By STEVE ALLERTON
Orphaned oil and gas wells are a public health and environmental crisis; let’s make sure we fix the problem now and for future generations
While the focus around the COVID-19 pandemic has rightfully been on the health impacts inflicted upon our families and our economy, we cannot overlook what is currently happening to our lands, air, and water. As every sector of our economy struggles with the reality of this crisis, many oil and gas companies have already declared bankruptcy, including Denver-based Whiting Petroleum, and a wave of new bankruptcies is expected. This reality has inspired actions — including by Colorado’s own Sen. Michael Bennet — to finally take steps toward fixing a broken system that allows many oil and gas companies to abandon their wells, leaving taxpayers to foot the bill for the mess they leave behind.
These orphaned wells no longer produce oil or gas, and the last owner has gone bankrupt or cannot be identified. When wells become orphaned, taxpayers have to pick up the cost of cleanup. These wells pose a serious risk to the environment and the health of surrounding communities. Decaying infrastructure can contaminate community drinking water and release the same amount of air pollution as 1.5 million cars. The work required to plug these wells and reclaim the land around them is also difficult, time consuming, and expensive. Communities in the Colorado River valley and near Canyons of the Ancients National Monument have seen firsthand the effects these wells can have on human health if they are not cleaned up — not to mention the disruption of wildlife habitat.
Reclamation bonds, the money that companies put down before they drill to cover cleanup costs, are supposed to provide a safety net. Unfortunately, the bonding rates for wells on federal public lands have not been updated in over half a century, even though wells are now more costly to reclaim because of increasing well depths and expanding infrastructure. For example, since 1997, wells have almost doubled in depth, and according to the Government Accountability Office, average reclamation costs can range from $20,000 to $145,000 per well. This means that although the total reclamation costs for wells operating on public lands could exceed $6.1 billion, oil and gas companies have posted bonds that would only cover about 3% of those costs.
Recently, Western Colorado Alliance and our allies in Colorado have raised the alarm that the state will not have the resources to clean up orphaned wells. At the national level, calls have grown for reform, including a forum by the House Natural Resources Committee where state representatives urged Congress to increase funding for cleanup because states cannot do this critical work by themselves. While this funding would be a major help in addressing our current crisis, it does nothing to ensure we would not face a similar problem in the future. At that forum, Adrienne Sandoval, director of the New Mexico Oil Conservation Division, urged Congress to “increase their bonds to levels that are representative of today’s numbers.”
Luckily, Sen. Bennet listened to those calls and recently introduced legislation to both create a fund to clean up wells and increase bonding rates. This crucial legislation tackles this crisis from both sides — dealing with the pressing issue of a growing number of orphaned wells while reforming the system so we do not end up in yet another orphaned well crisis the next time there is an economic downturn.
We cannot put ourselves in this position again. With uncertainty across all sectors of our economy, the absolute last thing we need are more orphaned oil and gas wells. Sen. Bennet has taken action to provide funding to create jobs and clean up orphaned wells while addressing the root of the problem by reforming the federal bonding rates. His colleagues should support this effort and demand that the Interior Department — led by Secretary David Bernhardt — answer for this decades-old broken system.
Steve Allerton is the president of Western Colorado Alliance.