The Colorado Energy and Carbon Management Commission (ECMC) has taken a measured approach regarding the fate of wells operated by K.P. Kauffman, also known as KPK, in Weld County. While acknowledging the operator’s conduct as disreputable and negligent, the commission has declined to grant a comprehensive order to plug all wells in the towns of Frederick and Dacono.
The towns had sought the order under a revised provision in state oil and gas rules, requesting the abandonment of 42 marginal wells that they argued posed significant public health risks. Instead of approving this broad request, the commission mandated KPK to plug and abandon just three wells—two in Frederick and one in Dacono—within the next year.
In response to the decision, Frederick Mayor Tracie Crites expressed disappointment, stating that the ruling fails to adequately address the wide-ranging concerns associated with the wells, particularly their implications for public health and long-term economic impacts on the local communities.
Originally, the municipalities sought to have 45 wells plugged; however, they amended their petition to include 42. KPK’s attorney announced that the company is currently reviewing the commission’s latest decision. This hearing marked the second attempt by Frederick and Dacono to compel KPK to plug its wells. An earlier effort in 2023 aimed to use the commission’s new financial assurance rules to address 95 wells but did not succeed.
During the commission’s deliberation, an initial vote resulted in a narrow 3-2 outcome, with some commissioners advocating for action on a total of 26 wells—nine in Frederick and 17 in Dacono. Commissioner Trisha Oeth remarked on the evidence presented during the hearings, stating, “The way in which they are conducting operations does present a threat to public health, safety and welfare.”
Oeth further elaborated that the operator’s practices have raised substantial concerns about their compliance with industry standards in Colorado, labeling KPK as chronically noncompliant and recalcitrant. KPK, based in Denver, is currently facing substantial penalties amounting to $1.9 million due to 148 violation notices issued since 2020, and has been engaged in ongoing legal disputes with the ECMC for three years.
Commissioner Mike Cross criticized KPK for its apparent disregard for responsible oil and gas development, emphasizing KPK’s failure to adhere to regulations that govern all operators in Colorado. Despite the evident issues, the commissioners concluded that many of the concerns surrounding KPK would need to be resolved through distinct enforcement actions beyond the immediate decisions made regarding the well closures.
The wells under scrutiny, some of which have been in place since the 1970s, have reportedly produced minimal oil and gas in recent years. Several of these wells are located in close proximity to residential areas, a school, and a park—raising further alarms for local health and safety.
The towns presented arguments asserting that these wells are no longer “used or useful,” as defined by state regulations, which stipulate that inactive wells should be plugged and the site remediated. The ECMC concluded that the three specified wells were no longer serving any productive purpose.
However, during the hearings, KPK defense witnesses offered testimony and data showcasing the remaining oil and gas reserves in the wells, suggesting potential alternative uses for the facilities, such as carbon capture storage. In contrast, experts presented by the municipalities indicated that certain wells were not even generating enough revenue to cover their ongoing operational costs.
Despite the changes in regulation—Section 211, which allows local governments to petition for well closures—Commissioner Brett Ackerman highlighted that the commission applies this authority sparingly. He underscored that the bar for invoking this regulation is exceptionally high, indicating that all reasonable alternatives must be exhausted first.
ECMC Chairman Jeff Robbins shared his perspective on KPK’s operation shortcomings but ultimately determined that the evidence presented did not meet the necessary burden of proof for closing the wells to protect public welfare at this moment.
In summary, while the commission’s decision represents some progress, it leaves unresolved concerns for the communities of Frederick and Dacono regarding their local environments and public health implications.
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