Justin Wasser, 202.753.7016, firstname.lastname@example.org
In response to a Colorado Oil and Gas Conservation Commission (COGCC) hearing today, Environmental groups were adamant that Denver-based oil and gas operator K.P. Kauffman should not be rewarded continued authorization to do business in Colorado as they openly violate financial assurance rules and threaten the health and safety of nearby communities. Earthworks and Rocky Mountain Wild released an interactive map that shows the location and production of K.P. Kauffman 1,206 wells, and the location of the 279 spills it has had since 2020.
“K.P. Kauffman is openly defying the new financial assurance rules,” stated Andrew Forkes-Gudmundson of Earthworks, a national environmental group. “Supposed ‘best in the nation’ rules that are not enforced are meaningless. At this point, K.P. Kauffman’s wells are producing little more than polluted soil and groundwater in Colorado. It is time the COGCC put people before this reckless operator and show them the door.”
After passing its financial assurance rules in March 2022, the COGCC heralded the rules as the “Strongest in the Nation.” The rules were designed to decrease the likelihood of wells becoming “orphaned” when an operator is no longer in business or cannot afford to properly plug and reclaim a well, and to require adequate financial assurance in the form of cash or surety bonds, letters of credit or other instruments.
According to its financial assurance plan filed with the state, K.P. Kauffman has some of the least productive wells in the state with 1,206 wells averaging less than 1 barrel of oil a day per well. With such low producing wells, it poses the highest risk of bankruptcy and therefore must post “single well financial assurance” to cover the full cost of plugging and reclaiming its wells and well sites.
The COGCC estimates K.P. Kauffman’s single well financial assurance costs at $110,000 per well. The COGCC estimates plugging costs at $10,000-$40,000/well depending on the depth of the well and $100,000 to fully reclaim the wellpad and access roads.
Rather than post $110,000 financial assurance per well, K.P. Kauffman’s financial assurance plan offers less than $9,000 per well. Earthworks argues K.P. Kauffman’s plan is in clear violation of the new financial assurance rules.
In the fall of 2021, after several multi-day hearings, K.P. Kauffman was found to have committed a pattern of violations of COGCC rules. The COGCC staff took the rare position that K.P. Kauffman should lose its ability to operate in the state because of its repeated violations. The staff also assessed $2 million dollars in fines for various rule violations.
At the K.P. Kauffman COGCC quarterly check-in on October 19, 2022, COGCC Environmental Manager Greg Deranleau reported that 80% of his department staff time is dedicated to KPK compliance – taking them away from all other work. Deranleau stated, “I don’t believe that the current path neutralizes [KPK’s] ongoing threat to public health, safety, welfare, the environment.”
Over the past year, the list of open remediation projects has grown from 58 to 74 sites as more spills have been discovered and few sites have been cleaned up. In that time, the COGCC has also issued K.P. Kauffman ten new notices for alleged violations of its rules.
On January 25, the COGCC will start another multi-day hearing on K.P. Kauffman to determine if it has made sufficient progress in its clean-up efforts to allow it to continue operating in the state. Forkes-Gudmundson stated, “Earthworks supports the position of COGCC staff who have requested that K.P. Kauffman lose its ability to operate in the state. K.P Kauffman is a threat to public health and the environment.”
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