In a bold move to safeguard public health and facilitate development, the town of Frederick and its neighboring community Dacono have initiated a novel strategy aimed at compelling oil and gas operator K.P. Kauffman (KPK) to plug and abandon a total of 45 old wells.
The two municipalities are leveraging a recently revised section of the rules set forth by the Colorado Energy and Carbon Management Commission (ECMC) that now permits local governments to petition for the closure of wells deemed no longer “used or useful.”
By filing their petition, Frederick and Dacono argue that these wells present potential threats to safety and hinder local development efforts.
This revised authority is relatively new; it was introduced following the adoption of new financial assurance rules by the ECMC in 2022, which broadened the scope for local governmental petitions.
This marks a historic first for local governments in Colorado, as no other municipality has yet attempted to exercise this power.
The upcoming hearings by the ECMC regarding the petition are set to commence this Wednesday.
Interestingly, this is not the first time Frederick has sought to compel KPK to plug old wells. In 2023, both communities attempted to put forth an application to plug 95 wells. However, their efforts at that time failed, as they encountered resistance from KPK.
The Denver-based operator, KPK, currently faces a substantial $1.9 million fine due to various violations, having amassed a total of 148 violation notices since 2020, as documented by state records. For the past three years, KPK has been engaged in legal disputes with the ECMC.
In its prehearing statement, KPK asserted that the application of Rule 211 was being misapplied and warned that an order to plug the wells would “strip KPK of its valuable assets and mineral leaseholds without just compensation.”
The company further contended that the oil and gas consultants employed by the municipalities had both undervalued the wells and overestimated the costs associated with plugging them.
KPK claimed that the municipalities had worked in coordination with developers to identify specific wells hindering development and included them in the application.
“It is improper to argue that making way for surface development is a valid purpose of Rule 211, and thus the application should be denied for this reason alone,” KPK asserted in its filing.
The company emphasized the significant value of the subject wells, asserting that they do not pose the health, safety, or environmental threats suggested by the municipalities.
Frederick and Dacono have isolated 45 KPK wells, with 26 located in Frederick and 19 in Dacono, which are particularly close to residential areas, schools, and parks.
Among these are wells situated within 500 feet of homes, with one well being surrounded by 76 residences in close proximity.
Frederick indicated in its filings the dangers associated with these wells, citing numerous spills that have occurred within the town over the years.
There have been 45 reported spills involving KPK in Frederick since 2018, including four incidents happening within a mere two-week span in January.
A key focus of the ongoing hearings will revolve around the assessment of each well’s status, specifically whether they are indeed “used and useful.”
For instance, an evaluation of KPK’s Cosslett A 4 well in Dacono, located near the rapidly developing intersection of Interstate 25 and Colorado 52, found that it had not produced oil or gas in three years and had incurred operating losses during that period.
Dacono’s oil and gas consultant classified this well as no longer producing and therefore suitable for plugging in accordance with state regulations.
KPK, however, disputes these findings, arguing that the well retains a total proven value of $143,400 and that its lack of production is solely due to a closure order placed on it by the ECMC.
Additionally, the municipalities pointed out that other oil and gas operators in the area, including Occidental Petroleum, Civitas, and PDC Energy (recently acquired by Chevron), have successfully plugged numerous wells, further highlighting KPK’s reluctance to do the same.
Frederick and Dacono have criticized KPK for its lack of action, stating, “KPK should have plugged and abandoned its old wells years ago.”
They alleged that KPK demands exorbitant fees of $250,000 or more to plug and abandon a well, profiting at the expense of landowners and the public.
As the hearing progresses, it remains to be seen how the ECMC will address the municipalities’ concerns and respond to KPK’s firm stance on the matter.
image source from：https://coloradosun.com/2025/06/10/kpk-dacono-frederick-idle-oil-gas-wells/
