Four liberal-leaning nonprofits will spend north of $100,000 on an ad campaign starting this week to pressure Democratic Gov. Jared Polis and the Colorado Oil and Gas Conservation Commission to force the oil and gas industry to set aside millions of dollars to clean up abandoned and orphaned wells.
“Gov. Polis, we’re counting on your administration,” says the narrator of a television ad being paid for by the Sierra Club, ProgressNow Colorado, the League of Oil and Gas Impacted Coloradans and Colorado Rising.
A spokesperson for the coalition declined to specify exactly how much it will spend on radio, digital, and TV ads and a billboard in downtown Denver, only that it was at least six figures. The TV ads will air on stations including CNN, MSNBC and CNBC.
The groups behind the ad campaign have also launched a website – protectcoloradotaxpayers.com – as part of the initiative. They claim that if the COGCC doesn’t impose the prepayment rules taxpayers could be on the hook for the cost of cleaning up abandoned oil and gas wells.
“We are counting on the Polis administration to hold the oil and gas industry accountable and force them to plan for the clean up of their $8 billion mess,” ProgressNow Colorado political director Alan Franklin said in a written statement.
The ad campaign is notable because the Sierra Club, ProgressNow Colorado, LOGIC Colorado and Colorado Rising are groups traditionally aligned with Democrats. In fact, Polis was one of the founding board members of ProgressNow Colorado, and Democratic former state Rep. Jonathan Singer was recently named executive director of the League of Oil and Gas Impacted Coloradans, known as LOGIC.
“We’re going to run and spend as much as we need to on this one,” said Lauren Petrie, the interim executive director of Colorado Rising. “We’re just getting started with this educational campaign.”
The campaign also comes as Polis, who has faced criticism from some in the environmental community that he is weak on climate change, is gearing up for a reelection push this year.
The governor’s office did not respond to a request for comment.
The governor and Democrats in the Legislature have set ambitious greenhouse gas reduction goals, including ones that target pollution reductions by the oil and gas industry.
Significant cuts to methane pollution from the oil and gas industry, the largest source of non-combustion emissions in the state, are needed to meet the roadmap Polis’ administration has laid out.
In 2019, new legislation changed the mission of the Colorado Oil and Gas Conservation Commission’s from promoting oil and gas development to protecting health, safety and welfare. That law, Senate Bill 181, also required the agency to strengthen its financial assurance rules to prevent the state from being saddled with cleaning up a large number of orphaned wells, or those with no solvent owner.
The latest version of COGCC’s draft rules will be the focus of hearings set to begin Jan. 20 and require operators to post larger bonds and ask for more information about low-producing wells that change hands.
Operators currently must post a bond for plugging and cleanup of $10,000 or $20,000 per well, or a single $60,000 blanket bond for 100 or fewer wells and a $100,000 bond for 100 or more wells.
Environmentalists have long said those amounts are too low, and the COGCC has estimated that plugging and cleanup costs top $82,000 per well.
“We’re really disappointed in what we’ve seen thus far,” said Petrie, with Colorado Rising. “There’s no indication that the governor or the state agencies that he’s appointed are going to hold the industry accountable. Democrat or Republican, we want to make sure that taxpayers are not footing this massive bill for a trillion dollar industry. These companies should be able to clean up after themselves. If they can’t, they shouldn’t be drilling in the first place.”
Smaller companies have said proposed versions of the rules would tie up their working capital in bonds, cripple their business model and potentially drive operators out of business.
An initial draft requiring a $78,000 bond per well, for example, would have created “the most expensive financial assurance rules in the country,” said Dan Haley, president of the Colorado Oil and Gas Association, last year.
The commission in November watered down an earlier draft of the rules that had defined inactive and low-producing wells – seen as metrics for assessing the risk of orphaned wells – and set a dollar-value for plugging each of the state’s roughly 52,000 wells.
Industry advocates say Colorado has a relatively low number of orphaned wells, less than 500 compared to potentially hundreds of thousands in Pennsylvania, according to a 2021 report from the Interstate Oil & Gas Compact Commission.
A 2021 COGCC report found 236 orphaned wells and 547 associated orphaned sites in the state. That tally nearly doubled in October, when the commission voted to seize about 200 wells from five defunct or non-responsive operators.
A state program funded by fines and fees on oil and gas operators has covered the cost to clean up orphaned wells in the state. The draft rules require companies to pay an annual $200-per-well registration fee to remediate orphan well sites.
Abandoned wells are at risk of leaking methane, a powerful greenhouse gas, or chemicals if left unplugged. In 2017, a house in a neighborhood in Firestone was destroyed and two people were killed in an explosion after gas from a severed oil field line seeped into the basement and ignited.
While the COGCC operates independently of Polis, the governor does appoint its members.