DISTRICT COURT, LARIMER COUNTY,

COLORADO

201 La Porte Ave

Ft. Collins, CO 80521

AIR POLLUTION CONTROL DIVISION of the

COLORADO DEPARTMENT OF PUBLIC
HEALTH AND ENVIRONMENT,

Plaintiff,

v.

PROSPECT ENERGY, LLC, a Limited Liability

Company; and WILLIAM WARD GILTNER,
individually,

Defendants. ▲COURT USE ONLY▲

Attorneys for Plaintiff:

PHIL WEISER, Attorney General Case No. __________
MARY EMILY SPLITEK, #46619*
Senior Assistant Attorney General
WILLIAM MARSHALL, #48010* Div: Ctrm:
Assistant Attorney General
Ralph L. Carr Colorado Judicial Center
1300 Broadway, 7th Floor
Denver, CO 80203
Telephone: 720-508-6453 (Splitek)
720-508-6300 (Marshall)
E-Mail: emily.splitek@coag.gov
william.marshall@coag.gov
*Counsel of Record

COMPLAINT

COMES NOW the Air Pollution Control Division of the Colorado Department
of Public Health and Environment (the “Division”), by and through the Office of the
Colorado Attorney General, and for its Complaint pursuant to sections 25-7-101 to -
1309, C.R.S., states the following:
 I. INTRODUCTION

1. The Division comes before the Court to compel Defendants, Prospect Energy,
LLC (“Prospect”), and William Ward Giltner (“Giltner”) (collectively,
“Defendants”) to comply with the Compliance Order on Consent, Case Nos.
2021-119, 2022-020, 2022-073, and 2022-155; AIRS Nos. 069-0173, and 069-
0180 (“Consent Order”) attached as Exhibit 1.

2. The Consent Order was entered into by the Division and Prospect on
February 15, 2024.

3. The Consent Order was issued by the Division pursuant to its authority
under section 25-7-115(3)(b), C.R.S., of the Colorado Air Pollution Prevention
and Control Act, sections 25-7-101 to -1309, C.R.S. (“the Act”). The Division
enforces the Act and its implementing regulations, 5 C.C.R. section 1001, et
seq. (“the Regulations”).

4. Prospect owns and operates two oil and gas well production facilities
(“Facilities”) in Larimer County, Colorado: the Krause Tank Battery (“Krause
Facility”) and the Fort Collins Tank Battery (“Fort Collins Facility”). Both
Facilities operate pursuant to permits issued by the Division under the Act
and the Regulations.

5. The Consent Order resolved violations of the Act, as determined by the

Division, at the Facilities, which violations occurred in 2021 and 2022. The
Consent Order contains the Division’s general findings of fact and conclusions
of law, which the Division incorporates into this Complaint by reference.
Consent Order ¶¶ 3-18.

6. The Consent Order is a final agency action and a final order of the Division.

7. Prospect agreed to the terms and conditions of the Consent Order. Prospect
further agreed that it would not challenge the Consent Order’s terms and
conditions in any administrative proceeding or judicial forum.

8. Defendant Giltner signed the Consent Order on Prospect’s behalf as its

Manager.

9. Defendant Giltner had the authority to enter into the Consent Order on
behalf of Prospect. Defendant Giltner did, in fact, cause Prospect to enter into
the Consent Order.
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10. At all times relevant to this action, the Consent Order has been in effect. It
has not been subject to a stay pending administrative or judicial review.

11. Defendants have violated, and continue to violate, the Consent Order, the
Act, and the Regulations.

12. The Division therefore seeks injunctive relief requiring Defendants to remedy
these violations. The Division also seeks additional civil penalties for each
day that Defendants have violated the Consent Order, the Act, and the
Regulations.

II. JURISDICTION AND VENUE

13. The Division is authorized to bring a suit for injunctive relief against any
person who fails to comply with a final order of the Division or with any
provision of the Act and the Regulations. § 25-7-121, C.R.S.

14. The Division is authorized to bring a suit for recovery of any unpaid civil
penalties, plus interest. § 25-7-123.1, C.R.S.

15. The Division is authorized to bring a suit seeking additional civil penalties
against any person who violates a final order of the Division. § 25-7-122(1)(b),
C.R.S.

16. This court has jurisdiction over the claims set forth herein pursuant to
Article VI, section 9, of the Colorado Constitution.

