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Politics

Fines For Colorado Energy Companies Raised Significantly

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Dan Boyce
/
Inside Energy
A Halliburton fracking operation in Colorado.

Energy companies that violate Colorado regulations will now face significantly steeper fines. The Colorado Oil and Gas Conservation Commission approved new rules Jan. 5 that include fines up to $15,000 a day.

The rulemaking follows a 2014 law passed by the Colorado legislature that raised fine maximums from $1,000 a day to $15,000 a day. That law also removed the $10,000 maximum fine cap that had been in place since 1955.

"This marks a considerable change in the way we do business. Toughening major penalties for violators is an important component of our ongoing efforts to strengthen our oversight, enforcement and compliance program," said Matt Lepore, director of the Colorado Oil and Gas Conservation Commission, in a statement.

The commission retained the right to reduce fines for operators who self report a violation. The goal of such a practice is to encourage companies to report problems rather than hiding them.

The rules include a matrix the commission will use to determine the fine amount, said Lepore.

"So we have two criteria by which we begin to determine the appropriate penalty."

For example, Lepore says a paperwork violation would not be as severely punished as mishandling waste. The penalty also depends on the violation’s impacts on public health and safety and the environment.

As The Denver Post reports, the commission also limited the COGCC director's discretion to waive penalties in the most serious cases. The Post has also reported that COGCC imposed penalties for 72 percent of citations in 2014. In 2013, that number was 40 percent.

Some cases where penalties have been waived in the past include the oil spills from industry facilities during the September 2013 floods, a natural disaster.

The rules will go into effect in about six weeks, after they have been published by the Colorado Secretary of State's Office.

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