KP Kauffman could lose right to oil and gas business in Colorado

KP Kaufmann, a violation-stricken oil and gas company, on Wednesday promptly paid a $1.9 million fine from state regulators to wipe out 78 production sites or lose the right to do business in Colorado. I was ordered to

The company’s ability to sell oil and gas was also suspended, and it was ordered to cease production activity in the oil fields. It will take him 30 days to pay the fine and six months to complete the removal. The cleanup clock will start ticking when formal orders are issued in about two weeks.

A company known as KPK loses its license to operate in Colorado for failing to pay fines and clean up, according to a ruling by the Colorado Oil and Gas Conservation Commission.

“The KPK will consider all options arising from the COGCC’s decision, including the possibility of appealing to the Denver District Court, and is confident that it will be able to block any such action by the Commission,” the company said. said in a statement.

The commission’s action comes after more than a year of controversy over an agreement Denver-based KPK signed with the state in November 2021 to clean up spills and emissions from wells, tanks and flowlines. I was.

However, work has been delayed and only three of the 58 designated sites have been cleaned, creating tensions between company and commission staff. According to Commissioner Brett Ackerman, the KPK appeared to be “limping and hostile along the way.”

The agreement began with a large-scale enforcement action involving 20 violations at seven sites, resulting in April 2021 orders to close 87 wells and clean up 27 sites.

Violations at various sites included improper waste storage and failure to report and clean up spills.

The global agreement ultimately included 78 sites, according to the COGCC. As part of the agreement, the commission reduced his $2.02 million fine to $795,000 if the site was cleaned up.

In testimony, the KPK said it could not afford to pay a fine of more than $795,000.

As part of Wednesday’s decision, the commission also scrapped blanket decontamination agreements.

In June, staff told the committee that KPK had not made progress and called for sanctions against the company.

At the time, KPK Chief Executive Kevin Kaufman said in testimony that fines would undermine decontamination efforts and that efforts were being made to improve communication with the COGCC.

The company was given another six months and its performance was subject to a three-day hearing that ended Wednesday. Commission staff said little progress had been made.

In some cases, we had to submit forms as many as seven times due to errors and inaccuracies. In one case, the same solid waste manifest was attached to two different site forms.

A staff presentation found sagging fences, incomplete sampling, outages or inadequate work at some sites.

KPK attorney John Jacus said the company had hired an independent contractor, submitted a cleanup plan as required under the contract, and had already spent $7.2 million on the restoration, resulting in a “substantial compliance”.

Kevin Tautkus, who is overseeing the project for KPK contractor MarCom LLC, said when he took over the project in July, “form submissions were significantly delayed,” but said submissions had improved. Stated.

The KPK said there were occasional delays due to the slow response of committee staff.

Another MarCom consultant, Levi Kirk, said only three sites have been closed, but nine are nearing completion, and 23 may be completed by the end of the year.

“KPK has gotten a lot better,” says Kirk. “It’s a work in progress.”

But Nikki Graber, the commission’s environmental supervisor for the Denver-Julesburg Basin, said, “We haven’t seen any progress that would lead to closure at many of these sites.”

The committee was not convinced.

“There’s a saying: Fool me once, shame you. Fool me twice, shame on you,” said Commissioner John Messner. “A commissioner who will never be deceived again.”

Commissioner Karin McGowan said that the KPK’s string of excuses “similar to a bad middle school student”.

Still, the KPK warned that the commission’s actions “have unintended consequences”.

The decision to block the company’s ability to sell oil and gas makes it impossible to fund its operations and cleanup work.

“Rather than protecting public health and the environment as required by the COGCC’s mission, today’s decision puts them at risk,” the company said.

The company made the same argument at a public hearing, where Commissioner Ackermann asked COGCC environmental manager Greg Delanroe if taking action against KPK would have an environmental impact.

“By implementing its operations, KPK has caused significant environmental impacts,” Deranleau said. “I believe their ongoing activities continue to do so.

Deranleau said there was a risk that KPK would cease operations and its wells and sites would be included in the state-run orphan well program.

“But there’s no better period, so I think the long-term outlook is better once the bleeding has stopped and the cleanup work begins,” he said.

Andrew Fawkes-Gudmundsson, senior manager of environmental group Earthworks, agreed with Delanlo. “If this means taxpayers cleaning up the KPK mess, which is unfortunate, but the company cannot be allowed to continue to pollute.”

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