17. Venue is proper in the Larimer County District Court pursuant to section 25-
7-115(3)(b), C.R.S. and C.R.C.P. 98(c).

III. PARTIES

18. Plaintiff, the Division, is a Colorado state agency within the Colorado
Department of Public Health and Environment. The Division is vested with
responsibility for enforcing the Act and the Regulations.

19. Defendant Prospect is the owner and operator of the Facilities.

20. Prospect is a “person” as that term is defined in section 25-7-103(19), C.R.S.

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21. At all times relevant to the claims alleged below, Prospect was, and currently
remains, a limited liability company registered and authorized by the
Colorado Secretary of State to conduct business in the State of Colorado
(Colorado Secretary of State ID No. 20091269402). The principal address for
Prospect is listed as 1036 Country Club Estates Drive, Castle Rock, Colorado,
80108.

22. Defendant Giltner, also known as Ward Giltner, is the Manager of Prospect
and formed the company in 2009 according to Colorado Secretary of State
Records. Upon information and belief, Defendant Giltner resides at 1036
Country Club Estates Drive, Castle Rock, Colorado, 80108.

23. Defendant Giltner is a “person” as that term is defined in section 25-7-

103(19), C.R.S.

24. Defendant Giltner is the registered agent for Prospect. According to Secretary
of State records, the registered agent’s mailing address is 1036 Country Club
Estates Drive, Castle Rock, Colorado, 80108.

25. Defendant Giltner engaged in extensive negotiation with the Division

spanning multiple years on behalf of Prospect with respect to the Consent
Order. Defendant Giltner caused Prospect to enter into the Consent Order in
his capacity as Prospect’s Manager. Consent Order at 27. The Consent Order
specifies that Defendant Giltner is the primary contact for Prospect for all
required communications. Consent Order, ¶ 66.

26. Currently, and at all times relevant to the claims alleged below, as Manager
of Prospect, Defendant Giltner has the responsibility and authority to and
ensure Prospect’s compliance with the Act at the Facilities and the terms of
the Consent Order. Defendant Giltner is a responsible corporate officer of
Prospect.

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 IV. ALLEGATIONS

A. Prospect Owns and Operates Oil and Gas Well Production Facilities
Where Air Quality-Related Violations Occurred.

27. On November 15, 2021, the Division’s Inspector, Craig Giesecke (“Inspector
Giesecke”), conducted an inspection at the Krause Facility for the purpose of
determining compliance with the permit requirements, the Act, and the
Regulations. Based on the inspection, and a review of records related to the
Krause Facility, the Division issued an Immediate Notice of Violation to
Prospect on December 6, 2021.

28. On January 28, 2022 and February 8, 2022, Inspector Giesecke conducted an
inspection at the Krause Facility for the purpose of determining compliance
with permit requirements, the Act, and the Regulations. Based on the
inspection, and a review of records related to the Krause Facility, the
Division issued a Compliance Advisory to Prospect on March 2, 2022.

29. On April 5, 2022, the Division and Prospect met via teleconference to discuss
the issues identified in the Immediate Notice of Violation and Compliance
Advisory issued for the Krause Facility. Defendant Giltner attended this
teleconference.

30. On April 8, 2022, Inspector Giesecke conducted an inspection at the Fort

Collins Facility for the purpose of determining compliance with permit
requirements, the Act, and the Regulations. Based on the inspection, and a
review of records related to the Fort Collins Facility, the Division issued an
Immediate Notice of Violation to Prospect on May 3, 2022.

31. On April 21, 2022, Sydney McLeod, of the Larimer County Division of Health
and Environment, a duly delegated representative of the Division, conducted
an inspection at the Fort Collins Facility for the purpose of determining
compliance with permit requirements, the Act, and the Regulations. Based on
the inspection, and a review of records related to the Fort Collins Facility, the
Larimer County Division of Health and Environment issued a Compliance
Advisory to Prospect on August 9, 2022.

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32. On August 24, 2022, the Division issued a Cease and Desist Order to
Prospect ordering Prospect to temporarily discontinue any and all activities
at the Krause Facility that emit or had the potential to emit air pollutants
until Prospect could demonstrate to the Division the Krause Facility’s full
compliance with the Regulations. On August 25, 2022, Prospect temporarily
ceased operating the Krause Facility.

33. On September 14, 2022, the Division and Prospect met via teleconference to
discuss the issues identified in the Immediate Notice of Violation and
Compliance Advisory issued for the Fort Collins Facility as well as the
conditions of the Cease and Desist Order for the Krause Facility. Defendant
Giltner attended this teleconference.

