By Conrad Swanson
The Denver Post
Colorado can expect tens of millions from the federal government to plug and restore hundreds of orphaned oil and gas wells out of the bipartisan infrastructure bill that Congress passed last year, government officials said.
In all, the infrastructure bill set aside $4.7 billion nationally to clean orphaned wells, and White House officials broke down how the first $1.15 billion would be spent during a news conference Tuesday.
So far, 26 states qualify for $25 million each and an additional allotment tailored for each state and calculated off the number of oil and gas jobs lost there, how many orphan wells likely remain and their estimated restoration costs, White House spokesperson Rykia Dorsey Craig said in a release. Colorado qualified for another $14 million, bringing its total allotment to $39 million.
“Never before has this country taken up a cleanup effort like this,” White House Infrastructure Coordinator and Senior Advisor Mitch Landrieu said during a news conference. “This is good for our health, good for our climate and good for our workers.”
Wells are orphaned after the companies that dug them walk away, sometimes after going bankrupt, without restoring the site. They can leak toxic and explosive gases into neighborhoods and leak pollutants into groundwater.
Colorado Oil and Gas Conservation Commission Director Julie Murphy said that the state has 625 orphaned wells, which would cost more than $47 million to plug, remediate and reclaim.
The commission is considering new regulations to ensure that companies in the industry have enough money to close and clean their wells. That work stems from an industry overhaul lawmakers passed in 2019 meant, in part, to ensure taxpayers wouldn’t be left with cleanup costs if companies abandon their wells.
Local governments and environmentalists say those reforms aren’t going according to plan, though. They point to a proposal that would allow companies to continue offering a “blanket bond” of $100,000 to cover all their wells statewide.
The commission has estimated that it costs an average of $82,500 to plug and reclaim a single well.
The incoming federal money is good news for Colorado, Beau Kiklis of Conservation Colorado, said.
“But let’s not be fooled: it’s also a stinging rebuke of an industry that’s amassed profits at the expense of our communities and by leaving taxpayers holding the bag,” Kiklis continued.
The move also represents a call to action, Kiklis, the organization’s public lands advocate, said. And the commission should more strongly hold oil and gas companies accountable through “robust” annual well fees, full-cost bonding for new, transferred and low-producing wells.
Aside from orphaned wells, Colorado has up to 19,000 wells producing less than the equivalent of two barrels of oil each day, according to Kate Oehl, a spokeswoman for U.S. Sen. Michael Bennet.
In a joint release with fellow U.S. Sen. John Hickenlooper, Bennet said in a release the incoming federal money will cut “harmful methane pollution, create good-paying jobs and economic opportunities, and restore wildlife habitat in Colorado.”
Hickenlooper celebrated the funding and called the abandoned sites a danger to Colorado’s communities and a hazard to the environment.