Denver, Colorado - The Justice Department, the U.S. Environmental Protection Agency (EPA) and the state of Colorado Tuesday announced a settlement with Denver-based K.P. Kauffman Company Inc. (KPK) resolving alleged violations of the federal Clean Air Act and Colorado air quality regulations.
The settlement, set forth in a consent decree lodged with the U.S. District Court for the District of Colorado, requires KPK to implement pollution control measures at 67 well production facilities – for a total estimated expenditure of $2.5 million. The company will also pay a $1 million civil penalty.
Today’s settlement resolves allegations made in an Oct. 5, 2018, complaint that KPK violated requirements to minimize volatile organic compound (VOC) emissions from its oil and natural gas production operations in the Denver-Julesburg Basin. VOCs are a key component in the formation of ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma, and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis.
The well production facilities covered by this settlement are in an area that does not meet National Ambient Air Quality Standards established under the Clean Air Act for ground-level ozone: the Denver Metro/Northern Front Range ozone nonattainment area. Today’s action will contribute to the improvement of air quality in communities across the Front Range by reducing the emissions of VOCs that lead to the formation of ground-level ozone.
“Oil and gas production fuels our economy, but it must be done responsibly,” said Jeffrey Bossert Clark, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We will continue to take action where operators fail to comply with our nation’s clean air laws.”
“This is the fourth joint settlement EPA has completed with the State of Colorado to secure compliance and reduce emissions from storage tanks at oil and gas operations,” said EPA Regional Administrator Gregory Sopkin. “The EPA continues to enforce the Clean Air Act, and our partnership with the State continues to deliver cleaner, healthier air for Colorado’s communities.”
This settlement covers 67 KPK oil and gas production facilities in Colorado’s Denver-Julesburg Basin. As part of the agreement, KPK will implement measures to improve operation and maintenance practices and ensure the vapor control systems on its storage tanks are adequately designed and sized. These improvements, including monthly or quarterly inspections using infrared cameras and the installation of pressure monitors to detect and respond to excess emissions, are expected to reduce VOC emissions from KPK’s operations by approximately 424 tons per year.
KPK will also implement three environmental mitigation projects to further reduce VOC emissions. First, KPK will install rod lifts at 12 oil and gas wells to reduce or eliminate the need to unload the well – a procedure used to increase well production during which emissions are vented to the atmosphere. Second, KPK will use a Boreal Laser to scan for methane emissions at all well production facilities covered by the consent decree, and if necessary, will follow up with corrective actions to address the emissions. Third, KPK will implement operation and maintenance requirements, including increased inspections, at four production facilities not covered by air pollution regulations due to their small size. KPK estimates that these mitigation projects will reduce VOC emissions by an additional 131 tons per year.
The settlement also requires KPK to pay the United States and the state of Colorado a $1 million civil penalty, split evenly between the governments.
Today’s action is based on inspections of KPK operations conducted from 2013 to 2018 by EPA and the Colorado Department of Public Health and Environment, which found VOC emissions from many of KPK’s storage tanks. Through these inspections and information requests, EPA and the state of Colorado identified alleged violations of Colorado’s Regulation Number 7, including undersized vapor control systems and inadequate operation and maintenance practices. These alleged violations include federally enforceable requirements of Colorado’s State Implementation Plan to improve air quality in the Denver Metro/Northern Front Range non-attainment area.
This settlement represents the latest in a series of EPA and state actions to secure compliance and reduce emissions from oil and gas sources in the nonattainment area, including recent settlements with Noble Energy Inc. (2015), PDC Energy Inc. (2017), and HighPoint Operating Co. (2019). With today’s action, a total of 3,141 well production facilities in the area are now subject to compliance requirements mandated by joint federal/state consent decrees. In addition, when combined with state-issued compliance orders, 93 percent of production facilities with condensate storage tanks in the Denver ozone nonattainment area are currently subject to enhanced design or maintenance requirements, or both.
The consent decree, lodged in the U.S. District Court for the District of Colorado, is subject to a 30-day public comment period and final court approval. The consent decree will be available for viewing at: https://www.justice.gov/enrd/consent-decrees.