Colorado's "orphaned" well backlog keeps growing, increasing costs, challenges

When Michael Hickey walks around an old oil well site, he’s prepared for the dangers. He wears fire retardant clothing, a hard hat and protective glasses. He fences off hazardous areas to keep others away. In five years of supervising Colorado’s Orphaned Well Program, he said, “we haven't had an accident yet.” But Colorado’s backlog of wells needing cleanup continues to grow, increasing the challenges and costs for the state.

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Here's who'll you'll hear from for this story:

• Colorado Orphaned Well Program Supervisor Michael Hickey, who leads the team responsible for cleaning up abandoned oil and gas wells in Colorado
• Former Colorado lawmaker Michael Foote, who said the state could do more to hold the industry accountable
• A family who filed a lawsuit against an oil and gas company which has since gone bankrupt, leaving an orphaned well behind

Our promise to you: Denver7 Investigates continues to cover the impact that so-called "orphan" oil and gas wells have on the environment, speaking to community members affected by potential hazards to public health and bringing those issues to stakeholders and elected officials to get answers to those concerns. The following is the latest in a series of stories by Denver7's Angelika Albaladejo .

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Denver7 Investigates met up with Hickey at one of the state’s “orphan” wells. These are older wells, totally depleted by their operators, who are then unable or unwilling to plug them. Often the operators declare bankruptcy “and leave them for us,” Hickey said.

Mike Erickson, Denver7

Right now, Colorado is in the process of cleaning up more than 900 orphan wells and roughly twice as many orphaned areas where drilling and production happened.

To uncover the potential threats posed by old, unplugged wells, Denver7 Investigates partnered with ABC News Investigates and local news stations across the country. This nationwide investigation, Zombie Wells: The Threat Beneath , tested a total of 76 wells across five states and found that more than half were leaking oil or combustible gas at the time.

Denver7 Investigates

Why hundreds of old oil wells could become Colorado's cleanup responsibility

Angelika Albaladejo

Denver7 Investigates went out to more than a dozen well locations in northern Colorado to check for leaks. We were equipped with a handheld gas detector and a safety device that monitors ambient air quality. These devices can detect hundreds of combustible gases, including climate-warming methane.

At orphan well locations already under Colorado’s care, we did not find any emissions detected by our monitors. But we found low-producing wells are more prone to problems , with risks to health and the environment. These old wells are expensive to maintain and plug, which puts some operators at high risk of soon deserting hundreds or thousands of wells into the state’s Orphaned Well Program.

Map courtesy of ABC News

To get a clearer picture of how Colorado is dealing with its orphan wells, and what might happen if the backlog grows quickly, Denver7 Investigates walked through the process with Orphaned Well Program Supervisor Hickey. We also visited an orphaned well in someone’s front yard, sat down with a former state lawmaker and dug through dozens of state records.

Orphaned wells have the potential to spill or leak, posing risks to health and the environment.

Hickey said “if you light a match where you shouldn't, bad things happen. If you drank it, you’d get sick. But if it's not disturbed, the health impacts are pretty minimal.”

Still, the closer these wells are to homes, schools and farmland, the higher the potential concern.

Erie

Erie neighborhood fears health risks as cleanup of oil well leak continues

Angelika Albaladejo

The well we visited with Hickey is in Brighton, just off a road connecting farms and communities. Hickey said the owner of a home just 600 feet away called up the Orphaned Well Program before he bought the land.

“I walked him through how to use the information that's available on our public website,” Hickey said. “He has been very cooperative.”

But the process of cleaning up an old wellsite is complex, time-consuming and expensive.

• Hear Angelika Albaladejo discuss the joint investigation with ABC News and her work visiting more than a dozen old oil well sites in Colorado, in the video player below:

Colorado’s cleanup is “more aggressive than most states,” Hickey said.

After an uncapped gas line leaked into a Firestone home in 2017, causing an explosion that killed two people , Colorado lawmakers created new requirements for operators and the state’s Orphaned Well Program to dig up and remove all flow lines connected to wells that are no longer operating.

“The first thing we typically do is come in and plug the well,” Hickey said. “Portland cement gets pumped down the inside of the pipe. It comes up the outside of the pipe and seals everything up.”

Colorado Orphaned Well Program

The orphaned well team checks for potential leaks from the wellhead, pipelines and tanks. Hickey said photo ion detectors make it easy to find soil contaminated by hydrogen or hydrocarbons.

But “the hardest part is the produced water,” he said. Water pumped into oil wells can come back up contaminated with potentially toxic substances like arsenic and radium, inorganic salts and cancer-causing chemicals.

“We have environmental consultants who monitor our work as we're doing it, and if they see something that looks suspicious, they'll take samples, and we will dig it out until we get to clean soil,” Hickey said.

