Colorado awarded $25M to help clean up orphaned oil and gas wells

WASHINGTON, DC — Colorado and two other states were awarded a total of $52 million to clean up orphaned oil and gas wells, the U.S. Department of the Interior announced on Friday.

Of that $52 million, Colorado will receive $25 million. Illinois was given $25 million and West Virginia was awarded $1.97 million. The $52 million is part of President Joe Biden's Investing in America agenda .

According to the Department of the Interior, Colorado's $25 million will help fund multiple projects:

• Plugging 106 orphaned wells
• Complete equipment decommissioning, remediation and restoration at about 200 additional sites where the wells were previously plugged

The three states will "measure methane emissions from orphaned oil and gas wells, screen for groundwater and surface water impacts, and seek to prioritize cleaning up wells near overburdened and disadvantaged communities," the department said.
Orphaned oil and gas wells pollute not only private land, but also public land, including recreation areas and other community spaces.

RELATED:

• Oil companies used 'fraud scheme' to avoid cleanup responsibility for abandoned wells, lawsuit alleges (March 1, 2024)
• Colorado oil and gas company ordered to come up with $133 million to assure wells will be plugged, abandoned (Nov. 3, 2023)
• Colorado’s costs to plug abandoned oil and gas wells shifting from taxpayers to companies (Aug. 9, 2023)

"Many of these wells pose serious health and safety threats by contaminating surface and groundwater, releasing toxic air pollutants, and leaking methane — a 'super pollutant' that is a significant cause of climate change and many times more potent than carbon dioxide at trapping heat in the atmosphere," the Department of the Interior said.
The funding will not only address the environmental and safety hazards, but will also create good-paying jobs and economic growth for residents in Colorado, Illinois and West Virginia, the department said.

The awards for Colorado and Illinois are part of $660 million formula grant funding to tackle legacy pollution — an investment that was announced in July 2023. Those funds are being released on a rolling basis.

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"Through the Bipartisan Infrastructure Law, the Department is delivering the largest investment in  tackling legacy pollution in American history, including $4.7 billion to plug orphaned wells," the department said.

Since the Bipartisan Infrastructure Law was enacted, more than 7,700 orphaned wells across the country have been plugged. The Department of the Interior estimated that this work supported 7,200 jobs and contributed more than $900 million to the economy over two fiscal years.

“Toxic orphaned oil and gas wells have plagued American communities for generations," said U.S. Secretary of the Interior Deb Haaland. "President Biden’s Investing in America agenda is empowering states across the country to address this long-standing environmental injustice by making a historic investment to plug these wells, which will create jobs and revitalize local economies. With this historic funding, Colorado, Illinois and West Virginia will continue the progress already made plugging wells and begin to turn the tide on these environmental hazards that are harming our lands, waters and air.”

Fort Collins

A deal struck in Northern Colorado will shut down, clean up polluting oil wells

Angelika Albaladejo

In 2022, 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. As of now, there are more than 1,700 well locations considered “orphaned” by operators who walked away from their responsibilities to plug and reclaim their wells and well sites.

Read more about this in our report from August 2023 here or watch the video below.

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

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

Last fall, a Colorado oil and gas company learned that it must come up with $133 million over the next decade to make sure its more than 1,000 wells will be plugged and abandoned — a move the Energy and Carbon Management Commission said shows they're serious about making the oil and gas industry clean up after itself.

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