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FINANCIAL ASSURANCE AND ENVIRONMENTAL RESPONSE FUND <br />`e • <br />t , <br />COGCC Rules & Regulations <br />http{(tvww.dnr.siate.co.u: III IIIIIIIII IIII III s.asp <br />I 999 <br />~b L, <br />FINANCIAL ASSURANCE AND <br />ENVIRONMENTAL RESPONSE FUND <br />701. SCOPE <br />~a-~~ ~ s z9' S~ <br />Na,tit ~ : (J~' L~ ~b . <br />The rules in this series pertain to the provision of financial assurance by operators to ensure the performance <br />of certain obligations imposed by the Oil and Gas Conservation Act (the Act), §34-60-106 (3.51, 1111 and 1121 <br />C.R.S., as well as the use of the Environmental Response Fund IERFI, §34-60-124 C.R.S., as a mechanism to <br />plug and abandon orphan wells, perform orphaned site reclamation, and remediation, and to conduct other <br />authorized environmental activities. <br />702. GENERAL <br />Operators are required to provide financial assurance to the Commission to demonstrate that they are capable <br />of fulfilling the obligations imposed by the Act, as described in this series. Except as otherwise specified <br />herein, a surety bond, in a form and from a company acceptable to the Commission, is an approved method of <br />providing financial assurance. Any other method of providing financial assurance identified in §34-60-106(BI, <br />C.R.S., shall be submitted to the Commission for approval, and shall be equivalent to the protection provided <br />by a surety bond and may require detailed Commission review on an ongoing basis, including the use of third <br />party consultants, the reasonable expense for which shall be charged to the operator proposing such <br />alternative financial assurance. <br />a. When the Director has reasonable cause to believe that the Commission may become burdened <br />with the costs of fulfilling the statutory obligations described herein because an operator has <br />demonstrated a pattern of non-compliance with oil and gas regulations in this or other states, <br />because special geologic, environmental, or operational circumstances exist which make the <br />plugging and abandonment of particular wells more costly, or due to other special and unique <br />circumstances, the Director may petition the Commission for an increase in any individual or <br />blanket financial assurance required in this series. <br />b. The requirements of this series do not apply to situations where financial assurance has been <br />provided to federal or Indian agencies for operations regulated solely by such agencies. <br />703. SURFACE OWNER PROTECTION <br />Operators shall provide financial assurance to the Commission, prior to commencing any operations with heavy <br />equipment, to protect surface owners who are not parties to a lease, surface use or other relevant agreement <br />with the operator from unreasonable crop loss or land damage caused by such operations. The determination <br />that crop loss or land damage is unreasonable shall be made by the Commission after the affected surface <br />owner has filed an application in accordance with the 500 Series rules. Financial assurance for the purpose of <br />surface owner protection shall not be required for operations conducted on state lands when a bond has been <br />filed with the State Board of Land Commissioners. <br />The financial assurance required by this section shall be in the amount of two thousand dollars IS2,0001 per <br />well for non-irrigated land, or five thousand dollars (55,000) per well for irrigated land. In lieu of such <br />individual amounts, operators may submit statewide, blanket financial assurance in the amount of twenty five <br />1 0(4 529/99 12:08 PM <br />