Colorado to request $25M in federal aid to help clean up its more than 1,200 orphan wells
The Department of Interior is handing out nearly $1.4 billion to states across the U.S. to help clean up abandoned oil and gas wells. Texas got the largest grant, at nearly $108 million.
Colorado is seeking $25 million from a federal fund to plug orphan oil and gas wells, state officials said, in what could be the first installment of millions in cleanup aid.
The money is part of the Biden administration’s infrastructure program, passed by Congress last November. A total of $1.4 billion in plugging and abandonment funds are being made available to 26 states in the initial round of grants.
Colorado was eligible for an additional $14 million in federal assistance, but accepting it would have required the state to designate projects within 90 days, and complete them within one year, which it couldn’t do.
The federal money comes as the Colorado Oil and Gas Conservation Commission (COGCC) is working to revise its rules to require oil and gas drillers provide financial assurance they can plug their wells and to increase state funds for plugging and abandoning sites with no solvent operator, so-called orphan wells.
Colorado has 411 orphan wells to plug and 811 orphan well sites to remediate, according to state data.
Those numbers are up 70% the past four months as the COGCC moved to shut down derelict operators and seize their wells and clean-up bonds
The Colorado numbers, however, may only represent a small eddy before a big wave, environmentalists say. An analysis of the 52,000 wells in Colorado done by a coalition of environmental groups, including Conservation Colorado, identified 2,917 wells likely to be abandoned.
This included 329 wells owned by companies that had zero oil and gas production in 2020 and 2,588 wells owned by operators whose wells average less than the equivalent of one barrel of oil a day – a level regulators and the industry say is uneconomical.