Guest Columns

Waste of the Day: Coloradans Could Pay $3 Billion for Oil Companies’ Mess

Colorado has many oil wells that are not profitable enough to cover costs of cleanup and final decommissioning.

Published

3 months ago

August 16, 2024

Adam Andrzejewski

Topline: Colorado’s oil and gas wells are not profitable enough to cover their own cleanup costs.

Colorado and its legacy oil well problem

A new study from the Carbon Tracker Initiative says low-producing, aging “legacy” wells will only generate another $1 billion in revenue before they must be decommissioned at a cost of $4 billion to $5 billion. That leaves a gap of at least $3 billion that taxpayers will likely be responsible for.

Key facts: The study analyzed Colorado’s more than 27,000 legacy oil and gas wells which represent 57% of all wells in the state. When active wells are included, the cleanup cost rises to up to $8.5 billion, but many of those wells are profitable before they’re shut down, so taxpayers funds might not be used.

A single well can cost over $110,000 to “plug,” according to The Guardian. If it’s not done properly, the well can leak carcinogens and methane. When oil companies don’t have enough money to do it themselves, the responsibility falls to the state.

Colorado passed laws in 2019 that were supposed to make sure energy companies had enough cash to decommission their own wells. But the Carbon Tracker Initiative says the rules are filled with loopholes and will only save taxpayers $654 million by 2029 in the “best-case scenario.”

The state has also struggled to enforce its law. It ordered drilling company K.P. Kauffman to save $133 million over the next 10 years for well decommissions, but the company has already said it can’t pay a $2 million fine levied by the state, according to The Guardian.

No plans yet to cover costs of orphan wells

Sixty-six energy companies haven’t submitted plans to cover the cost of cleaning up their unplugged wells, but so far they’ve only been “sent some enforcement letters,” The Guardian reported.

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.

Background: As of 2022, there were at least 120,000 “orphan wells” in the U.S with no owners to be found. Some estimates say there could be another 1 million waiting to be discovered, according to The Washington Post.

President Biden’s Bipartisan Infrastructure Law allocated $4.7 billion to help states clean them up.

Summary: Most Americans are taught as early as kindergarten to pick up after themselves. Someone needs to remind oil companies of basic etiquette.

The #WasteOfTheDay is brought to you by CEO & founder, Adam Andrzejewski, with Jeremy Portnoy. Learn more at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.

Adam Andrzejewski

CEO at OpenTheBooks.com | Website | + posts

Adam Andrzejewski (say: Angie-eff-ski) was the CEO/founder of OpenTheBooks.com. Before dedicating his life to public service, Adam co-founded HomePages Directories, a $20 million publishing company (1997-2007). His works have been featured on the BBC, Good Morning America, ABC World News Tonight, C-SPAN, The Wall Street Journal, The New York Times, USA Today, FOX News, CNN, National Public Radio (NPR), Forbes, Newsweek, and many other national media.

Today, OpenTheBooks.com is the largest private repository of U.S. public-sector spending. Mission: post "every dime, online, in real time." In 2022, OpenTheBooks.com captured nearly all public expenditures in the country, including nearly all disclosed federal government spending; 50 of 50 state checkbooks; and 25 million public employee salary and pension records from 50,000 public bodies across America.

The group's aggressive transparency and forensic auditing of government spending has led to the assembly of grand juries, indictments, and successful prosecutions; congressional briefings, hearings, and subpoenas; Government Accountability Office (GAO) audits; Congressional Research Service (CRS) reports; federal legislation; and much more.

Our Honorary Chairman - In Memoriam is U.S. Senator Tom Coburn, MD.

Andrzejewski's federal oversight work was included in the President's Budget To Congress FY2021. The budget cited his organization by name, bullet-pointed their findings, and footnoted/hyperlinked to their report.

Posted on YouTube, Andrzejewski's presentation, The Depth of the Swamp, at the Hillsdale College National Leadership Seminar 2020 in Naples, Florida received 3.8 million views.

Andrzejewski has spoken at the Columbia School of Journalism, Harvard Law School and the law schools at Georgetown and George Washington regarding big data journalism. As a senior policy contributor at Forbes, Adam had nearly 20 million pageviews on 206 published investigations. In 2022, investigative fact-finding on Dr. Fauci's finances led to his cancellation at Forbes.

In 2022, Andrzejewski did 473 live television and radio interviews across broadcast, major cable platforms, and radio shows. Andrzejewski is the author of The Waste of the Day column at Real Clear Policy. The column is syndicated by Sinclair Broadcast Group, owners of nearly 200 ABC, NBC, CBS, and FOX affiliates across USA.

Andrzejewski passed away in his sleep at his home in in Hinsdale, Illinois, on August 18, 2024. He is survived by his wife Kerry and three daughters. He also served as a lector at St. Isaac Jogues Catholic Church and finished the Chicago Marathon eight times (PR 3:58.49 in 2022).

Waste of the Day articles published after August 18, 2024 are considered posthumous publications.