Updated Rules significantly reduce, but don’t eliminate future risk of orphaned oil & gas wells

Today, members of the Colorado Oil and Gas Conservation Commission (COGCC) voted to overhaul the state’s rules governing oil and gas bonding and plugging and abandonment of wells for the first time in more than 20 years. The votes came after months of hearings and deliberations — and nearly three years after Colorado passed a landmark law that put public health and safety ahead of oil and gas industry profits.

The Commission’s vote today ushers in important changes that govern the oil and gas industry in Colorado. These changes will:

• Require the oil and gas industry to either clean-up or fund the clean-up of an estimated 10,000 low-producing, inactive, and orphaned wells over the next 8 years — a full 20 percent of all wells in the state and more than 50 percent of all low-producing, high-risk wells. This change alone will have massive climate and environmental benefits. 
• Require full financial assurance for the majority of the lowest-producing and highest-risk wells and operators. This update will close loopholes that industry exploits to avoid cleaning up messes they make in pursuit of profits. 
• Require full financial assurance for any high-risk well that is transferred from one operator to another, eliminating another tactic the oil and gas industry uses to avoid the cost of cleaning up their own messes.
• Apply state financial assurance rules to federal lands throughout Colorado. One quarter of oil and gas wells in Colorado exist on public lands where they were previously unaccounted for in state bonding rules. 
• Provide six options for operators to meet their financial assurance obligations. One option provides operators an opportunity to negotiate their obligations. This rightfully concerns community groups, who fear that industry could scheme their way out of meeting obligations necessary to clean up their wells. 

These improvements are not perfect, but they are an important step toward ensuring that health and safety always come before oil and gas industry profits. Industry’s long-standing influence will take time to unravel — and that’s what advocates will continue to do by fighting to ensure these new rules are properly implemented and that leaders develop the next set of reforms and policy changes, such as reclamation standards. More COGCC staff and resources are necessary to properly enforce the new rules and closely monitor the financial health of approximately 300 oil and gas operators in the state. 

Conservation groups released the following statements in response: 

“Senate Bill 19-181 has required the COGCC to establish rules that are broadly protective of health, safety, and our environment. While the financial assurances created under this commission do offer a step in the right direction, we must continue to be mindful of the need to be transparent in their enforcement. We cannot allow operators to push for lenient interpretation of these regulations at the cost of the public’s welfare and tax dollars.”

• Leslie Robinson, Chairwoman, Grand Valley Citizens Alliance

“The wells that irresponsible operators like Fram have left behind are an affront to both public health and taxpayers. Though oil and gas executives clearly influenced the results of this rulemaking, Coloradans now have more protection from operators that put profits before people. Now it is up to the COGCC to ensure both the letter and the spirit of these rules are properly adhered to.”

• Don Lumbardy, member, Western Colorado Alliance

“For too long, the oil and gas industry dumped their responsibility for low-producing wells onto the people of Colorado, and our health, safety, and environment paid the price. Taxpayers shouldn’t have to clean up big polluters’ messes. By requiring industry to pay for and plug 10,000 high-risk wells and so many others that dot our landscape, the COGCC moved one step closer to ensuring that Coloradans’ health and safety always comes before oil and gas industry profits.”

• Kelly Nordini, CEO, Conservation Colorado