Environmentalists Worry Colorado Will See a Surge of Abandoned Oil and Gas Wells as Industry Tanks

The number of temporarily abandoned oil and gas wells is up 37% from last year, but Colorado regulators say they still have the time—and money—to inspect them.

Drilling rig at night
A pickup truck drives toward an illuminated drilling rig close to Highway 66 north of Longmont, Colorado, on 29 June 2019.
Credit: Andy Colwell/Special to the Colorado Sun.

As the oil market craters and the economy is throttled by the novel coronavirus pandemic, environmental and grassroots groups are worrying about a potential surge in abandoned oil and gas wells, but state regulators maintain that the risk appears to be limited.

The Colorado Oil and Gas Conservation Commission held a meeting on 11 May to review the status of oil and gas operations in Colorado and regulatory oversight of those activities.

“I want to debunk the myth that operations are not safe during economic downturns,” COGCC Executive Director Jeff Robbins said.

Nevertheless, groups such as Conservation Colorado and the League of Oil and Gas Impacted Coloradans say the state will be ill-prepared—logistically or financially—to cope with an upsurge in abandoned wells.

“The commission does not have sufficient insight into the financial health of operators in the state, and the reports and filings submitted by the operators are not sufficient to give a clear picture of the environmental and public safety risks this market volatility poses for the people of Colorado,” Andrew Forkes-Gudmundson, deputy director of LOGIC, said in an email.

There certainly has been market volatility as the price of oil, first battered in a price war between major producers Saudi Arabia and Russia and then throttled by the pandemic-induced economic recession, has plummeted.

The spot price for West Texas Intermediate crude, the US benchmark, slid from a high of $60.05 a barrel at the end of 2019 to a low of $16 a barrel in April. It closed on 11 May at $24.65 a barrel. Prices for Colorado oil, because of transportation limitations, are slightly lower.

This has led to widespread cutbacks in investment by operators and concerns of bankruptcy. The first company to file for bankruptcy reorganization was Denver-based Whiting Petroleum on 1 April.

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