34. On November 28, 2022, the Division terminated the Cease and Desist Order
for the Krause Facility. On December 1, 2022, Prospect resumed operation of
the Krause Facility.

B. The Parties Resolved All Alleged Violations Through a Mutually

Executed Compliance Order on Consent.

35. From December 2021 to February 2024, the Division and Prospect negotiated
resolution of the alleged violations at the Facilities.

36. At all times during the negotiation, the Division and Prospect were
represented by counsel.

37. Defendant Giltner was the primary point of contact and lead in negotiations
on behalf of Prospect.

38. Upon reaching an agreement on all terms, the Division and Prospect entered
into the Consent Order on February 15, 2024, at which time the Consent
Order became effective.

39. In the Consent Order, the Division made the following findings and
determinations regarding violations at the Facilities:

a. Prospect failed to file an Air Pollutant Emission Notice (“APEN”) for

the produced water tanks at both Facilities. Consent Order, ¶¶ 17(a),
17(i).

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 b. Prospect failed to submit revised APENs when APENs for both
Facilities expired. Consent Order, ¶¶ 17(b), 17(j).

c. Prospect failed to obtain valid construction permits for the produced

water tanks at both Facilities. Consent Order, ¶¶ 17(c), 17(k).

d. Prospect failed to minimize leakage of volatile organic compounds to

the atmosphere to the maximum extent practicable at both Facilities.
Consent Order, ¶¶ 17(d), 17(l)(i)-(ii).

e. Prospect failed to route all hydrocarbon emissions to air pollution

control equipment and operate without venting hydrocarbon emissions
at both Facilities. Consent Order, ¶¶ 17(e), 17(n).

f. Prospect failed to inspect components at both Facilities for leaks using

an approved instrument monitoring method and in accordance with
required inspection frequencies. Consent Order, ¶¶ 17(f), 17(o).

g. Prospect failed to limit emissions of odorous air contaminants at the

Krause Facility. Consent Order, ¶ 17(g).

h. Prospect failed to mark emissions points at both Facilities with

applicable permit numbers and ten-digit AIRS ID numbers. Consent
Order, ¶¶ 17(h), 17(p).

i. Prospect failed to ensure that a combustion device at the Fort Collins

Facility had no visible emissions. Consent Order, ¶ 17(m).

j. Prospect failed to accurately calculate emissions and provide the

Division with an accurate emissions compliance record for the Fort
Collins Facility. Consent Order, ¶ 17(q).

40. Paragraphs 21 through 41 of the Consent Order include extensive compliance

requirements to address the violations found by the Division.

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41. The Consent Order also requires Prospect to pay an administrative penalty of
$337,050.00 over four (4) installments.

a. Prospect must pay thirty thousand dollars ($30,000)

within 30 days of the effective date of the Consent Order
[on or before March 17, 2024].
b. Prospect must pay eighty thousand dollars ($80,000) on
or before June 30, 2024.
c. Prospect must pay one hundred ten thousand dollars
($110,000) on or before September 30, 2024.
d. Prospect must pay one hundred seventeen thousand fifty
dollars ($117,050) on or before December 31, 2024.

Consent Order ¶¶ 42-43.

42. The Consent Order also provides that, should:

Prospect fail to make any installment payment in accordance

with the payment schedule, the entire administrative
penalty, at the option of the Division, shall become due and
payable to the Division ten (10) days after the Division
notifies Prospect that the balance of the administrative
penalty is due.

Consent Order ¶ 46.

C. Prospect Has Violated the Consent Order.

43. On May 3, 2024, the Division issued a request for information pursuant to
section 25-7-111(2)(i), C.R.S., seeking information related to compliance with
the requirements of the Consent Order for the Krause Facility. The request
for information, attached as Exhibit 2, instructed Prospect to provide the
requested information no later than May 17, 2024.

44. Prospect did not respond to the Division’s request for information, nor did it
provide any of the requested information.

