Taxpayers Will Pay for Colorado Oil and Gas Spill

( – A new report shows that the oil and gas wells in Colorado can’t generate enough revenue to cover the cleanup costs of their own spill. Coloradans can expect to pay out three billion dollars from taxpayer money if state officials don’t act quickly.

Carbon Tracker, a think tank that did the report, found that twenty-seven thousand oil and gas wells in Colorado will generate one billion dollars in revenue at most. It will cost about four to five billion dollars to decommission the sites responsibly, which means that the state can expect a cash crunch of three billion dollars.

Colorado’s Energy and Carbon Management, or ECMC, said that it could cost over one hundred thousand dollars to close a site. Many companies decided to avoid these charges by delaying cleanup forever, selling off aged wells, or simply going out of business. There are over one hundred and twenty thousand ”orphan wells” that are in the United States that lack financially solvent operators, leaving the issues to the government.

Rob Schuwerk, executive director of Carbon Tracker and a co-author of the report, said, “The biggest problem here is just the nature of this activity: You make a lot of cash at the beginning, and then you have a big cost at the end. The way you cover a cost like that is you make people save along the way, and this is not done now.”

Two years ago, Colorado rolled out an approach that would ensure these companies take care of the cleanup bill. The governor, Jared Polis, put in place changes that would make it harder for operators to walk away from these polluting wells.

Margaret Kran-Annexstein, director of the Sierra Club’s Colorado chapter, said, “Even under the new rules, the gap between projected cleanup costs and secured bonding is measured in the billions of dollars. It’s frankly dangerous for Colorado to imply this is the best we can do.”

Megan Castle, ECMC’s community relations supervisor, said that there are more plugged wells than unplugged wells in Colorado. Said Castle, “Colorado’s financial assurance structure is designed to ensure operators – not the State – remain responsible for the entire lifecycle of the well and site.”

Copyright 2024,