2 Colo. Code Regs. § 404-1-703
Current through Register Vol. 47, No. 20, October 25, 2024
Section 2 CCR 404-1-703 - FINANCIAL ASSURANCE FOR OTHER OIL AND GAS FACILITIES & OPERATIONSa.Centralized E&P Waste Management Facilities.(1)Submission of Financial Assurance. Pursuant to Rule 907.d, prior to the Director's approval of a Form 28, Centralized E&P Waste Management Facility Permit, the Operator will provide the Commission with Financial Assurance.(2)Amount of Financial Assurance. The Operator will provide Financial Assurance in an amount equal to the estimated cost necessary to ensure the proper Remediation, Reclamation, closure, and abandonment of the Centralized E&P Waste Management Facility. The Director may require the Operator to adjust the amount of Financial Assurance it provides to account for inflation pursuant to Rule 707.a.(1).A.(3)Release of Financial Assurance. Financial Assurance submitted pursuant to this Rule 703.a will remain in effect until the Operator submits a written request for release of the Financial Assurance demonstrating that: A. The Operator has transferred the Centralized E&P Waste Management Facility pursuant to Rule 218;B. The Director has approved final closure and Reclamation of the Centralized E&P Waste Management Facility pursuant to Rule 907.h and the Commission's 1000 Series Rules; orC. The Operator has filed a Form 4 to abandon the permit for the Centralized E&P Waste Management Facility without constructing the facility, and the facility passes an inspection for permit abandonment.b.Remediation Projects.(1)Submission of Financial Assurance. In reviewing an Operator's Form 27, Site Investigation and Remediation Workplan, if the Director determines that the Operator's Financial Assurance is inadequate to address the scope of Remediation activities contemplated by the form, the Director may require the Operator to provide Financial Assurance, or additional Financial Assurance, as a condition of approval. A. If an Operator disagrees with the Director's determination, the Operator may file an application for a Financial Assurance hearing before the Commission pursuant to Rule 503.g.(11).B. The Director may conditionally approve the Operator's Form 27, and the Operator may commence Remediation activities, prior to the Commission issuing a final order in such a hearing.(2)Amount of Financial Assurance. The Operator will provide Financial Assurance in an amount equal to the estimated cost necessary to ensure the proper Remediation, Reclamation, closure, and abandonment of the Remediation project site. The Director may require the Operator to adjust the amount of Financial Assurance it provides to account for inflation pursuant to Rule 707.a.(1).A.(3)Release of Financial Assurance. Financial Assurance required by this Rule 703.b will be held by the Director until the required Remediation of soil and/or Groundwater impacts is completed pursuant to the approved workplan and Rule 913.h.c.Seismic Operations.(1)Submission of Financial Assurance. At the time an Operator submits a Form 20, Permit to Conduct Seismic Operations pursuant to Rule 313, the Operator will file Financial Assurance to ensure the proper Plugging and Abandonment of any shot holes and any necessary surface Reclamation.(2)Amount of Financial Assurance. The Operator will provide statewide blanket Financial Assurance in the amount of $25,000, adjusted for inflation pursuant to Rule 707.a.(1).A.(3)Release of Financial Assurance. The Financial Assurance will remain in effect until the Operator submits a written request for release of the Financial Assurance demonstrating that following conditions have been met: A. All shotholes have been properly Plugged and Abandoned pursuant to Rule 436.e.(4);B. The Reclamation required by Rule 436.h has been completed;C. The Operator has submitted and the Director has approved the Form 20A for all Seismic Operations covered by the Financial Assurance; andD. All complaints received from Surface Owners have been investigated, addressed, and resolved by the Director pursuant to Rule 524.d.Gas Gathering, Gas Processing, and Underground Gas Storage Facilities.(1)Submission of Financial Assurance. At the time an Operator submits a Form 12, Gas Facility Registration, the Operator of a gas gathering, gas processing, or underground gas storage facility will provide Financial Assurance to ensure compliance with the Commission's 900 Series Rules.(2)Amount of Financial Assurance.A. The Operator will provide Financial Assurance in the amount of $100,000 for the Operator's Gas Facility(ies), adjusted for inflation pursuant to Rule 707.a.(1).A, unless the gas gathering or gas processing system meets the criteria of Rule 703.d.