Guest opinion: The overdue need for tight O&G financial assurance rules
Members of the Grand Valley Citizens Alliance and the Battlement Concerned Citizens have spent two decades on the frontlines of oil and gas development in Garfield County. With 200-plus wells drilled within 1,000 feet of Battlement Mesa neighborhoods, we are at constant risk from the health, safety and environmental impacts of O&G development.
Years ago, we sat across the table from Matt Lepore, who was then the director of the Colorado Oil and Gas Conservation Commission, the state overseer of the industry. He told our members that the reason O&G pads could be drilled so close to homes was because the state O&G laws say it’s OK.
So our community worked to change those laws.
Our first foray into COGCC rulemaking addressed setbacks, because, at the time, pads could be built just 150 feet away from dwellings — a buffer of only 50 feet in case a 100-foot rig fell, burned or exploded. It took two decades, hundreds of hours of testimony, and thousands of constituents across the state to convince COGCC commissioners to move setbacks to 2,000 feet between pads, homes and schools.
The current “Financial Assurances” Rulemaking will determine how much O&G companies will have to put up as bonds to cover the costs of the end-of-life plugging, reclamation and abandonment of O&G pads.
We care about adequate bonding because the worst fear for Battlement Mesa residents came true: The company Ursa, which bought the natural gas leases from Antero Resources, who had purchased the mineral leases from Exxon, went bankrupt, leaving the future of hundreds of wells in Battlement Mesa and thousands of others in Rio Blanco and Garfield Counties in limbo.
Fortunately for Battlement residents and Colorado taxpayers, Ursa’s assets were sold to a local company, Terra Energy Partners, operating as TEP Rocky Mountain LLP, which is part of TEP; which bought the assets of WPX; which used to be owned by Williams Cos. As production levels drop, these assets could be sold several times more to companies with less funds to mitigate sites. Who ends up with the cleaning bill?
The thread of ownership and the financial responsibility to return well and pad sites to their natural state is the weak link that needs to be mended, and the laws governing bonding and mitigation should be the same statewide. It makes sense to our community that “if you drill it, you should pay to fix it.” Otherwise it’s left to the state to pursue the owner to pay for final remediation costs. And too often that owner has either abandoned the well or declared bankruptcy.
This is not an anti-O&G stance. It’s about wanting any industry to pay to clean up its messes without the bill being paid by us, the taxpayer.
Having better financial assurances regulations also puts a time frame on the eventual plugging at the outset before an O&G application is even approved. Every day that an abandoned well leaks and remains unplugged, and land is not remediated, the public suffers; health risks increase, health costs increase and the costs to plug, remediate and repair increase.
Garfield County has 12,000 previously drilled sites with only weak financial assurance rules in place, and it is estimated it will take at least $100,000 just to plug one abandoned well, let alone reclaim the whole site to its original natural state. That’s the cost of doing business; it’s not an expense that taxpayers should shoulder.
As with setbacks, our interest is to make sure COGCC commissioners hear from those who live in the frontlines like Battlement Mesa. We ask the COGCC to adopt financial assurance rules without loopholes or special favors to the O&G industry, acting on their primary responsibility to protect peoples’ quality of life and our environment.
Leslie Robinson chairs the Grand Valley Citizens Alliance.
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