2 Colo. Code Regs. § 404-1-704
Current through Register Vol. 47, No. 20, October 25, 2024
Section 2 CCR 404-1-704 - SURFACE OWNER PROTECTION BONDSa.When Surface Owner Protection Bonds Are Required. To protect Surface Owners from unreasonable crop loss or land damage caused by Oil and Gas Operations, if a Surface Owner is not a party to a lease, Surface Use Agreement, or other relevant agreement with an Operator, the Operator will provide Financial Assurance to the Commission prior to commencing any operations with heavy equipment on that Surface Owner's property. (1)Amount of Financial Assurance. Operators will provide Financial Assurance of: i. $4,000 per Well for non-irrigated land;ii. $10,000 per Well for irrigated land; oriii. $100,000 as a statewide blanket bond.(2)State Lands. If Oil and Gas Operations are conducted on state lands and a bond has been filed with the State Board of Land Commissioners, an Operator need not file a Surface Owner protection bond pursuant to this Rule 704.b.Procedures for Claiming Surface Owner Protection Bonds. A Surface Owner may file an application for a Financial Assurance hearing pursuant to Rule 503.g.(11) if the Surface Owner believes that crop loss or other damage caused by Oil and Gas Operations subject to this Rule 704 is unreasonable. (1) The Surface Owner will bear the burden of proving that it has withstood unreasonable crop loss or land damage.(2) If the Commission finds in favor of the Surface Owner, the Commission may order an Operator to conduct corrective or remedial action, provide a monetary award for unreasonable crop loss or land damage that cannot be Remediated or corrected, or other relief as appropriate. The amount of such a monetary award is not limited to the amount of the Operator's Financial Assurance provided pursuant to this Rule 704.c.Release of Financial Assurance. Financial Assurance provided pursuant to this Rule 704 will be held until:(1) For an individual Surface Owner protection bond:A. The Operator transfers the Well subject to the Surface Owner protection bond pursuant to Rule 218;B. The Operator Plugs and Abandons the Well subject to the Surface Owner protection bond, the Well passes final Reclamation, and any necessary Remediation is conducted as demonstrated by closure of any Form 19, Spill/Release Report or Form 27, Site Investigation and Remediation Workplan;C. The Operator files a Form 4 to abandon the permit for the Well subject to the Surface Owner protection bond without constructing the Oil and Gas Location or Spudding the Well, and the Well passes an inspection for permit abandonment; orD. The Operator enters into a Surface Use Agreement, lease, or other relevant agreement with the Surface Owner.(2) For a blanket Surface Owner protection bond:A. The Operator transfers all drilled Wells subject to the Surface Owner protection bond pursuant to Rule 218;B. The Operator Plugs and Abandons all drilled Wells subject to the Surface Owner protection bond, all Wells subject to the Surface Owner protection bond pass final Reclamation, and any necessary Remediation is conducted as demonstrated by closure of any Form 19 or Form 27;C. The Operator files a Form 4 to abandon the permit for all Wells subject to the Surface Owner protection bond without constructing the Oil and Gas Location(s) or Spudding the Well(s), and the Well(s) pass an inspection for permit abandonment; orD. The Operator enters into a Surface Use Agreement, lease, or other relevant agreement with all Surface Owners subject to the Surface Owner protection bond.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