‘Green stimulus’ could mean thousands of jobs plugging oil and gas wells, says report

    BRIEF

    A pump jack is pictured near homes in Frederick on June 24, 2020. (Andy Bosselman for Colorado Newsline)

    As environmental activists in Colorado continue to worry about a potential spike in the number of abandoned oil and gas wells due to the industry’s financial struggles, a new report suggests that a “green stimulus” program by the federal government could solve both problems at once — employing laid-off oil and gas workers to plug and reclaim abandoned or at-risk facilities.

    Nationwide, such a program could create as many as 120,000 jobs over the next year, according to a paper released July 20 by researchers at Columbia University and environmental group Resources for the Future.

    “Amid this historic economic downturn, a large federal funding program to plug orphaned and abandoned oil and gas wells could deliver stimulative impact by boosting employment quickly in the struggling oil and gas sector while also reducing the emissions that cause climate change,” said Jason Bordoff, a co-author of the report and director of Columbia University’s Center on Global Energy Policy, in a news release. “With more than 20 million Americans unemployed in the face of COVID-19 shutdowns, plugging abandoned oil and gas wells could create tens of thousands of new jobs while cutting greenhouse gas emissions.”

    The report’s findings are based in part on data obtained from the Colorado Oil and Gas Conservation Commission. Based on cost and workforce estimates provided by the COGCC and other regulating agencies across the country, researchers concluded that a program to plug the United States’ 56,600 catalogued “orphaned” oil and gas wells could create at least 13,445 jobs at a total cost of between $1.4 billion and $2.7 billion. Such a program could likely be extended much further, however, since this official count is only a fraction of the roughly 500,000 undocumented orphaned wells that regulators estimate exist nationwide.

    Depending on their condition, orphaned wells can pose environmental risks like soil and groundwater contamination and leaks of methane gas, which contributes to global warming. Plugging inactive wells and reclaiming their surrounding sites can greatly reduce those risks, but such operations can be costly.

    In Colorado, the state’s most recent official count lists 215 orphaned wells and 454 associated orphaned sites, while an estimated 200 orphaned wells remain undocumented, according to a report by the Interstate Oil and Gas Compact Commission.

    Those are far lower numbers than many eastern states, like Pennsylvania, but Colorado’s cleanup costs could still be significant, especially if a wave of bankruptcies leads to a rise in abandoned wells. On average, plugging and fully reclaiming an oil and gas site in Colorado costs roughly $80,000 per well — an amount that often exceeds the financial-assurance bonds that producers are required to provide to operate in the state.