Comments to Colorado Regulators on Oil and gas Financial Assurance Rulemaking

March 15, 2021

Oil and Gas Conservation Commission of the State of Colorado
1120 Lincoln St., Suite 801
Denver, CO 80203

Dear Commissioners:

Thank you for initiating a Financial Assurance (FA) rulemaking and for the opportunity
to submit stakeholder comments on the Informational Docket.

Earthworks is a national nonprofit organization committed to protecting communities
and the environment from the impacts of mining and energy development while
seeking sustainable solutions.

It is very appropriate that the enabling legislation behind the FA rulemaking is Senate
Bill 19-181, which requires stronger protection of the public welfare from the impacts
of the oil and gas industry. If the COGCC were starting from scratch to craft FA for a
previously unregulated area, the 700 Series rules in force today would be considered
an unviable approach to protecting public welfare…

…Earthworks support the recommendation in the FATWG report that COGCC should develop a model to determine the risk posed by an operator’s holdings with regard to P&A and reclamation costs, in relation to its financial resources and assurance levels. We recognize that the Commission currently lacks the ability to conduct such an assessment, but also that such an evaluation may be necessary to minimize the state’s risk and liability. In other words, if an operator cannot guarantee that it can hold 100% liability for its profit-generating activities, it is worth asking whether that operator should be allowed to do business in Colorado.

Thank you for your time and consideration of our comments. Earthworks looks forward to continued dialogue with COGCC and the many stakeholders whose engagement will ensure the promulgation of comprehensive and effective financial assurance rules in Colorado.