanup work lagged, nevertheless, and there have been repeated conflicts between KPK and fee employees overseeing the remediation work.
On the February listening to the place the ECMC issued its order Commissioner Brett Ackerman mentioned KPK seemed to be “dragging their toes and being adversarial alongside the way in which.”
The fee voted to reimpose the complete $2 million positive.
Each oil and gasoline operator within the state is required to file a monetary assurance plan to indicate the assets it’ll use to plug and remediate its effectively websites, to ensure that its wells won’t be orphaned leaving the state to do the work.
The fee employees has rejected KPK’s proposed $1.1 million monetary assurance plan saying that $13 million is required. The problem is tentatively slated for a full listening to earlier than the ECMC in August.