Colorado Oil & Gas Commission Examines Industry Financial Obligations Toward Orphan Wells | Energy and environment

Colorado Oil & Gas Commission Examines Industry Financial Obligations Toward Orphan Wells |  Energy and environment

The Colorado Oil and Gas Commission this week kicked off the process of changing the rules regarding the financial obligations drilling companies must meet to clean up “orphan wells.”

An orphan well is a well that is no longer functioning for whatever reason and must be “plugged, repaired and reclaimed” by the state. Often times, they’ve been ditched by failed companies or left behind when state regulators shut down a bad operator.

There are 215 orphan wells in the state, and 454 “associated orphans” sitesAs of July 1, according to the Commission’s 2020 report. For comparison, Wyoming has about 2,700 orphaned wells that need to be addressed, according to the Casper Star Tribune.

Then-governor John Hickenlooper signed an executive order in 2018 requiring the annual report on the number of wells and remediation efforts. He also increased the state program budget from $ 445,000 to $ 5 million, which allowed the commission to increase the number of full-time employees to four.

This order increased the amount of financial guarantees, or surety bonds, that oil and gas companies must accept from any drilling license. These obligations range from $ 2,000 to $ 5,000 per “shallow well” or from $ 10,000 to $ 20,000 for wells drilled, depending on the depth. In addition, companies must …

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