... ... I think this is bullshit. The taxpayer should not be on the hook for their survival. Maybe if we were only talking about being on the hook economically, I would feel differently, but we're...
When it comes to cleanup, Colorado uses a tiered system known as blanket bonding. Small operators can pay ahead with bonds on single wells. Drillers with more than 100 wells statewide pay a fixed reclamation fee of $100,000, regardless of the number of wells. A similar system also applies to wells on federal public land in the state. Large companies pay a single $150,000 bond, which covers unlimited federal public land wells throughout the country. There are about 7,400 public-land wells capable of producing oil or gas in Colorado, according to the Bureau of Land Management.
When a driller walks away or cannot pay for cleanup, the well enters the state’s Orphan Well Program, which works to identify and plug these wells. There are about 200 wells in the program right now, according to the state. But a closer look at state data reveals a large number of wells at risk. Nearly half of the state’s unplugged wells are stripper wells — low-producing operations with small profit margins often at the end of their lifespans. These wells are particularly vulnerable to shifts in oil prices. That means they change hands often. “This is a common tactic in the oil and gas industry: Spinning off liabilities to progressively weaker companies, until the final owner goes bankrupt and none of the previous owners are on the hook for cleanup,” said Clark Williams-Derry, a finance analyst with the Institute for Energy Economics and Financial Analysis.
...
The deep divide between the true cost of cleanup and what industry has so far ponied up is not news to Colorado regulators. In a 2017 letter to lawmakers, the COGCC estimated that the average costs of plugging wells and cleaning up the drilling site “exceed available financial assurance by a factor of fourteen.”
...
“When it comes to financial assurance for current or future wells, we need to ensure that the potential solution doesn’t create an even bigger problem by raising the cost of doing business in Colorado for small businesses,” said COGA President Dan Haley in a statement. “Regulatory changes in the past two years alone are costing oil and gas businesses an extra $200 million a year. For our state to stay competitive, regulators and lawmakers need to be cognizant of that growing tally and the rising cost of doing business.
...
...
I think this is bullshit. The taxpayer should not be on the hook for their survival. Maybe if we were only talking about being on the hook economically, I would feel differently, but we're not just talking about economics. More than 100 years of drilling have left 3 million abandoned oil and gas wells across the United States, and more than 2 million of them are “unplugged” according to the U.S. Environmental Protection Agency. Far from mere eyesores or local environmental hazards, these abandoned wells gush millions of metric tons of methane – 84 times more potent than carbon dioxide over a 20 year timeline The mining and drilling industries are filled with talking points that want the market to sort it out. The market is not sorting it out. Instead of bonds, I don't know why they aren't required to hold insurance for clean-up. When a company decides to sell the wells, if the buyer is unable to get it insured then they shouldn't be able to buy it. Let the price increases be payed by the end user. If they find the cost to be too high, the market will have sorted it out.