By Jen Schumann | Rocky Mountain Voice
Buried wells, sworn affidavits and a state determined to make an example. This is the opening chapter of a three-part series on one oil and gas company’s final stand—and what the documents and data actually reveal. Start with the towns. Stay for the verdict.
Start with the towns. Stay for the verdict.
In September 2024, the cities of Dacono and Frederick uploaded a PDF to the Energy and Carbon Management Commission’s (ECMC) filing system. It was short, simple—and explosive. The two municipalities weren’t asking for a cleanup, a fine or a negotiated fix. They were asking the state to order the permanent plugging and abandonment of 45 wells operated by K.P. Kauffman Company (KPK).
Their argument relied on Rule 211, a provision historically used by ECMC staff to force cleanup of derelict sites with no active operator. But this time, the complaint didn’t come from the agency—and the operator wasn’t absent.
KPK’s wells weren’t gushing, abandoned hazards. There weren’t clouds of H₂S wrinkling the noses like the smell of rotten eggs–or runaway emissions either. They were maintained. They were productive.
KPK was very much still in business. And suddenly, it was facing the first-ever use of Rule 211 as a local-government enforcement tool.
While framed in environmental terms, the cities’ filings repeatedly referenced frustrations with KPK’s presence hindering residential growth. In one exhibit, they complained of “difficulties allowing and encouraging development” near the wells. Another filing cited “barriers to future land use.”
Though not stated outright, the subtext was unmistakable: the wells—and the company that operated them—were in the way. As ECMC Commissioner Brett Ackerman later warned, “I do not view the Rule 211 process as a vehicle for affecting well closures related to convenience or land use matters.”
“Rule 211 is not the tool I would have chosen for this proceeding.” That was ECMC Chair Jeff Robbins at the June 26, 2025 hearing. But Robbins voted with the majority anyway.
By submitting the application, local governments opened the door to a regulatory interpretation many in the industry had long feared: the use of environmental statutes not just to compel remediation, but to achieve political or land-use goals by other means.
A new weapon
The city filings cited a familiar list of complaints: wells shut in too long, visible spills or stains, nuisance odors. Their exhibits included aerial maps with houses drawn in, screenshots of oil-and-gas filings and blurry photos of rusted equipment. But one of KPK’s attorneys, Chris McGowne, stated, “We proved that many, if not all, of the health and safety allegations were either wrong or already addressed. They attempted to cherry pick, and even the Commission saw through it.”
The most aggressive claim wasn’t about mess or maintenance. It was about usefulness.
The cities argued the wells were no longer “used or useful” under Rule 211’s language and therefore must be plugged. They also argued KPK was pressuring developers to pay “hostage fees” in exchange for surface access agreements, portraying the company as a holdout, not a producer.
The legal framing was new. Rule 211 had never been used this way.
KPK’s legal team argued that the cities had misused Rule 211—not to remediate environmental harm, but to resolve development delays. The statute, they asserted, was intended for orphaned or derelict wells, not active sites caught in regulatory limbo.
For decades, surface use agreements—not regulatory action—were how municipalities and operators resolved land-use conflicts. Avi Mehler, KPK’s Land Manager, testified that KPK had executed more than 30 such agreements in Frederick and Dacono alone. In many cases, developers compensated KPK to plug wells that conflicted with future construction.
“These are standard, arm’s-length transactions,” Mehler said, “for them to purchase the wells for plugging and abandonment and acquire the surface rights.”
But KPK argued that the Rule 211 filing by Frederick and Dacono discarded that long-standing model. Instead of negotiating, the towns attempted to bypass condemnation law by framing the wells as a public health threat. Mehler told commissioners the filing reflected a local policy to put one private interest above another.
To make their point, KPK referenced a statement from Frederick’s mayor, quoted in a Colorado Sun article and read aloud during the hearing: “We are trying to bring in commercial and industrial growth, and we find developers say that they are stuck and they cannot develop on the land because of these oil and gas wells.”
To KPK, that wasn’t a safety concern—it was a land-use grievance repackaged as environmental urgency.
The commission wasn’t unified in its reasoning. While KPK emphasized regulatory overreach and private negotiation norms, Commissioner John Messner offered a more clinical interpretation: “If it is not currently being used, it is not used.”
Damned if you do, fined if you don’t
For months, KPK showed the commission that the wells weren’t abandoned—they were producing, remediated, shut in by ECMC itself or already under repair. In multiple cases, the company had already submitted Form 27 plans, repaired flowlines or filed supplemental remediation reports. None of it seemed to matter.
