Paying for Colorado’s Orphaned Wells
Orphaned wells are defined as unplugged, abandoned oil wells that are no longer in production. In some cases, the owner or operator can not be located or determined. In other cases, the owner or operator is unable to plug the wells.
Oil and gas producers currently pay a bond to cover wells. The bond amount is based on the number of wells operated. Environmental groups have claimed that the financial assurance rules are not adequate. Critics of the current rules are lobbying for the Colorado Oil and Gas Conservation Commission to implement new rules that will put a much larger burden on operators. Colorado has a very low number of orphaned wells compared to states like Pennsylvania and Oklahoma.
Dan Haley, CEO of the Colorado Oil and Gas Association, joins Kim to explain the current funding of capping orphaned wells in Colorado is more than adequate and how continually placing a burden on operators increases the cost of doing business in the state, which will ultimately impact the ability of operators to hire employees and stay in business.