45. On June 25, 2024, the Division inspected both Facilities to determine
compliance with the Consent Order.

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46. Based on the June 25, 2024 inspections, and a review of Division records, on
July 15, 2024, the Division issued a Determination of Non-Compliance
pursuant to Paragraph 64 of the Consent Order. The Division’s
determination of non-compliance is attached as Exhibit 3. The Division
determined that Prospect had failed to comply with the following
requirements of the Consent Order:

a. Prospect has failed to comply with all requirements of the Act and
Regulations at the Facilities. Consent Order, ¶¶ 21, 36.

b. Prospect has not revised and submitted a Storage Tank Emission

Management (“STEM”) plan for the Krause Facility to incorporate a
predictive analysis for hydrogen sulfide emissions. Consent Order,
¶ 25.

c. Prospect has not installed an emissions monitoring and alter system at

the Krause Facility for the monitoring of hydrogen sulfide. Consent
Order, ¶¶ 26(i)-(iv).

d. Prospect has not conducted quarterly hydrogen sulfide concentration

sampling, beginning within thirty days of the effective date of the
Consent Order, at the Krause Facility. Consent Order, ¶¶ 27(i)-(iii).

e. Prospect has not installed high-performance thief hatches

manufactured in a manner so as to be resistant to corrosive
substances, including hydrogen sulfide, on all storage tanks at the
Krause Facility. Consent Order, ¶ 29.

f. Prospect has not conducted infrared camera inspections at the Krause

Facility at least every two weeks upon the effective date of the Consent
Order. Consent Order, ¶ 30.

g. Prospect has not submitted an application to convert the General

Construction Permits for the Krause Facility to a Construction Permit.
Consent Order, ¶ 31.

h. Prospect failed to maintain records of compliance with all

requirements of the Consent Order and make the records available to
the Division within 14 days of a request for records by failing to
respond to the Division’s May 3, 2024 request for information. Consent
Order, ¶¶ 31, 33, 39.
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 i. Prospect failed to pay an administrative penalty of $337,050, which
was due in full upon the Division’s written demand for full payment on
May 20, 2024 after Prospect failed to pay the first installment of
$30,000 within 30 days of the effective date of the Consent Order.
Consent Order, ¶¶ 42-46.

47. Prospect confirmed receipt of the Division’s Determination of Non-

Compliance via email on July 16, 2024.

48. Prospect did not respond to the Division’s Determination of Non-Compliance

within fifteen (15) calendar days of receipt of the Division’s determination.
Therefore, pursuant to Paragraph 64 of the Consent Order, Prospect is
deemed to have accepted the Division’s Determination of Non-Compliance.

49. Prospect also failed to pay the $30,000 administrative penalty payment that
was due March 17, 2024. Consent Order, ¶ 43(a).

50. Due to Prospect’s failure to pay the first installment of the penalty by March
17, 2024, the Division notified Prospect in writing on May 20, 2024 that the
entire administrative penalty was due pursuant to Paragraph 46 of the
Consent Order by May 30, 2024. The May 20, 2024 correspondence requiring
full payment is attached as Exhibit 4.

51. Prospect did not respond to the Division’s May 20, 2024 notification.

52. Prospect has not made any payments to the Division in satisfaction of the
$337,050 penalty.

D. Defendant William Ward Giltner is Personally Liable for Prospect’s

Failure to Comply with the Terms of the Consent Order as Prospect’s
Responsible Corporate Officer.

53. The responsible corporate officer doctrine may be applied to hold individual
corporate officers personally liable for violations of law facilitated by the
officer’s actions or inactions.

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54. By its terms, the Consent Order is binding on Prospect and its “corporate
subsidiaries or parents, [its] respective officers, directors, agents, attorneys,
employees, contractors, successors in interest, affiliates, and assigns.” Consent
Order, ¶ 72.

55. Defendant Giltner failed to exercise his responsibility and authority as a

responsible corporate officer to prevent violations of the Act at the Facilities
and to ensure compliance with the Consent Order.

56. As Manager of Prospect, Defendant Giltner was: (1) in a position to ensure

Prospect’s compliance with the Consent Order; (2) could have directed the
actions of Prospect to ensure compliance with the Consent Order; and (3) failed
to do so.

57. Defendant Giltner is Prospect’s responsible corporate officer and as such, he is

personally liable for Prospect’s failure to comply with the terms of the Consent
Order.

V. FIRST CLAIM FOR RELIEF

(Permanent Injunction to Comply with the Compliance Requirements of
the Consent Order)

58. The allegations of the paragraphs above are incorporated herein by reference.

59. The Act provides specific authority to the Division for injunctive relief in the
event any person fails to comply with a final order of the Division. § 25-7-
121(1) C.R.S.

