Colorado’s new oil and gas regulations could get a test as officials consider a struggling company’s effort to show it can meet its obligations under the law.
Larry Bosaw walks near a closed well where he discovered an oil and gas pipeline leak last year at his farm in Fort Lupton, Colorado on Thursday, September 15, 2023. Larry and Mary Bosaw, who live near Fort Lupton, have something in common with municipal officials and landowners in Frederick and Dacono as well as state regulators: They want K.P. Kauffman Co. to take care of the problems created by its oil and gas operations.
In a Sept. 12 email to KPK, Larry alluded to the long list of well sites the state says the company needs to clean up. He said the work on his property “would take far less effort and then you could scratch it off your list.” If Fredrick and Dacono invoke the rule, they would be the first local governments in Colorado to do so. Frederick Mayor Tracie Crites said the town is urging the ECMC to reject KPK’s financial plan because its proposed budget for closing wells and reclaiming well sites is considerably lower than the staff’s estimate of what it costs: roughly $130,000 per well.
The company also has a history of spills and releases from its well sites in Frederick, the town said in a statement to the ECMC. The latest information suggests there are 17 open remediation sites in Frederick. An ongoing matter is the cleanup of a well site and tanks near Legacy Elementary School. KPK has about 70 wells in Dacono and 59 of those are low producers and, in the opinion of city oil and gas experts, should all be plugged, said Steven Louis-Prescott, an attorney representing the city. About 22% of the 59 wells have had leaks or spills, based on the available data, he added.
The concern is the public will end up paying if companies go bankrupt or walk away, leaving what’s called. Another worry is so-called “zombie wells,” ones that produce little or no oil or gas and whose owners don’t have the money to properly maintain or close them., which uses fees paid by the industry to pay to close wells when the owner can’t or won’t. Colorado got $25 million from the federal infrastructure bill in 2022 to help cover costs.
The ECMC said KPK has to include what it will cost to remediate several sites and will hear from the company in the Oct. 24 hearing. Earlier this year, regulators determined KPK had not complied with a 2021 plan requiring it to clean up sites and resolve what the ECMC staff said were multiple violations over several years. KPK had until Aug. 1 to fix the problems or face losing its license to operate in Colorado.said the company couldn’t safely shut down all its wells by the deadline and stayed the ECMC’s until KPK’s appeal of the state’s order is decided.
Louis Conrad, general manager of BCL Colorado LP, knows the drill. His company is developing the subdivision Clearview Villages on 103 acres near Legacy Elementary School in Frederick and asked KPK to close two wells on the property. The development company owns the surface, but KPK has the right to mine the minerals.
“No big deal, but what is a big deal is that, ethically speaking, I feel it’s my duty to make sure the site looks the best for the school, the kids and our future residents,” Conrad said. “It can be frustrating because you’re basically asking them to shut down a business that they have. They would like to get as much money as they possibly can for that business,” Lee said.Specter of “orphan” oil, gas wells drives debate over proposed update of state rules
In the case of the Bosaws, the Fort Lupton couple, Raab said KPK is ready to fill in the hole once additional soil samples are collected. He said the couple’s property is one of several sites KPK has been ready to backfill pending the ECMC’s approval, which he called “unreasonably delayed” by questions about levels of naturally occurring metals in the soil.
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