The ongoing saga of an oil and gas company accused of multiple violations and in danger of losing its right to operate in Colorado has taken a new turn with a court ruling that puts on hold an order that KP Kauffman Co. comply with all state rules by Aug. 1.
The Denver company argued that to comply with the order, it would have to shut down all production because the state suspended its ability to move oil and gas from well sites. KP Kauffman, or KPK, said there isn’t enough time to shut in all the wells by the first of August, putting it at risk of losing its license.
The company asked the court to put the order by the Colorado Oil and Gas Conservation Commission on hold, saying it would suffer “irreparable harm.” Company officials said KPK can’t make money if it can’t transport its oil and gas to sell it.
Denver District Court Judge Andrew Luxen said in a Friday, June 30 ruling the company couldn’t safely shut down all its wells by Aug. 1. He approved putting the COGCC’s order on hold until KPK’s appeal of a decision that it is out of compliance with state regulations is decided.
“KPK believes the court’s grant of a stay is consistent with the law and facts. The stay enables the company to continue operating safely and responsibly while pursuing review of the commission’s order in an impartial venue, with due process protections that were denied it by the commission,” the company said in a statement.
Commission officials were unavailable to comment Monday because state offices were closed for the Fourth of July holiday.
KPK has to post $600,000 in security. Luxen rejected the company’s contention that it isn’t able to secure a bond. He said the oil and gas commission hasn’t enforced its Feb. 15 order and KPK has been able to keep operating.
Luxen said the $600,000 bond is an appropriate amount “considering the evidence presented at the hearing by COGCC in support of its argument that KPK’s past and current oil and gas operations have resulted in adverse impacts on public health and the environment.”
The COGCC issued a finding in February that KPK was substantially out of compliance with a 2021 comprehensive cleanup plan and approved the order demanding the company fully comply with all state rules by Aug. 1.
The cleanup plan addressed a number of alleged violations by KPK, including spills at well sites and leaking flowlines, small lines that carry oil and gas from wells to equipment. The COGCC declared KPK out of compliance after the commission staff said only three of 58 projects had been completed and the company’s practices endangered the public health, safety and the environment.
The COGCC also reimposed a $1.9 million fine against KPK. The company filed a lawsuit in March against the commission after regulators refused to reconsider its decision.
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