Democrats Want To Clean Up Abandoned Oil Wells, But In Utah Bonding Is The Problem
The Biden administration is focused on addressing abandoned oil and gas wells as part of its effort to combat climate change. A number of bills have been filed by Democrats to address the issue, and a House Natural Resources subcommittee held a hearing for one of them yesterday.
“Orphan wells pose a serious threat to our communities and the climate,” said Rep. Teresa Leger Fernandez, D-NM, the bill’s sponsor. “They can leak toxic fluids into our water and pollutants into our atmosphere, including the heat-trapping gas methane.”
There were around 57,000 confirmed orphan wells across the United States in 2019, according to a report by the Interstate Oil and Gas Compact Commission. Around 70 of those wells are in Utah, according to the state’s Division of Oil, Gas and Mining.
Rikki Hrenko-Browning, with the Utah Petroleum Association, said that number is pretty low.
“The division has done a great job cleaning up these wells,” she said. “If you compare that to other states, you’ll see inventories in the hundreds or in some cases even the thousands.”
But that number is likely to go up as green energy replaces oil and gas and producers go bankrupt.
A report published in March found there are around 450 wells “at risk” of becoming orphaned in Utah. These are wells that have not been reclaimed and have been inactive for at least five years, according to the report, which was commissioned by the National Wildlife Federation and a Utah-based nonprofit called Public Land Solutions.
Rob Schuwerk is with a non-profit called the Carbon Tracker Initiative, and he said that means states like Utah need to start increasing the bonding requirements for oil and gas wells now.
His group found it will cost around $4 billion to plug all the wells in Utah, but companies have put up less than $20 million in bonds.
“That’s less than 1%, so that’s pretty bad,” he said. “Utah is actually worse off even than its neighbors.”
Colorado and Wyoming have secured around 2% of what they will need to adequately plug and reclaim all of the oil wells in those states, according to numbers from the Carbon Tracker Initiative, while New Mexico has secured around 1%. Utah is at 0.43%.
Fernandez’s bill would help increase the bonding requirements for oil and gas wells, but Schuwerk said it doesn’t go far enough to address the issue.
He suggested states require oil and gas companies fully bond every well, rather than allow companies to pay a set price no matter how many wells they own in the state, a practice called blanket bonding.