Gov. John Hickenlooper today signed an Executive Order that directs the Colorado Oil and Gas Conservation Commission (COGCC) to undertake a review of its enforcement program, penalty structure and imposition of fines. The review was ordered after HB13-1267 failed to pass the General Assembly.
"The Colorado Oil and Gas Conservation Commission should re-evaluate its enforcement philosophy and approach and strive to structure fines and penalties to ensure that operators comply with rules and respond promptly and effectively to any impacts from such violation," the order says. "Appropriate penalties for violations of rules on those developing oil and gas constitute one tool available to the Commission. Penalties are designed to discourage violations and encourage prompt response in environmental or public health and safety concerns in the event that violations occur. For these reasons, Colorado requires strong and clear enforcement of the rules and assessment of fines and penalties accordingly."
The order directs the COGCC to undertake a strategic review of its violation and penalty assessment program used to enforce its rules and state law. The COGCC is also directed to evaluate its rules, consistent with its statutory authority, regarding the adjustment of fines based on aggravating and mitigating factors so as to strongly deter violations and, equally strongly, encourage prompt and cooperative post-violation response and mitigation.
The COGCC must structure these adjustments so as to hold the oil and gas industry to the highest operating standards in the nation for protection of public health, safety, and welfare, including the environment and wildlife resources. In doing so, the order directs the COGCC is directed to:
-Apply the statutory maximum as necessary to protect public health, safety, welfare, and environment;
-Establish minimum fine amounts in the case of a violation that involves an especially egregious or aggravating factor;
-Provide that certain violations or series of violations preclude the process for administrative orders on consent and must instead undergo the hearing process set forth in C.R.S. § 34-60-108;
-Make clear the process for determining the date on which a violation occurs and thereby penalties begin to accrue; and
-Post all violations and the basis for penalty assessment is made publicly available on the website.
"The Commission is directed to undertake any other necessary policy and rule changes consistent with this order and will detail its compliance with this order in a report to the Governor's Office no later than December 10, 2013," the order says.
In addition, the order says the Commission is directed to report to the Governor's Office each year by Dec. 10 on all violations, any and all penalties imposed regarding violations, and the rationale for the calculation of final penalty assessments, including fines.
Finally, the order directs the Commission to develop and adopt an "enforcement guidance" setting forth procedures for processing violations, including the issuance of notices of violations, calculating or adjusting penalties, and imposing and collecting fines.