(2).B.B. Operators of small systems gathering or processing less than 5 million standard cubic feet per day ("MMSCFD") may provide individual Financial Assurance in the amount of $5,000, adjusted for inflation pursuant to Rule 707.a.(1).A.C. If the Director determines, based on an Operator's compliance record, the number or severity of Spills or Releases at the Operator's Gas Facilities requiring remediation, and other relevant evidence, that the Operator's Financial Assurance amount for its Gas Gathering, Gas Processing, or Underground Gas Storage Facilities should be increased, the Director will require the Operator to immediately provide additional Financial Assurance. If the Operator disagrees with the Director's determination, the Operator may file an application for a Financial Assurance hearing pursuant to Rule 503.g.(11).(3)Release of Financial Assurance. Financial Assurance submitted pursuant to this Rule 703.d will remain in effect until the Operator submits a written request for release of the Financial Assurance demonstrating that: A. The Operator has transferred the facility to another Operator pursuant to Rule 218; orB. The Operator has fully decommissioned the facility, and any outstanding Spills, Releases, and Remediation projects have been closed pursuant to the Commission's 900 Series Rules.e.Produced Water Transfer Systems.(1)Submission of Financial Assurance. At the time an Operator submits a Form 44, Flowline Report to register a Produced Water Transfer System pursuant to Rule 1101.d.(1), the Operator will provide Financial Assurance to ensure compliance with the Commission's 900 Series Rules.(2)Amount of Financial Assurance.A. The Operator will provide Financial Assurance in the amount of $50,000 per facility, adjusted for inflation pursuant to Rule 707.a.(1).A, unless the Produced Water Transfer System meets the criteria of Rule 703.e.(2).B.B. Operators of small systems transferring less than 700 Barrels of water per day may provide individual Financial Assurance in the amount of $5,000, adjusted for inflation pursuant to Rule 707.a.(1).A.(3)Release of Financial Assurance. Financial Assurance submitted pursuant to this Rule 703.e will remain in effect until the Operator submits a written request for release of the Financial Assurance demonstrating that: A. The Operator has transferred the Produced Water Transfer System to another Operator pursuant to Rule 218; orB. The Operator has fully decommissioned the Produced Water Transfer System, and any outstanding Spills, Releases, and Remediation projects have been closed pursuant to the Commission's 900 Series Rules.f.Commercial Disposal Facilities.(1)Submission of Financial Assurance. At the time an Operator submits an application for a new Commercial Disposal Well pursuant to Rule 810.a, the Operator will provide Financial Assurance to ensure compliance with the Commission's 900 Series Rules by all surface facilities and structures appurtenant to the Commercial Disposal Well. This Rule 703.f does not relieve the Operator of its obligation to provide Financial Assurance for the Well itself pursuant to Rule 702.(2)Amount of Financial Assurance. The Operator will provide $100,000 in Financial Assurance for each Commercial Disposal Well facility, adjusted for inflation pursuant to Rule 707.a.(1).A.(3)Release of Financial Assurance. Financial Assurance submitted pursuant to this Rule 703.f will remain in effect until the Operator submits a written request for release of the Financial Assurance demonstrating that: A. The Operator has transferred the Commercial Disposal Well to another Operator pursuant to Rule 218; orB. The Operator has Plugged and Abandoned the Commercial Disposal Well, passed final Reclamation for the Oil and Gas Location and all surface facilities appurtenant to the Well, and has completed any Remediation required by the Commission's 900 Series Rules.37 CR 16, August 25, 2014, effective 9/30/201438 CR 01, January 10, 2015, effective 2/14/201538 CR 03, February 10, 2015, effective 3/2/201538 CR 07, April 10, 2015, effective 4/30/201538 CR 16, August 25, 2015, effective 9/14/201539 CR 04, February 25, 2016, effective 3/16/201641 CR 05, March 10, 2018, effective 4/1/201841 CR 06, March 25, 2018, effective 5/1/201841 CR 23, December 10, 2018, effective 12/30/201842 CR 02, January 25, 2019, effective 2/14/201942 CR 17, September 10, 2019, effective 9/30/201942 CR 24, December 25, 2019, effective 1/14/202043 CR 17, September 10, 2020, effective 9/30/202043 CR 13, July 10, 2020, effective 11/2/202043 CR 24, December 25, 2020, effective 1/15/202145 CR 07, April 10, 2022, effective 4/30/202245 CR 09, May 10, 2022, effective 5/30/202245 CR 13, July 10, 2022, effective 7/30/2022