60. Defendants are persons who have failed to comply with the Consent Order.

61. Prospect has waived any right to challenge the Compliance Requirements.
Consent Order, ¶ 47.

62. As outlined in the Division’s Determination of Non-Compliance, Prospect has

failed to comply with the requirements in Paragraphs 21, 25, 26(i)-(iv), 27(i)-
(iii), 29, 30, 31, 33, 39, and 42-46 (“Compliance Requirements”) of the Consent
Order.

63. Defendant Giltner failed to take action as Prospect’s Manager and

responsible corporate officer to ensure Prospect’s compliance with the
Compliance Requirements.
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64. Therefore, the Division seeks a permanent injunction requiring Defendants to
comply with the Compliance Requirements.

VI. SECOND CLAIM FOR RELIEF

(Permanent Injunction Requiring Full Payment of Administrative Penalty
Assessed in the Consent Order)

65. The allegations of the paragraphs above are incorporated herein.

66. The Division is authorized to bring a suit for recovery of any unpaid civil
penalties, plus interest. § 25-7-123.1, C.R.S.

67. Prospect agreed to pay a total administrative penalty of $337,050 in the

Consent Order. Consent Order, ¶ 42.

68. Prospect has waived any right to challenge the administrative penalty.
Consent Order, ¶ 47.

69. Prospect failed to pay the first installment of the administrative penalty—a
payment of $30,000—which was due to the Division on March 17, 2024.
Consent Order, ¶ 43(a).

70. The full administrative penalty of $337,050 became due and payable ten days
after the Division’s May 20, 2024 notification that the full administrative
payment was due given Prospect’s failure to make payments in accordance
with the agreed-upon installment schedule. Consent Order, ¶ 46.

71. Prospect failed to pay the full administrative penalty by May 30, 2024.

72. Defendant Giltner failed to take action as Prospect’s Manager and

responsible corporate officer to ensure Prospect’s compliance with the
requirement to pay the administrative penalty as agreed-upon in the Consent
Order.

73. Therefore, the Division seeks a permanent injunction requiring Defendants to

jointly and severally pay the full administrative penalty of $337,050, plus
interest.

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 VII. THIRD CLAIM FOR RELIEF
(Additional Civil Penalties)

74. The allegations of the paragraphs above are incorporated herein.

75. Any person who violates any requirement of a final order of the Division is
subject to an additional civil penalty of up to $55,554 per day, at the Court’s
discretion, for each day of the violation. § 25-7-122(1)(b), C.R.S.

76. Prospect has not complied the requirements of the Consent Order. Prospect
has been in violation of the Consent Order since at least February 29, 2024,
when it failed to conduct infrared camera inspections at the Krause Facility
within two weeks of the effective date of the Consent Order. Consent Order,
¶ 30.

77. Defendant Giltner failed to take action as Prospect’s Manager and

responsible corporate officer to ensure Prospect’s compliance with the terms
of the agreed-upon in the Consent Order.

78. Therefore, the Division seeks civil penalties against Defendants, jointly and
severally, for each violation and each day that they have failed to comply
with the Consent Order.

VIII. PRAYER FOR RELIEF

The Division respectfully requests this Court to:

1. Compel Defendants’ full compliance with the Consent Order.

2. Compel Defendants to jointly and severally pay the $337,050 administrative

penalty assessed in the Consent Order, plus interest at a rate of 8% per
annum, consistent with section 5-12-101, C.R.S.

3. Cease all operations at both Facilities until full compliance with the Consent
Order is achieved and the $337,050 administrative penalty, plus interest, has
been paid in full.

4. Compel Defendants to jointly and severally pay additional penalties for each
day they have failed to comply with the Consent Order, beginning on
February 29, 2024.

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5. Provide such other relief as the Court deems appropriate.

Respectfully submitted this 13th day of August, 2024.

PHIL WEISER
Attorney General

/s/ Mary Emily Splitek

MARY EMILY SPLITEK, #46619*
Senior Assistant Attorney General
WILLIAM MARSHALL, #48010*
Assistant Attorney General
Natural Resources and Environment
1300 Broadway, 7th Floor
Denver, CO 80203
Telephone: 720-508-6453 (Splitek)
720-508-6300 (Marshall)
E-Mail: emily.splitek@coag.gov
william.marshall@coag.gov

*Counsel of Record for Plaintiff, the Air

Pollution Control Division of the Colorado
Department of Public Health and the
Environment

Plaintiff’s Business Address:

300 Cherry Creek S. Dr.
Denver, CO 80246

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