Colorado oil and gas laws can be found in Title 34 of Colorado Revised Statutes. Pursuant to C.R.S. 34-60-104, an oil and gas conservation commission is created in the department of natural resources of the state of Colorado.
The commission consists of nine members, seven of whom are appointed by the governor with the consent of the senate and two of whom, the executive director of the department of natural resources and the executive director of the department of public health and environment, will be ex officio voting members.
Powers and Jurisdiction of the Commission
Pursuant to C.R.S. 34-60-105, the commission has jurisdiction over all persons and property, public and private, necessary to enforce the provisions of this statute, and has the power to make and enforce rules, regulations, and orders, and to do whatever may reasonably be necessary to carry out the provisions of this statute.
Any delegation of authority to any other state officer, board, or commission to administer any other laws of this state relating to the conservation of oil or gas, or either of them, is hereby rescinded and withdrawn and such authority is unqualifiedly conferred upon the commission.
Any person, or the attorney general on behalf of the state, may apply for any hearing before the commission, or the commission may initiate proceedings upon any question relating to the administration of this statute, and jurisdiction is conferred upon the commission to hear and determine the same and enter its rule, regulation, or order with respect thereto[i].
Regulation of Production
Pursuant to C.R.S. 34-60-117, the commission has authority to prevent waste and protect correlative rights of all owners in every field or pool, and when necessary should limit the production of oil and gas in any field or pool in the exercise of this authority.
If the commission limits the total amount of oil or gas which may be produced in any pool in this state to an amount less than that amount which the pool could produce if no restriction were imposed, the commission should allocate or distribute the allowable production among the several wells or producing properties in the pool on a reasonable basis, preventing or minimizing reasonably avoidable drainage, so that each property will have the opportunity to produce or to receive its just and equitable share, subject to the reasonable necessities for the prevention of waste[ii].
Civil Actions
Pursuant to C.R.S. 34-60-109, if it appears that any person fails to comply with an order issued, the commission, through the attorney general, should bring suit in the name of the state against such person in the district court in the county of the residence of the defendant, or in the county of the residence of any defendant if there is more than one defendant, or in the county where the violation is alleged to have occurred, to restrain such person from continuing such violation or from carrying out the threat of violation.
In such suit the court may grant injunctions, prohibitory and mandatory, including temporary restraining orders and temporary injunctions. Proceedings for appellate review or any other proceedings for review may be taken from any judgment, decree, or order in any action under this article as provided by law and the Colorado appellate rules, and all proceedings in the trial and appellate court shall have precedence over any other proceedings then pending in such courts[iii].
Penalties
C.R.S. 34-60-121 provides that any operator who violates any provision of this statute, any rule or order of the commission, or any permit is subject to a penalty of not more than one thousand dollars for each act of violation per day that such violation continues. Any such penalty will be imposed by order of the commission, after a hearing or by an administrative order by consent entered into by the commission and an operator.
For a violation that does not result in significant waste of oil and gas resources or damage to correlative rights or does not result in a significant adverse impact on public health, safety, or welfare, the maximum penalty should not exceed ten thousand dollars.
If any person, for the purpose of evading provisions of this statute or any rule, regulation, or order of the commission, makes or causes to be made any false entry or statement in a report or by any such rule, regulation, or order, or makes or causes to be made any false entry in any record, account, or memorandum required or destroys, mutilates, alters, or falsifies any such record, account, or memorandum, such person is guilty of a misdemeanor and, upon conviction thereof, will be punished by a fine of not more than five thousand dollars, or by imprisonment in the county jail for not more than six months, or by both such fine and imprisonment.
Any person knowingly aiding or abetting any other person in the violation of any provision of this article or any rule, regulation, or order of the commission is subject to the same penalty for the violation by such other person[iv].
[i] C.R.S. 34-60-105.
[ii] C.R.S. 34-60-117.
[iii] C.R.S. 34-60-109.
[iv] C.R.S. 34-60-121.
