Regulators in Colorado who have been trying to enforce high fines on gas and oil companies working in the state have found some rather strong opposition in recent days. Those opposing the increase in the fines and penalties are the companies working in the petroleum industry, naturally. The fines are only for those companies that break the rules and regulations, but the oil industry is arguing that the price of the penalties is far too high. Given the fact that many companies right now are struggling with the reduced price of oil, especially some of the smaller companies, these fines could cause some serious damage if implemented.
The fines can be as high as $15,000 a day in some cases, and the companies feel that fines of this magnitude could cause companies to cut back on jobs. Leaders in the oil industry also said that companies that openly and voluntarily report violations and issues should not receive penalties, and that they feel the regulators should consult with the violators before they issue any citation.
Currently, the plans are on hold. The commissioners that regulate the industry in the state will not reconvene until January 7th. At that point, it’s expected that they will try to rework their current plan and create a system that offers better enforcement, and perhaps fines that are more in line with reality. This year is the first since 1955 that there has been an increase in the fines. Previously, the regulators could issue fines of $1,000 a day for a max of 10 days, equaling $10,000. Now, companies have to pay one and a half times that a day with no cap on the number of days they have to face fines. This seems rather extreme.
On the other side of the fence, a number of environmental groups feel that if they were to lower the fine, or remove them for companies that fess up to violations, there would not be as much of an incentive to stay within the boundaries of the law. They reason that a company could beg for forgiveness when they admit to their wrongdoings time and again and never have to face any real penalties.
After the commission reconvenes, they will hopefully come up with a plan that is suitable to both sides of the argument.
Note: This is a summary of the article that appeared in the Denver Post on December 16, 2014
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