Prospect energy - Coloradoan
Thomas Clayton
Prospect Energy will not be allowed to operate in the state under this state agreement
Ignacio Calderon
Earlier this summer, Larimer County and the city of Fort Collins reached agreements with Prospect Energy, resulting in the closure of its oil and gas wells in the county.
Now, the company will not be allowed to operate in Colorado.
This week, the Colorado Energy and Carbon Management Commission held a hearing where Senior Assistant Attorney General Caitlin Stafford presented a stipulated order finding violation, known as an SOFV, against the company.
This essentially lays out the state agency’s enforcement action, beyond the county and city agreements.
“ECMC and Prospect recently entered into this stipulated order finding violation to resolve multiple violations of ECMC rules pertaining to flaring gas during production activities at Prospect’s Hearthfire location and the failure at multiple wells to conduct annual bradenhead testing,” Stafford said.
The agency calculated the penalties for these violations to total $1.7 million, but these would be waived in exchange of revoking Prospect’s right to operate in the state. The company would use its remaining funds to properly shut its wells instead.
“This is not the ideal outcome, but the provisions set forth in this SOFV will go a long way to ensuring protections to public health, safety, welfare, the environment and wildlife resources, especially in those communities nearest to Prospect’s operations,” Stafford said.
Trisha Oeth, the director of environmental health and protection for the state’s department of public health and environment, asked Stafford at the meeting how the decision to suspend penalties was reached.
“Was there an assessment done of how many assets and how many resources Prospect Energy has? How much is it going to cost for them to safely shut in these wells, and is that cost greater than the amount of assets that they have?” Oeth said, adding that if the company has additional assets beyond the cost of safely shutting in these wells, it could afford a smaller penalty.
Stafford said agency staff performed an analysis using Prospect’s financial documentation and found the company would not have resources left to pay penalties.
“It's always the goal for operators to be able to fulfill all of their obligations under the Oil and Gas Conservation Act, including being financially responsible for (closing their facilities),” Stafford said. “However, it's clear Prospect is unable to do this, and it's hard to see a scenario where Prospect’s facilities do not end up in the orphan well program at some point.”
A history of complaints and violations
In past years, the members of the communities around Prospect Energy facilities have been outspoken about the conditions nearby.
Residents near the Krause tank battery site reported strong odors of hydrogen sulfide, which is often associated with a rotten egg smell. According to the Centers for Disease Control and Prevention, exposure symptoms can include nausea, headaches, convulsions and eye irritation.
In 2019, a fire broke out at Prospect’s Fort Collins Meyer tank battery, less than 300 feet from homes in the Hearthfire neighborhood, causing fear and concern.
Larimer County filed a complaint against Prospect Energy with state agencies citing “recurring negligence,” as previously reported by the Coloradoan.
“The county’s position is that if this operator is not able to conduct its operations safely, it should not be allowed to operate at all,” Larimer County principal planner Matt Lafferty wrote in the county’s letter to the Air Pollution Control Division at the time.
And the pollution went beyond affecting air quality when a ruptured pipe containing highly concentrated saltwater contaminated soil and a nearby ditch last year.
But these kinds of incidents haven’t always been met with long-lasting consequences. A 2022 report from the Energy and Carbon Management Commission shows the agency calculated a $61,050 penalty for a previous violation from Prospect, but that was reduced to $5,000 contingent upon additional compliance.
In 2022, one of Prospect’s facilities was ordered to shut down by the state health department's Air Pollution Control Division, but months later the cease-and-desist order was lifted and the Krause tank battery site north of Fort Collins was allowed to reopen with changes to its operation.
This year, however, Prospect has been dealing with separate agreements with local government and state agencies to seek compliance from the company.
While some had questions about the waived Energy and Carbon Management Commission penalty during the hearing this week, they agreed it was the best outcome given the circumstances.
Under the agreement, the company's principal owner, Ward Giltner, "would be prohibited from conducting future oil and gas operations without permission from this commission," Stafford said. The order document also says, "Mr. Giltner must first pay the assessed and suspended $1,711,793 penalty before the Director considers the request."
Unless there’s any additional interventions, the stipulated order finding violation will become a final order on Aug. 28, Kelsy Been, a public information officer from the state, told the Coloradoan over email.
“I don't love that we are suspending the entire penalty, but I really appreciate that the staff did the analysis,” Oeth said.
Oeth also worries about the precedent a decision like this could set.
“In my mind at least, this is a very unique situation, and not one that I think we are likely to see repeat itself in the sense that having an operator that has such significant violations with significant public health risks … would have a penalty suspended,” Oeth said.
 | Tom Clayton Communication and Media Specialist, Public Affairs |
| Commissioners' Office 200 W Oak St, Fort Collins, 80522 | 2nd Floor W: (970) 498-7005 tcla...@larimer.org | www.larimer.org |