Colorado Taking Action on Orphaned Oil & Gas Wells

By Aug. 1, the state's Oil and Gas Conservation Commission will produce an updated list of all such sites known to exist in the state. Gov. John Hickenlooper's executive order expands state efforts to plug, remediate, and reclaim them and to prevent additional wells and sites from being orphaned in the future.

Colorado Gov. John Hickenlooper recently signed an executive order that aims to address safety concerns with more than 260 orphaned oil & gas wells and 360 orphaned sites in Colorado, with the order directing the state's Oil and Gas Conservation Commission to update its list of all such sites known to exist in the state by Aug. 1. His executive order followed a review the governor ordered in the aftermath of the Firestone house explosion in April 2017, which killed two people and injured a third person.

"That tragedy was a catalyst that compels us to improve the safety of Colorado's oil and gas industry," Hickenlooper said July 18. "We send a strong statement of unity when stakeholders throughout the industry agree to take action to remediate orphaned wells and orphaned sites and prevent the issue in the future."

An orphaned well is one where no owner or operator can be found, while an orphaned site is one where a significant adverse environmental impact may be caused by oil and gas operations for which no responsible party can be found. His executive order says the estimated total cost to plug, remediate, and reclaim the existing sites is more than $25 million, and the average cost to plug one of them is six times higher than the among of financial assurance held by the state. By Sept. 1, 2019, the commission is directed to promulgate rules to ensure the sufficiency of financial assurance for this.

The order includes these directives:

  • Reduce the backlog of high- and medium-priority orphaned wells and orphaned sites to zero.
  • Engage the oil and gas industry in the plugging, remediation, and reclamation of these wells and sites.
  • Set up a system of financial assurance that prevents future orphaned wells and orphaned sites by providing sufficient funding for plugging, remediation, and reclamation activities.

The public will have access to the list of known sites by Aug. 1, 2018, and the list will be updated annually by the commission.

Julie Murphy, director of the commission, said the order "will accelerate our ongoing work to properly plug and safeguard orphaned wells. This approach is designed to address the issue comprehensively - through more effective prevention of future orphaned locations and more aggressive work to remedy existing priority sites."

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