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Aaron Kindle and Jason Keith: Improve bonding for orphaned oil, gas wells

Aaron Kindle

Leave nature better than you found it: this principle of “leave no trace” is the mantra of every conservationist, hunter and outdoors enthusiast of the West’s iconic public lands.

If nature is to persist for future generations, we must all work together to make that happen. But right now, outdated federal policies are failing to hold oil and gas companies to this standard and a new report highlights that without reform, future generations will not have the same access to beautiful landscapes we have been so lucky to explore and enjoy.

Our organizations – the National Wildlife Federation and Public Land Solutions – recently released a report that examines the potential costs and consequences of a growing concern across the West: a surge in orphaned oil and gas wells. These are wells that are left behind when companies declare bankruptcy.

According to our report, at least 8,050 wells on federal lands in Colorado, Montana, New Mexico, Utah and Wyoming are orphaned or at risk of being orphaned. And this is just the tip of the iceberg – the number of at-risk wells is likely much higher.

Abandoned wells can leak methane and other toxins that threaten wildlife habitat, drinking water and clean air – and in turn, outdoor recreation, hunting and angling. These impacts inhibit the ability of many communities to evolve from resource extraction toward more diverse economies and attract quality-of-life recruits such as businesses, remote workers, entrepreneurs and retirees who bring revenue streams and jobs.

The threat cannot be overstated. Our report found that thousands of wells across the West are located in priority wildlife habitat or near iconic outdoor recreation sites. More than 100 are within a mile of a national park, recreation site, or special designation fishery.

Here in Colorado alone, 360 are within big-game crucial winter areas and 128 are in big-game priority areas. Hunting and fishing generate more than $3 billion in consumer spending and support 25,000 full time jobs in Colorado, while outdoor recreation generates $12 billion and 149,000 full time jobs in the state. These inactive wells threaten that economic activity.

When oil and gas companies plan to drill on our federal public lands, they must first put down a bond – money meant to pay for the cleanup of their wells if the company goes bankrupt and cannot pay for it themselves. The U.S. Government Accountability Office (GAO) found that the Bureau of Land Management (BLM) charges rates set in the 1950s and ‘60s that are far too low to cover the actual costs of cleanup. Using GAO data, we estimate that reclaiming the 8,050 wells we examined could cost up to $1.2 billion – but only an estimated $17 million in bonds have been collected for these wells.

The White House and Congress must work to strengthen bonding requirements that actually cover the cost of well reclamation.

We’re beginning to see some optimistic signs. This week, Rep. Teresa Leger Fernandez (D-NM) introduced legislation for abandoned well cleanup, which included the important provision of increasing bonding rates so that we don’t face this problem in the future. We are hopeful that Sen. Michael Bennet (D-Colo.) will re-introduce a similar bill that he championed last year. Energy companies must be responsible for the costs of cleanup – not the American taxpayer.

Hikers, campers, climbers, bicyclists and hunters all know they should strive to leave no trace; it is time that oil and gas companies be held to that principle. It is unacceptable that companies are allowed to endanger our lands, health and recreation economy because of policies that simply have not been modernized.

Our report shows what a giant crisis abandoned wells have become. But there is opportunity for common-sense changes to ensure that taxpayers are not left on the hook to reclaim them. As the Biden Administration and some in Congress work to reform the leasing system, sensible bonding reform must be a priority.

Aaron Kindle is director of sporting advocacy at the National Wildlife Federation. Jason Keith is a managing director of Public Land Solutions.