One well had already been signed off by ECMC and had a reclamation bond released but was still listed by the cities as a “problem site.”
Another had been plugged years earlier but was still flagged in city maps.
And some wells had been shut in not by KPK’s choice but by ECMC order.
Jeffrey Kauffman argued that the state’s own shut-in orders are now being used to justify permanent abandonment. “We could turn them on tomorrow,” he said, “and they would be productive and profitable.”
“We operate over 1,100 wells in Colorado,” he told the commission. “We have more than 160 employees. Our vertically integrated service companies allow us to maintain cost control, availability and quality. And we have no debt. That means no debt service—so we don’t carry that cost.”
Kauffman described their yard location in the heart of the Spindle Field, with 13 workover rigs, water trucks, hot oilers and a fleet of excavation equipment. He argued that KPK’s physical and financial position belied any notion that the company was negligent or incapable.
But procedural blocks showed up throughout the June 18 hearing. Objections were sustained that prevented KPK witnesses from fully responding. Cross-examinations were shut down for “straying beyond direct testimony,” while commissioners repeatedly allowed their own legal inquiries and late-stage evidentiary clarifications.
Staff members who had previously denied KPK remediation plans were given latitude to reframe those denials as proof of ongoing violations.
Selective enforcement, comparative silence
In the company’s opening presentation, KPK laid out a series of slides showing that other operators with similar or worse conditions had not been subject to the same regulatory treatment. Pages 4 through 11 of the presentation displayed case-by-case examples, contrasting KPK’s flagged wells with those operated by companies like Black Resources and Vision Energy. These operators experienced active H₂S releases, VOC contamination or ongoing NOAVs, yet none had been subjected to a blanket Rule 211 closure request.
Even so, Commissioner Mike Cross dismissed the idea of unequal treatment:
“Mr. Peterson testified that ECMC treats KPK differently than other operators. But nothing could be further from the truth,” Cross said. “Staff denied hundreds of Form 27s this year for operators other than KPK. Those other operators expeditiously work to resolve the issue and resubmit. KPK does not.”
To KPK’s attorneys, that framing missed the point. As McGowne had put it earlier:
“KPK is the only operator being dragged into Rule 211 under this theory of ‘no longer useful.’ And yet, they’re the ones spending millions on remediation that ECMC won’t even acknowledge.”
KPK argued that it had taken significant action to remove imminent threats: reporting spills upon discovery, excavating contaminated soils, repairing thousands of feet of flowlines and pressure testing facilities.
The issues remaining, they said, were “Tier 1”—paperwork and procedural—not environmental threats.
Attorney Chris McGowne pressed this point during closing:
“Applicants and staff want to talk about speculative risk and cumulative impact. But this isn’t how Rule 211 is supposed to work. The rule isn’t about punishing reputations. It’s about removing present-day harm. And nobody—not one witness—identified ongoing, site-specific threat to the public here.”
Two blowouts, two playbooks
Just hours before commissioners ruled on the KPK case, they convened for another hearing—this one involving Chevron. In April 2025, a Chevron subsidiary lost control of a well, triggering a blowout that displaced Weld County residents, injured a worker and released hydrocarbon mist into the surrounding area. ECMC called the incident “unprecedented.”
“As one commissioner and one employee of ECMC for the last six and a half years, I can say with certainty that this is significant and unprecedented,” said Chair Jeff Robbins. “I am extremely confident in our team’s expertise to oversee Chevron’s remediation efforts.”
Chevron received no shutdown order. Instead, ECMC issued a Notice of Alleged Violation nearly three months later, framed Chevron’s root cause analysis as reliable and emphasized collaboration. “We do not dispute its findings,” said Deputy Director Greg Deranleau. “We believe this is what happened at the well site.”
The contrast with KPK’s experience was not lost on its attorneys. KPK submitted its own engineering rebuttals and remediation documentation—only to have staff and commissioners dismiss the operator’s credibility and intent.
At the Chevron site, ECMC supported parcel-by-parcel Form 27 closures and praised the state’s role in providing contract support. “Each Form 27 can be closed and receive a ‘no further action’ determination independently,” said ECMC environmental supervisor Kyle Waggoner.
That kind of flexibility was never offered to KPK. What ECMC offered Chevron was discretion. What KPK got was distrust.
