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Millions in federal funding made available to plug abandoned wells

Spending could create jobs, address environmental hazards
An abandoned well in 2017 near Redmesa, 30 miles southwest of Durango. (Jerry McBride/Durango Herald file)

Colorado may receive $25 million or more in federal funding to plug abandoned oil and gas wells across the state, government officials said Monday.

The funding is expected to create new jobs in the oil and gas industry, which lost thousands of workers during the pandemic. The money would come from the infrastructure bill passed by Congress in 2021, which allocated $4.7 billion toward restoring orphaned wells nationwide. Initial grants of $25 million each were allotted to 26 qualifying states.

“We’re well-positioned to add staff and to leverage this funding to help create jobs and clean up these sites,” said Megan Castle, a spokeswoman for the Colorado Oil and Gas Conservation Commission. “This federal funding is very much welcomed to help us continue to further our mission to protect public health, safety, welfare, wildlife and the environment in Colorado.”

The COGCC identifies and remediates orphaned oil and gas wells, which have been abandoned by an operator that is either unknown or unwilling to pay to plug them. These abandoned wells can leak chemicals into the air and ground, potentially threatening public health.

In a five-county region of Southwest Colorado, which includes La Plata, Montezuma, Archuleta, Dolores and San Juan, COGCC has identified 58 sites with wells that require plugging and 45 wells that are plugged but need further reclamation, according to data provided by Castle.

The Department of Interior identified 625 orphaned wells in Colorado, which COGCC estimates will cost over $47 million to plug and restore (addressing a single well costs an average of $82,500). The federal grant process occurs in phases, and Colorado is eligible to apply for a total of $39 million in Phase 1. Ultimately, the state could receive $79 million from the program in the coming years.

Mike Eisenfeld, energy and climate program manager of the San Juan Citizens Alliance, an environmental advocacy group, said the funding is welcome news.

“Gas companies are supposed to be the ones dealing with the cleanup and reclamation and ensuring that the ‘plug and abandon’ is done right, but this is sort of a manifestation of a pass-through to taxpayers,” he said. “It’s an indication of what’s to come and an indication of why it’s so important that companies be held accountable and that oil and gas sites be cleaned up properly.”

Eisenfeld said unplugged orphan wells can pose a risk to the natural environment by contaminating water, an issue of particular concern to his organization.

Michelina Paulek, executive director of the La Plata County Energy Council, an advocacy group for the oil and gas industry, said she supports plugging wells when they pose an environmental hazard or are no longer financially viable.

“If there’s an environmental hazard, not only is it wise for the industry to look into that, but it’s our responsibility as a good neighbor,” she said. “You know, everyone that’s producing works and lives in the communities, so we’re mindful of the environmental impacts it has.”

She said regulations in Colorado could make it unaffordable for operators to adequately plug and restore their wells, concluding that “there’re unintended consequences to laws that we make.”

The COGCC is considering updating its regulations to guarantee that operators can afford to plug and clean their wells. The commission plans to apply for the initial grant of $25 million as soon as the federal government releases more information.

Skye Witley, a senior at American University in Washington, D.C., is an intern for The Durango Herald and The Journal in Cortez. He can be reached at switley@durangoherald.com.

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