Colorado’s costs to plug abandoned oil and gas wells shifting from taxpayers to companies

DENVER — The deadly explosion in Firestone a few years ago is a tragedy Colorado never wants to relive. Two men died because of an old, leaky gas line left uncapped by the company after the well stopped producing.

Last year, Colorado passed new rules for the oil and gas industry known as financial assurance. Before companies can drill new wells, they need to give the state money upfront to cover more of the costs of capping and cleaning up old oil and gas wells that aren’t producing anymore, including wells abandoned by their owners.

“The new rules are definitely a step in the right direction,” said Heidi Leathwood, a climate policy analyst for 350 Colorado, a grassroots group organizing to solve the climate crisis. “All of those uncapped wells are contributing to that ozone problem that we have with the smog and the toxic pollutants that affect communities,” she said.

Colorado’s top agency in charge of regulating the oil and gas industry, the Energy and Carbon Management Commission or ECMC, says the financial assurance rules are the “strongest in the nation.”

The new rules could help protect Coloradans’ health, safety and the state’s natural beauty, without taxpayers having to foot the bill, Leathwood said.

“It’s supposed to put aside enough money for well-plugging so that the taxpayers don’t have to bear the brunt of it,” she said.

But she worries the money collected from companies will fall short of what the state needs.

Right now, there are more than 1,500 well locations considered “orphaned” by operators who walked away from their responsibilities to plug and reclaim their wells and well sites.

On federal and tribal land in the state, there are another 125 orphaned well sites.

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