Oil and Gas Production Fee Guidance

Different state agencies regulate different industries. In some cases, different agencies regulate different components of the same industry! Our team of experts at ECMC coordinates regularly with colleagues across all agencies.  

That's the case with Senate Bill 24-230, which requires the coordination of a lot of different state agencies. Governor Polis signed Senate Bill 24-230 into law in May 2024. SB 24-230 requires the Clean Transit Enterprise and the Division of Parks and Wildlife to set and impose production fees to be paid by oil and gas producers for the benefit of clean transit and wildlife and land remediation, respectively. 

The Enterprise and Division are expected to set production fee amounts within statutorily defined fee ranges based upon average oil and gas spot prices each quarter. The fees will apply to oil and gas production beginning on July 1, 2025. On a quarterly basis, every producer of oil and gas in the State of Colorado will file a return and pay the set production fees to the Department of Revenue. The State Treasurer will disburse the fees in accordance with the requirements of SB 24-230.  

The Enterprise and the Division set and impose the production fees. To be clear, neither Department of Revenue nor ECMC have fee-setting authority. The Department of Revenue is responsible for collecting the fees once they are set.

ECMC's role is to develop and publish certain information to support the Enterprise and Division in setting the production fees. ECMC does not make recommendations. Specifically, ECMC must: 1) calculate the average natural gas spot price and average oil spot price for the previous quarter and post the spot prices on the Commission’s website; and 2) routinely publish guidance to the Enterprise and Division on certain factors relevant to setting the production fee amounts. 

Average Spot Prices for Oil 

To be posted no later than 10/7/2025.

Average Spot Prices for Gas 

To be posted no later than 10/7/2025.