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Bill to hike oil and gas spill fines passes out of committee

April 10, 2014, 1:48 pm
natural gas rig

A natural gas rig in western Garfield County (David O. Williams photo).

A bill aimed at significantly upping fines for oil and gas spills and other violations of Colorado law by drilling companies passed out of the House Transportation & Energy Committee Wednesday.

Sponsored by state Rep. Mike Foote, D- Lafayette, the bill represents another shot at legislation that failed late in the session last year.

“In addition to increasing the maximum fines available, we should ensure the system provides a legitimate deterrent to companies that consider cutting corners,” Foote told the Rocky Mountain Post late last year.

“A big part of that means addressing the work-arounds the industry has been using for years to avoid significant fines. I’m hopeful the industry will accept the need for those things and support a strong bill.”

Foote’s latest attempt at increasing fine amounts has the support of the Colorado Department of Natural Resources, the Colorado Oil and Gas Association (an industry trade group), Conservation Colorado and other conservation groups around the state.

HB 1356 (pdf), which now heads to the House Finance Committee, allows for a maximum fine of $15,000 per violation per day as opposed to the current limit of $1,000 per violation per day. The bill also eliminate the current $10,000 cap for violations that do not significantly impact public health, clarifying that companies will be penalized for every day a violation occurs.

“Right now companies can negotiate and be penalized for a lower number of days,” Foote said in a press release. “If you break the rules for 30 days, you should be penalized for 30 days.”

The state’s chief regulatory agency under the DNR — the Colorado Oil and Gas Conservation Commission (COGCC) — will be required to hold a hearing if it finds evidence of gross negligence or willful misconduct, and the state agency can then prohibit new drilling permits or suspend permits that have already been issued.

The COGCC must also post a quarterly online report listing violations and penalties that have been assessed.

“Colorado has some of the lowest fines for oil and gas violations in the entire country,” Foote said. “This bill incentivizes good behavior and holds operators who break the rules accountable.”

The Transportation & Energy Committee voted 9-4 to advance the bill, with Rep. Don Coram, R-Montrose, joining the Democratic majority in voting for the bill.

It remains to be seen whether the bill can make it out of House and Senate, where some Republicans have vowed to fight legislation viewed as anti-energy development. Voters in four Colorado cities last fall approved so-called “fracking bans” to prevent the drilling technique known as hydraulic fracturing.

“They’re sure to be emboldened by the passage of those fracking bans, and I get that feeling that … they want to bring more restrictions on the oil and gas industry up in the legislature,” Sen. Greg Brophy, R-Wray, told the Rocky Mountain Post before the session began. “I don’t think that they’re going to pass, but they’ll bring them up.”

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David O. Williams is an award-winning energy, environment, sports and outdoor writer based in the Vail Valley. His work has appeared in publications as diverse as the The New York Times, Chicago Tribune, Denver Post, SKI, SKIING, Powder, People, LA Weekly and the Huffington Post.

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