According to data from the Colorado Oil and Gas Conservation Commission (COGCC), oil and gas drillers were fined more than $3.4 million in the first half of 2016. This comes as the state has hired an additional nine inspectors and revamped its system of penalties for spills and safety violations. As drilling continues in Colorado, it is critical that operators ensure the health of communities and the safety of their workers. Companies failing to do so must be held accountable.
Yesterday Colorado Public Radio reported that many oil and gas companies receiving fines in Colorado are small operations, for which fines are a significant financial burden. This is not surprising for a couple of reasons. First, small and midsize oil and gas companies make up the majority of operators. While companies like Encana, Noble Energy and Anadarko are well known within the state, more than 300 operators have been active within the past year. Second, small operators may lack the resources or personnel to conduct maintenance or implement safety programs.
It is encouraging that Colorado is stepping up efforts to ensure that drilling is done safely within the state. In 2014, the Colorado state legislature approved a bill updating the state’s system of fines for the first time since 1955. Finalized in 2015, the updated rules removed a $10,000 limit on fines for each violation, allowing companies to be fined up to $15,000 per day for violating safety and environmental rules. Companies with a track record of negligence and breaking the law can have their right to drill within the state revoked. Importantly, these common sense reforms to the state’s system of fines were supported by both environmentalists and the Colorado Oil and Gas Association.
Across the West, inspectors for oil and gas regulators are stretched thin. In 2015, Colorado inspectors were each responsible for roughly 2,000 wells. According to a survey of seven Western states by the COGCC, Wyoming had the highest ratio of 2,900 wells per inspector, Alaska had the lowest ratio of 370 wells per inspector, and Colorado was near the seven-state average of 1,670 wells per inspector.
Hiring more inspectors has allowed the state to boost the number and frequency of inspections. In fiscal year 2014-15, Colorado regulators conducted more than 36,000 inspections with roughly 1.5 years between inspections. That’s nearly twice the number of inspections conducted in fiscal year 2012-13.
With an average of nearly two oil and gas-related spills each day in Colorado, it is clear that companies must take steps to reduce spills and increase drilling safety. It is encouraging that regulators are increasing inspections of oil and gas operations and holding companies that violate the law accountable. While oil and gas production will continue in Colorado, companies that repeatedly endanger the health and safety of communities and workers should be told to leave.