Six oil and gas operators will pay about $2 million in fines and contributions for public projects for — unknowingly — filing falsified data for toxic substances at 344 Front Range drill sites.
But at least one state regulator, as well as residents protesting the agreements, said the oil and gas companies were being let off the hook because the fines were too low.
The Colorado Energy and Carbon Management Commission on Wednesday approved the settlements with Bonanza Creek, Kerr-McGee Corp., Noble Energy, Crestone Peak Resources Extraction Oil and Gas and Highpoint Energy.
Based on the ECMC’s fine schedule the operators were liable for $11 million, but will pay $1 million plus an additional $983,000 to fund public projects.
“Tell us how we will get a break on our next speeding parking ticket,” Randy Willard, an organizer for Save the Aurora Reservoir, a grassroots community group opposing oil and gas drilling, told the commission.
“What’s the calculation? Wipe out the top 75% for being a good citizen?” Willard said. “What are the rules for if we don’t enforce them?”
The violations occurred when employees at two consulting firms working for oil and gas companies submitted falsified information to the state for drill sites along the Front Range from Northglenn to Severance.
The two firms, Wheat Ridge-based Eagle Environmental Consulting and Tasman Geosciences in Broomfield, allegedly altered laboratory data submitted to ECMC on behalf of their clients between 2021 and the summer of 2024.
In July 2024, Eagle Environmental notified Houston-based Chevron and Denver-based Civitas Resources that an employee had falsified data. Kerr-McGee is a Chevron subsidiary. Crestone and Extraction and Bonanza Creek were operated by Civitas, which is now part of SM Energy.
The oil companies notified the ECMC. The doctored reports included tests for soil, groundwater and organic contaminant sampling, including readings on benzene, total petroleum hydrocarbons and elements such as arsenic and barium.
An ECMC assessment of the sites — 86% are in unincorporated Weld County — found no additional risk to public health as a result of the bogus data, although in some cases it required revised remediation plans.
“The commission’s oversight framework depends on the accuracy of operator self-reported information,” Christiaan van Woudenberg, a former Erie trustee, told the commission. “When that trust is broken, every spill report, remediation plan and enforcement decision built upon that data becomes less credible.”
While the false reports represented a unique violation and a threat to ECMC’s dependence on reports filed by operators, the commission staff recommended a significant reduction in the penalties.
The fines were cut by about 30% because each company agreed to settle rather than challenge the penalties in a litigated hearing. Another portion of the fines was suspended provided that the operators performed various tasks to check the validity of their data.
Both approaches are standard, Jeremy Ferrin, the ECMC enforcement manager, told the commission. Settling saves time and money for the commission, and the suspensions encourage better performance and can be reinstituted for failure to comply with the conditions.
In addition, Bonanza Creek and Highpoint Energy are each contributing $100,000 to Energy Outreach Colorado, which helps low-income households with energy bills.
Noble, which is now part of Occidental Petroleum Corp., is contributing $783,000 for a range of projects including funding for the Ground Water Protection Council and a geothermal conference at the Colorado School of Mines.
“I think this is a pragmatic solution to a challenging situation that hasn’t necessarily come up before,” Commissioner John Messner said. “I think it is a reasonable solution, and perhaps more reasonable than full application of the penalties.”
Commissioner Brett Ackerman, however, pressed for the full penalties.
“This has been a deep violation of the public trust through purposeful, not negligent, but purposeful fraud,” he said. “It constitutes deliberate fraud against the citizens of Colorado and against Colorado’s environment.”
Ackerman could not persuade his fellow commissioners, and the settlements were accepted on a 4-1 vote.