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Colorado Oil and Gas Conservation Commission Adopts Changes to Enforcement and Penalty Rules

January 11, 2015

On January 5, 2015, the Colorado Oil and Gas Conservation Commission (COGCC) amended Rules 522 and 523 governing enforcement and penalties. These amendments implement House Bill 14-1356, which the legislature adopted last April. Among other things, HB 14-1356 increases the daily maximum penalty per violation from $1,000 to $15,000, requires the COGCC to assess a penalty for each day of violation, and eliminates the previous cap of $10,000 in total penalties for violations not resulting in significant adverse impacts. As explained below, these amendments revise the way in which penalties are calculated and will significantly increase potential penalty amounts in many circumstances.

In addition to amending its enforcement and penalty rules, the COGCC also adopted uncontested amendments to more than 20 other rules. Many of these amendments only clarify existing rules, but some are substantive, including amendments to Rules 317.e (amending casing and cement program requirements), 317.r (adding an anti-collision evaluation requirement for certain offset wellbores), 317.s (adding fracture stimulation setback requirements), 319.a (amending plugging requirements), and 603.e (amending well control equipment requirements). A complete copy of the amended rules can be found online here. All of the amendments are likely to be published in the Colorado Register on January 25, which should make them effective on February 14.