en an oil or gas well reaches the end of its lifespan, it must be plugged. If it isn’t, the well might leak toxic chemicals into groundwater and spew methane, carbon dioxide and other pollutants into the atmosphere for years on end. But plugging a well is no simple task: Cement must be pumped down into it to block the opening, and the tubes connecting it to tanks or pipelines must be removed, along with all the other onsite equipment. Then the top of the well has to be chopped off near the surface and plugged again, and the area around the rig must be cleaned up.
There are nearly 60,000 unplugged wells in Colorado, including active and inactive wells, and all will eventually need to be plugged. Plugging an oil and gas well costs $140,000 on average, according to the Carbon Tracker, a climate think tank, in a new report that analyzes oil and gas permitting data. Plugging this many wells will cost a lot —more than $8 billion, the report found. Companies that drill wells in Colorado are legally required to pay for plugging them. They must also put forward financial assurances in the form of bonds, which the state can call on to pay for the plugging. These bonds are meant to incentivize cleanup and to protect the state, in case a company is unable to pay. But as it stands today, Colorado has only about $185 million in bonds from industry — just 2% of the estimated cleanup bill, according to the new study. The Colorado Oil and Gas Conservation Commission (COGCC) assumes an average cost of $82,500 per well — lower than the Carbon Tracker’s figure, which factors in issues like well depth. But even using the state’s more conservative number, the overall cleanup would cost nearly $5 billion, of which the money currently available from energy companies would cover less than 5%. To view the full article visit High Country News.