Used, useful or misunderstood? Kauffman says Lencioni got the economics wrong
When it came time to defend the economics of K.P. Kauffman Company’s (KPK) aging wells, the company didn’t rely solely on consultants. It put its chief operator on the stand, Jeffrey Kauffman.
His biggest disagreement was with how municipal consultant Letha Lencioni evaluated whether the wells were still “used or useful”—a phrase that, in this case, ties directly to whether KPK should be forced to plug and abandon them. Lencioni, hired by the cities, argued the wells weren’t producing enough oil or gas to justify their cost.
Kauffman said her math was off from the start.
“She didn’t reach out to us… some of the costs she said weren’t included actually are,” Kauffman said. He explained that Lencioni tried to “put back in” various expenses—like pipeline repairs and weed control—that were already in KPK’s records. “That number, the $379 per well per month, includes pumping, weed control, MITs, well repair, flowline repair… it’s all in the five years of data.”
That number—$379—is what Kauffman said it costs, on average, to operate one of the contested wells each month. It’s a figure known in the oil industry as “LOE,” or lease operating expense. It includes everything from electricity to pump jacks to the person who drives out to monitor the well.
But Kauffman argued that even that number might be too high. He said Lencioni included overhead expenses that don’t change whether a well is producing or not. “You’re going to have a pumper either way,” he told commissioners. “Plugging the well doesn’t eliminate that cost.”
Instead, he said, what matters are direct, recurring costs—the unavoidable bills tied to a well’s actual production. In Kauffman’s view, so long as a well produces more revenue than its daily operating cost, it should keep running. That income, he added, can go a long way toward paying for things like remediation or eventual abandonment.
“Remediation costs exist whether or not we plug the wells,” he said. “That liability is already there.” He added, “Plugging the well doesn’t erase it.”
Kauffman also challenged the bigger picture logic. For three years, many of the subject wells have been shut in due to regulatory orders, not mechanical failure. “We haven’t been allowed to operate them for the last three years,” he said. “Looking at that data isn’t fair.”
Even if a well only brings in a few thousand dollars a year, Kauffman argued it still serves a purpose. “Every dollar of cash flow from a well is a dollar to help fund that liability,” he said.
Kauffman also pointed out in his testimony, Lencioni’s economic model failed to account for the scale, efficiency and long-term recovery potential of the Spindle Field. “Spindle had 700 million barrels of original oil in place,” Kauffman testified. “We produced about 59.5 million barrels… that leaves another 10 to 17 million barrels in primary recovery—and another 40 to 60 million barrels from secondary and tertiary recovery.” He added that Amoco and Basin had already demonstrated successful waterfloods and gas floods in the field.
Old maps and company records back it up—KPK’s acreage sits on the western flank of the Sussex–Shannon formation, what locals once called the Boulder Field as far back as 1903. Despite more than a century of development, just 5.5 percent of the total oil in place has been recovered. Kauffman emphasized that many of their 750 wells still have 20 to 80 years of life left, and a refrac program in the mid-2000s proved that reworking wells could yield strong returns.
He argued those reserves—combined with KPK’s full ownership and in-house operations—keep costs low and make the field economically viable for decades. “The useful standard doesn’t fit this case,” he said.
At the June 18 hearing, Kauffman warned that forcing KPK to plug the wells would mean walking away from more than just steel and soil. “These wells are good wells,” he said. “They have a lot more to give.”
The exhibit shuffle: KPK attorneys say Lencioni’s slides crossed the line
KPK didn’t just challenge the numbers in Lencioni’s economic analysis—they questioned how much of it even belonged in the hearing.
At the May 29 proceeding, attorney Nick Swartzendruber pointed out, that while the cities had submitted their “demonstrative exhibits” to the Commission the day before, they never sent them to KPK–violating rules of discovery that require service on opposing counsel. Demonstrative exhibits aren’t new evidence—they’re visual aids meant to help explain what’s already in the record.
KPK’s legal team first saw the demonstrative exhibits when they appeared at the hearing. As they worked to get up to speed on the contents, they noticed that while the cities had labeled the materials as “demonstrative exhibits,” much of the content didn’t fit that definition. The slides contained excerpts from exhibits with added narrative and annotations, and even portions of documents that had not been disclosed ahead of time. Had this been overlooked, the case would have proceeded with those materials treated as if they’d been properly admitted into evidence. Commissioners did not address the issue before testimony began, and the hearing moved forward as though the slides had cleared the normal evidentiary process.
