DENVER State regulators fined Kinder Morgan CO2 Co. $98,000 Monday for drilling wells without a permit in Montezuma and Dolores counties.
Kinder Morgan agreed to a settlement prior to Mondays hearing of the Colorado Oil and Gas Conservation Commission.
The violations were paperwork problems, and they caused no environmental damage and wasted no resources, said Michael Wozniak, lawyer for the company.
Theres really not an excuse for not following up with the state as quickly as they should have, Wozniak said. We worked very hard to do a self-audit as soon as this was disclosed.
Once regulators uncovered the problem, Kinder Morgan began looking for more problems and found unpermitted wells dating back to 2003.
Because the violations went on for so long, the law allowed for a maximum fine of $700,000. The COGCC found 73 separate violations for failure to get drilling permits and not reporting when wells are drilled or abandoned.
But regulators agreed to a lower fine because the company volunteered so much information and took steps to make sure they dont happen again, said Robert Willis, enforcement officer for the COGCC.
It took them several months to do that, so they worked very hard to do that, Willis said.
All of the wells were on federal land, and Kinder Morgan had drilling permits from the U.S. Bureau of Land Management. But Colorado requires a state permit for all wells, whether they are on private or federal land.
The state keeps a close watch on its natural resources, and it requires permits to drill as well as reports that detail when a well is completed or abandoned.
Kinder Morgan extracts carbon dioxide from the McElmo Dome formation in Montezuma County and sends it by pipeline to Texas, where the gas pressurizes oil fields to increase production. It is one of the worlds largest reservoirs of carbon dioxide.
The company also operates a smaller field in Dolores County called Doe Canyon.
Reach Joe Hanel at joeh@cortezjournal.com.