For decades, oil and gas development has spread across the American West, driving local economies through boom and bust cycles, fragmenting wildlife habitat, and harming communities with air and water pollution. States play a critical role in protecting public health and the environment by inspecting oil and gas facilities, identifying violations, and, when appropriate, issuing financial penalties. However, the structure and success of oil and gas enforcement programs varies widely from state to state. An examination of Western state oil and gas enforcement finds that, while some states have successful programs worth emulating, many have room to improve in order to adequately protect the health and safety of local communities and hold companies accountable.
Enforcing environmental and safety regulations is especially critical as the coronavirus pandemic intersects with market forces to send oil prices tumbling. With widespread operations and crashing oil prices, companies are looking to cut costs and many face the prospect of bankruptcy. With low financial consequences for violations, many companies may see noncompliance as a cheaper option than correctly monitoring their operations or shutting down wells. It is critical that Western states prioritize improving their oil and gas enforcement programs to protect local communities and the environment, and make sure taxpayers aren’t left on the hook for cleanup costs.
A new analysis by the Center for Western Priorities finds that many Western state oil and gas enforcement programs are, at times, understaffed, leading to low inspection rates. Few states issue financial penalties that are adequate to ensure oil and gas companies are complying with regulations, with some states issuing no financial penalties at all. In total, Western state oil and gas enforcement programs only collected $5.5 million from 62 fines in 2018, with more than 95% of that value assessed in Colorado. Critically, state enforcement programs often lack transparency, leaving the public in the dark. While some states have improved in recent years, decades of studies have shown that most states face chronic problems when enforcing oil and gas regulations.
Looking across states, Utah has historically had the worst enforcement, while Wyoming and New Mexico are in the process of improving programs. Colorado, Montana, and Nevada have some of the stronger oil and gas enforcement programs, although they have opportunities to improve.