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Colorado commissioners have decided to allow for higher fines for oil and gas industry violations

After much debating, the Colorado Oil and Gas Conservation Commission (COGCC) has decided to approve heavier penalties for oil and gas well operators who violate state regulation. The new penalties include fines of up to $15,000 per day, up from a nearly 60-year old measure that called for fines of $1,000 per day and a $10,000 maximum cap, echoing a decision made last year by the Colorado legislature.

The decision from the Colorado legislature followed an executive order by Gov. John Hickenlooper calling for changes in the fine structure. COGCC commissioner John Benton said, “If the legislature said $15,000, it may not be appropriate to reduce that number.”

“This marks a considerable change in the way we do business,” said Matt Lepore, director of COGCC. “Toughening major penalties for violators is an important component of our ongoing efforts to strengthen our oversight, enforcement and compliance program.”

Doug Flanders, a member of the Colorado Oil and Gas Association, was supportive of the new rules, reports the Denver Business Journal. “Overall, we’re on the same page with the COGCC and have the same goal, which is to ensure consistency, clarity and certainty as to how the new rules will be enforced, who penalties will be calculated, and how both will be applied to stakeholders.”

The COGCC commissioners also decided to lower the maximum daily fines for the least serious violations, such as paperwork filed late, to $200 from $500, reports the Denver Post. The commissioners also decided to limit the COGCC director’s discretion to waive all penalties in serious cases and tightened language protecting the right to protest a director’s ruling on a complaint.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.