On March 6, 2026, the Colorado Energy and Carbon Management Commission issued 157 Notices of Alleged Violation (NOAVs) to oil and gas operators across the state. This is nearly double the previous single-day record of 82 set in October 2018, and the largest enforcement action of its kind in at least a decade. It is a signal that the agency may be taking a more assertive approach to operator accountability.
The violations fall into three categories.
- Fifty-seven operators failed to maintain the minimum required general liability insurance coverage of $5 million per occurrence under Rule 705.b., the coverage designed to protect communities from property damage, bodily injury, and pollution caused by oil and gas operations.
- Forty-three operators failed to file their annual Form 1B license renewal and registration.
- Fifty-seven operators failed to remit the Marginal Well Fee for 2024, collected specifically to fund the plugging and remediation of orphaned and marginal wells across Colorado.
Of the 157 notices, 43 operators were cited for all three violations simultaneously, meaning they are currently operating without proof of insurance, without a current license, and without contributing to the fund designed to clean up the industry’s own legacy of abandoned wells. An additional 14 operators filed their annual registration but still failed to provide proof of insurance or pay the Marginal Well fee.
What This Means
To be clear: these are notices of alleged violation, not penalties. For most operators, the practical financial stakes will be far lower than allowed by statute. The date of alleged violation for all 157 notices is April 30, 2025, meaning operators have technically been out of compliance for nearly a year before receiving this notice on March 6, 2026. Using the ECMC’s penalty matrix and a 310-day violation period, maximum daily penalties could theoretically reach $775,000 for the insurance violation (Class 2, Minor at $2,500/day), and $62,000 each for the Form 1B and Marginal Well fee violations (Class 1, Minor at $200/day) — a combined maximum exposure approaching $900,000 per operator cited for all three violations.
Will the ECMC collect these penalties? In reality, the ECMC routinely waives penalties when operators come into compliance (as we saw with chemical disclosures), and most of these operators will likely face little to no fine if they act quickly. That is both a reasonable enforcement posture and, frankly, a generous one — and it makes the failure to have complied in the first place, for nearly a year, all the more difficult to excuse.
The Case Against KP Kauffman
Once again, KP Kauffman tops this list, having been issued all three NOAVs. In the last 10 years, the ECMC has issued 160 NOAVs against KP Kauffman. This is one of Colorado’s most prolific operators of marginal wells (86% of their active wells are classified as low producing), currently fighting a revocation of its license to operate, and now formally cited for failing to provide the ECMC with proof of the $5 million insurance coverage required to protect communities from property damage, bodily injury, and pollution.
KPK operates 19 low-producing wells within 2,000 feet of Weld County schools, and 144 within one mile of schools. The company has warned regulators that enforcement actions could push all of its wells into the state’s orphaned well program, leaving taxpayers responsible for cleanup costs estimated in the tens of millions.
KPK’s continued pattern of non-compliance raises serious questions about whether the ECMC’s current enforcement posture is sufficient to protect the communities and taxpayers who bear the consequences when operators like KPK fall short of their obligations.
The Bigger Picture: Wells Near Schools
This enforcement action lands at a moment when we’ve just launched our Marginal Well campaign. We’ve identified 45 low-producing wells within 2,000 feet of Colorado schools: aging, poorly maintained wells that leak methane and other volatile organic compounds (VOCs) into the air that children breathe every day. KP Kauffman and C & J Field Services were both cited in Thursday’s NOAVs and operate nineteen and two low-producing wells within 2,000 feet of Colorado schools, respectively. Both were cited for all three violations.
The connection here is direct. The Orphan Wells Mitigation Enterprise (the industry-funded program established by SB22-198 to plug and reclaim orphaned and marginal wells across Colorado) is largely funded by the very Marginal Well fees that 57 of these operators failed to remit. Every dollar not paid into that fund is a dollar unavailable to plug a well within sight of a Colorado school.
Round Two applications for the Enterprise Marginal Well Plugging program are open now through April 2, 2026. There is no out-of-pocket cost to operators. We are encouraged that the ECMC is beginning to enforce the rules that make this system work, and we will keep pushing until every well within sight of a Colorado school is permanently plugged.
This story would not have been possible without the research and data analysis conducted by our partners at EcoCarto, who dug into the numbers so we could bring this to you.
