Guest opinion: COGCC should hold the oil and gas operators accountable
In Colorado, funding oil & gas industry orphan wells deserves another look
As a former Garfield County Commissioner and Commissioner on the Colorado Oil and Gas Conservation Commission (COGCC) I know how critical it is to address existing and anticipated orphan wells in our state. I support the efforts made by the COGCC to bring this issue to the forefront. I also appreciate Colorado elected officials and the COGCC’s attention given to locating, cementing, and reclaiming wells that have been abandoned by oil and gas companies (orphan wells) around Colorado. The recent news of Extraction Oil and Gas filing for bankruptcy, coupled with the decrease in demand for fossil fuels and drop in values is not only resulting in the loss of state and local tax revenue. It also represents a serious cause for concern over the potential for an increase in orphaned wells during this economic downturn. Colorado’s current method for funding this mitigation program is not sustainable.
The debate about how to fund the plugging and reclamation of orphan wells has been ongoing. But why is it important to locate and remediate these abandoned wells? Those of us that have worked around this industry know that orphaned wells can leak pollutants, including methane gas, which has contaminated groundwater and even triggered explosions. For example, in 2007 an orphan well caused a home explosion in Trinidad, injuring three people and in 2005 a trailer in La Plata county exploded after methane gas leaked from an orphan well. (COGCC, Denver Post).
In 2018, through an executive order, Gov. John Hickenlooper addressed the issue of the locating, cementing, remediating and reclaiming orphaned oil and gas wells, establishing a five-year deadline to “fully conduct plugging, remediation and reclamation of all medium and high priority orphaned wells and orphaned sights” (Executive Order D 2018-12). Currently this state program is financed through a five-year, $5 million annual budget, funded with taxes generated by oil and gas development. According to COGCC reports, the cost of reclaiming one well costs in excess of $80,000. Two hundred seventy-five identified and reported orphan wells exist across Colorado, with a COGCC projection of over 400 undisclosed orphan well sites. This budget does not appear to have anticipated an economic downturn and could not have anticipated the COVID-19 pandemic and its impact on our economy; an economic climate that undoubtedly will increase the number of orphaned wells. Thus, my belief that the established method for funding is not sustainable. Further, oil and gas companies should pay their way, if they cannot afford to mitigate and reclaim their wells and ancillary facilities, then they should not be allowed to drill in Colorado.
What can and should we do to address this issue? SB19-181, passed by the state legislature last year, allows changes to the industry’s financial obligations to the state and taxpayers, as a portion of the new COGCC rulemaking, it is my understanding, that this rulemaking will commence in September when a new commission is seated.
I urge the COGCC to hold the oil and gas operators accountable for impacts sustained through oil and gas development, the financial assessment tools that you have, include the establishment of permit fees, increase bond levels to cover the abandonment of wells and other unforeseeable reclamation costs and the increase of the Conservation mill levy fee to the maximum amount established; to 1&7/10ths mills. Without adequate resources to mitigate orphan wells, the health of Colorado is at risk, including our environment and wildlife.
I strongly believe that the most productive time to conduct thoughtful rulemaking is during a downturn in oil and gas development. Such a time allows the COGCC and all other parties to focus on what needs to be initiated in order to create rules that truly protect the Health, Safety and Welfare of the people of Colorado, along with the Environment and Wildlife, as it relates to oil and gas development. Thank you to the COGCC for your service, your charge is critically important to the future of Colorado. I am grateful to the Environmental Community for raising this important issue.
We live in one of the most beautiful places in the world, let us all work together to leave a legacy that will allow future generations to enjoy clean air and water, the diverse beauty of Colorado and a strong economy.
Tresi Houpt is a former Garfield County commissioner as well as a former Colorado Oil and Gas commissioner. She lives in Glenwood Springs.
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