Swartzendruber called out the 300-plus pages of “demonstrative exhibits” the cities showed up with. “From our perspective they are complete written testimony… not summaries,” he said. “There are exhibits that have new annotations that we haven’t seen… modified to include additional information that were not in the original exhibits.”
Swartzendruber warned that some of the exhibits included selectively cropped or edited material that hadn’t been admitted into evidence. “We do have a problem with that,” he said. “We’d like the opportunity to present objections on the specifics of these demonstrative exhibits.”
Attorney Chris McGowne took it further. “What they’re attempting to do, in our opinion, is short-circuit their time constraint,” he said. “They put a whole bunch of information in that they hope the Commission will view as fact” McGowne added that if the cities wanted those materials included, “they should have presented it in a fashion that takes up their time.”
Even Commission Chair Jeff Robbins showed concern. “I’m hearing from KPK’s attorneys that they do not feel they’re in an adequate place to be able to do that,” Robbins said, referring to the timing of the slides. “I want to get this right. I don’t want to get this hurried.”
The closing pitch
In its final presentation, KPK walked commissioners through a photo-heavy slide deck showing site-by-site cleanup efforts, water sampling, new fencing, equipment upgrades and pressure testing. It also included data on well production, surface restoration and ECMC-approved work plans.
“We’re not exaggerating when we say we’re being bled out,” stated Kevin Kauffman, the company’s founder–behind the scenes as the hearings progressed. “We just burned through another three weeks of prep and several hundred thousand dollars in legal fees.”
The company estimated it had also spent millions on remediation at sites flagged by the cities—often digging up and restoring land that had already been certified clean by ECMC staff.
Disproportionate scrutiny in a rigged process
KPK’s critics describe a company with no regard for rules or risk—one that treats Colorado’s land and water like expendable assets. But the data tells a different story.
According to an independent analysis submitted as evidence in a federal case brought forward by KPK this spring, the company’s compliance record places it on the low end of spill incidents and response time when compared to other major Colorado operators like Chevron, Occidental and Civitas. Between 2020 and 2022, KPK had a spill-to-well ratio of roughly 9 percent. Its competitors ranged from 12 to 21 percent.
Ramboll Report, p. 3 (Figure 1). KPK submitted the fewest Form 19s in the group—supporting claims that its volume of spills and incidents was lower than other major operators.
“KPK still had fewer facilities with repeat spill incidents,” the report found, “and resolves their open Form 19s within a timely manner.” When there’s a problem at a well site, companies have to file a Form 19 to alert state regulators and explain what happened.
Ramboll Report, p. 3 (Figure 2). KPK had one of the lowest ratios of reported spill incidents per well—undercutting claims that it posed an outsized environmental risk.
Where the differences really show up is in how KPK was treated by the state—specifically in the volume of Conditions of Approval (COAs) they were forced to accept. A COA is a state-imposed requirement that operators must meet to move forward with a project.
One analysis showed KPK was issued 4.9 COAs for every Form 19 submitted—a rate up to eight times higher than other operators.
Ramboll Report, p. 5 (Figure 5). KPK received nearly five Conditions of Approval for every Form 19 submitted—up to eight times more than its industry peers.
In another, the company’s Form 27 submissions were denied 61 times—as much as 13 times more than any peer in the study. A Form 27 is what oil and gas operators file to get state approval before they start plugging a well or doing site cleanup.
Ramboll Report, p. 9 (Figure 11). Over a three-year span, KPK had 61 Form 27 submissions denied–far surpassing every other operator in the study.
The disparities didn’t stop there.
KPK was also required to collect more media samples per project, submit more documentation and still had a lower rate of missed deadlines than most operators in the same timeframe.
Ramboll Report, p. 9 (Figure 10). KPK had fewer late Form 27 reports than all but one peer, despite receiving more denials.
The vote
In the end, the commission issued a split ruling. It declined to order plugging of all 45 wells but granted partial relief to the cities, requiring plugging and abandonment on three wells, UPRR 43 PanAm I-25, Milton Nelson F1 and Thomas Russell D2. It also referred several wells back to ECMC for further investigation.
The decision was both a warning and a green light. For local governments looking to fast-track development, Rule 211 had become a new tool. For operators, the message was clear: past compliance is no protection against future reinterpretation.
“While KPK as an operator is negligent and does a poor job,” Robbins said in closing, “I do not find that the burden of proof was met.”
KPK has already taken the Commission to court. But the damage—financial, operational and reputational—is done.
Don’t stop here. The Rule 211 battle was just one chapter in a series of clashes still unfolding.
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