Hundreds of Colorado oil, gas and mining operators have not been reporting the full extent of their business operations to regulators, depriving the state of an unknown amount of tax revenue, according to a new audit released Tuesday.
The review by the Joint Legislative Audit Committee looked at two years of state records between 2016 and 2018 and found the Colorado Oil and Gas Conservation Commission and other state offices failed to collect some required oil and gas production and mining information, which the Colorado Department of Revenue uses to determine how much individual producers owe in severance taxes.
Severance taxes are meant to recoup a share of the state’s wealth that’s lost when nonrenewable natural resources like oil and coal are removed from the earth and sold for profit.
Of the 420 oil and gas operators that were actively producing in the audit’s two-year time frame, “316 submitted 1,209 incomplete monthly well reports and/or failed to submit as many as 50,055 required monthly well reports,” the audit found. In most cases, the COGCC did not try and contact the operator to ensure accurate information was submitted.
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