Mike Erickson, Denver7 Investigates

The state estimates these cleanup costs at more than $100,000 per well.

“Last year, we plugged 99 wells. That was a record for us,” Hickey said, and it cost an all-time high of more than $10 million.

This year, the state broke that record again – plugging 132 wells at a cost of nearly $15 million.

Colorado’s oil and gas industry will cover some of those well cleanup costs through bonds, production taxes and penalties collected by the state following violations, as well as through a revamped “financial assurance” process meant to ensure operators are prepared to cover the future plugging of their wells.

Hickey said “the bonding that was required before was totally insufficient to remediate a site,” but his team “won't know the adequacy” of the new financial assurance bonds until they use them.

Currently, most of the orphaned well cleanup costs are covered by a new $25 million federal grant, as well as state programs, including a new Orphan Well Mitigation Enterprise cash fund, which requires operators to pay an annual fee for every well until it is properly plugged.

Follow Up

Colo. still figuring out how to hold oil, gas companies accountable for clean-up

Angelika Albaladejo

“They’re all public funds because they go through the state. But there's no Colorado State tax funds being used on any of this,” Hickey said.

Still, former state lawmaker Michael Foote said the state could do more to hold industry accountable and ensure that the new financial assurance process is doing what it’s supposed to.

“There’s legitimate debate as to whether or not enough money is available for all of the operators to be able to clean up their own mess,” Foote said. “I think there's enough concerns in order to try to tap the State Auditor to come in and do a legislative audit of the program.”

Mike Erickson, Denver7 Investigates

The Colorado Office of the State Auditor is an independent, nonpartisan agency in the legislature with the power to conduct performance, financial and information technology audits of all state departments and agencies. In recent years, the State Auditor looked into oil and gas production reporting and gas pipeline safety , leading to recommendations to improve safety and efficiency. But a Denver7 search of audits did not find any recent audits of the Colorado Energy and Carbon Management Commission, its Orphaned Well Program or the financial assurance process.

Until recently, Colorado regulators didn’t keep track when operators transferred ownership of wells. But Foote said that has allowed operators to transfer wells to “a dummy company that had no capability and no money to clean up the mess at the end.”

Environment

Lawsuit claims 'massive fraud' by oil companies that pushed off cleanup costs

Angelika Albaladejo

That’s what some homeowners accuse the operators Chevron and HRM Resources of doing when they transferred ownership of nearly 200 wells in northern Colorado to Painted Pegasus, which later went bankrupt and orphaned all of the wells.

One of those orphaned wells is in the front yard of the McCormick family’s home. We met Cindy McCormick in March when she and her husband, along with another affected family, filed a lawsuit against the operators .

“They were going to plug it and clean everything up,” she said. “It’s still here, and they're gone. They're gone. They've disappeared.”

Through the ongoing lawsuit, McCormick said her family is “hoping that [the operators] have to take accountability.”

Denver7 contacted the operators and individuals named in the lawsuit but did not receive a response.

Cameron Duckworth, Denver7

Last year, two more companies orphaned a record number of wells . Omimex Petroleum left behind 339 wells, while WME Yates deserted 212 wells. Both operators are now defunct.

Looking ahead, Denver7 Investigates found that thousands of low-producing oil wells, still on the books as “active,” are nearing the end of production and teetering on the edge of becoming Colorado’s responsibility.

Across Colorado, more than 7,000 wells are abandoned and potentially unplugged, according to estimates by Enverus Intelligence Research, an energy industry data analytics platform. Plugging those wells and cleaning up the areas around them would likely cost more than $600 million, based on those estimates.

The think tank Carbon Tracker found earlier this year that "all forms of financial assurance—plus state and federal funding for orphan wells—amount to only about $654 million over the next five years, even as the population of orphan wells is set to increase dramatically."

Cameron Duckworth, Denver7

Nationwide, the cost of plugging abandoned and unplugged wells will likely exceed $250 billion, yet current government funding can only cover the plugging costs for about 6% of those wells, according to data analysis by ABC News Investigates.

For now, Hickey said he’s hopeful Colorado can keep up with its orphaned wells.

“We've got a lot more inspectors out there now, and the industry is, for the most part, working above and beyond the regulations and keeping their sites very clean,” he said.

But it’s clear, even as the state is plugging more wells each year, the backlog keeps growing .

When Denver7 Investigates asked Hickey what the timeline is to clear the current backlog, he said “we just can't commit to a timeline because there's just too many unknowns. There's a lot more to do. So how long it will take? I couldn't begin to give you an answer.”

When oil and gas operators don't clean up their mess, Colorado takes on the costs and challenges

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