May 2020 Colorado Oil & Gas Conservation Commision Meeting Notes

As provided by the COGCC Town of Paonia Local Governmental Designee – Dave Knutson –

COGCC Webcast 5/11/2020
Commissioners, Boygan Eaton, Gibbs, Haun, Hopkins, Messner, Overshire, Putnam All
commissioners were in attendance.
Staff: Director Robbins started it off. Andrew Forkes-Gudmundson says hi. The White Paper
about readiness is available on the COGCC website. 2020 FAQs are also available. The focus
of this zoom meeting is to cover COVID-19 readiness and response during the pandemic and
low commodity prices.
Purpose of Whitepaper: explain engineering standards, explain field inspections, outlook for
the industry, and finally compliance deadlines based on COVID-19.
There is no expectation that the pandemic will effect field inspection staff, the digital upload of
all reports and continued work will not hamper field staff as well as content experts
(environment, reclamation, and enforcement).
A chart on well status covered 2019-2020 active wells, shut-in wells, and temporarily
abandoned wells. Mike Leonard is acting field operations manager. Dave Andrews is the
Engineering Manager. Wells can be shut on a regular basis but also because of economics.
There was an increase of shut-in wells and abandoned wells. Mechanical Integrity Tests (MIT) is
required on abandoned wells to ensure the plugging of the well is sound.
Analogy of a garden hose used to explain terminology of well status (see white paper).
Operators are required to report monthly their wells and well status. Director Robbins asked
why we rely so much on reports from operators which is after the fact. Staff’s immediate
concern is public safety, and pumpers/field inspectors learn of an inability to operate the well,
the COGCC can shut it down.
Financial insurance rules require reviews at least annually. If a well is abandoned, COGCC falls
back on the ability to take it over and access bonding financing. Field Inspections this year
have increased approximately 25-30% during January – April. The pandemic has not impacted
the frequency of field inspections. As of April, there are only four rigs in the state. Some
operators have had to decrease plugging of wells due to staff COVID infections. Spills during
this time are required to be reported and cleaned up. January had 46 new spills, February 53,
and March about 51 spills and tracking consistent with last year’s data. There are over 52,000
wells in the state operated by 421 operators.
COGCC cannot control price or production, but does have authority to shut down a well. There
was some compliance release but none that impacted public safety, health, or wildlife. Notices
to Operators allowed operators to do electronic signatures, and to extend approval deadlines if
no impact to health.
The bottom line is that COGCC is poised to continue responsible regulation of oil and gas to
protect public health, safety, and wildlife.
Commissioner Eaton was concerned about the ability to deal with distressed operators.
Commissioner Putnam cited air pollution control division continued inspections and the plan to
enhance remote inspections. Commissioner Hahn wondered about how this is a public
meeting without allowing public input and that the white paper was not released in advance.
This is not a “public hearing” but a public meeting. They wanted to make sure that the paper
and FAQs were accurate so that was why it was delayed until this morning.
Commissioner Hopkins noted that 40% of operators have 90% of the wells. An average of over
1100 wells per operator. The other 60% have 13 wells each on average. It seems the smaller
operators have less exposure but also lower financial capabilities to handle a downturn. The
vast majority of temporarily abandoned wells are old vertically drilled wells. Since there was an
increase of almost 20% of these, Hopkins expressed this as a harbinger of what’s to come.
Western Slope Industry representatives commented about the markets and how they plan to
respond. Industry representatives requested that COGCC use fact-based decision-making as
they proceed. Director Robbins meets weekly with industry reps.
Current financial assurance protocols seem to be adequate and do not suggest that
modifications are needed. The professional Commission will be engaged in rulemaking per SB
181 and financial assurance will be addressed next. There is over $8.7 MM in the orphan well
fund to take care of issues with financial insolvency and abandonment of wells. There is an
expectation that $5 MM will be spent each year in addressing abandoned wells. The ED and
staff feel strongly that they will be able to be protective of public health in the face of
abandonment of wells.
Editorial: The COGCC Commissioners are very engaged and ask good questions of their staff. I
did not get confidence that staff is well informed and ready in a timely way, if economics
suddenly create a bankrupcy and an operator abandons the well. The current volunteer
commission represents a wide range of perspectives and is not reluctant to discuss
disagreements. Almost 300 people joined this conference
Link to White Paper: