Commentary

Federal reform is needed to protect Coloradans from oil industry messes

Fossil fuel companies only have to put up a fraction of potential cleanup costs. Taxpayers end up footing the bill.

February 18, 2022 6:00 am

Oil and gas development on Bureau of Land Management land in Colorado. (Bob Wick/BLM/Public domain)

Coloradans are proud of our public lands. We enjoy them in our free time, they’re critical to the economy, and they’re an important part of our state’s identity. We’ve always been careful about how we allow private companies to operate on them.

Unfortunately, companies that drill for oil and gas on public lands don’t always do so with that value in mind, and due to bankruptcy or irresponsibility, they leave big messes behind when they’re done drilling.

To protect our lands and our public health, and to ensure we don’t use public dollars to clean up after the oil and gas industry, the federal government requires companies to put up money that covers cleanup costs, known as a bond. That way, if the company goes bankrupt or illegally abandons their wells, Colorado is protected.

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As it stands, the federal bonding system is outdated. By relying on old rules, the government is allowing companies to put up only a fraction of potential cleanup costs before drilling. This invariably leaves Coloradans to foot the bill through our tax dollars. You might have seen news coverage of these “orphaned” wells.

A conservative estimate puts the number of orphaned wells on Colorado’s public lands at more than 600. These wells litter our landscape, create climate-harming pollution, and prevent Coloradans from enjoying the public lands we all cherish.

Ultimately it’s the companies making the mess that should be responsible for the cleanup, not you and me.

This week, U.S. Interior Secretary Deb Haaland will visit Colorado to tout last year’s infrastructure bill. Haaland’s department recently released orphaned well funding disbursements, which provided important cleanup funding. While these are federal dollars instead of more limited state dollars, federal aid isn’t enough to cover the full cost, and ultimately it’s the companies making the mess that should be responsible for the cleanup, not you and me.

Interior also recently released a report that outlined reforms for modernizing the broken federal oil and gas leasing program, including a recommendation to increase the more than 60-year-old bonding rates. However, the Biden administration can’t solely drive change towards a better, modernized system. Congress also has a responsibility to fix it.

A bill introduced last year by Sen. Michael Bennet would make substantial improvements to this broken process. Bennet’s bill would make companies pay for cleanups up front and would require wells be cleaned up after two years of inactivity. It would also create a fund to provide jobs to help identify wells that need to be capped, and then ensure they are properly cleaned up and can’t pollute our public lands or our communities.

Every day under the status quo of the outdated federal oil and gas leasing program, Coloradans and our public lands get the short end of the stick, and public opinion research shows we’re fed up with it. Ninety-five percent of Coloradans support requiring oil and gas companies to clean up and restore lands after drilling, according to a 2021 poll conducted by Colorado College.

Congress and the Biden administration have a responsibility to finally fix the problem of orphaned wells in Colorado. An oil and gas leasing system that serves the needs of all Coloradans — not just polluters and big businesses — would go a long way towards that goal. We need leaders like Haaland, Bennet and Hickenlooper to make it happen.

Protecting our public lands and ensuring our communities aren’t responsible for paying to clean up messes created by the oil and gas industry is something everyone can get behind.

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Pegah Jalali
Pegah Jalali

Pegah Jalali is the environmental policy analyst for the Colorado Fiscal Institute, a nonpartisan, nonprofit organization that advances fiscal and economic policies that promote equity and widespread prosperity.

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