Category Archives: Financial Assurance

my comment to cogcc financial assurances rulemaking hearing january 20, 2022

Good evening, Commissioners

My name is Edward Behan, and I am a resident of Fort Collins, Colorado. I am here to express my concern about proposals for financial assurance requirements to be exercised on oil and gas operations in Colorado.

I think it is very important to require sufficient bonding from an oil and gas operator to cover the costs of plugging a well at the end of its service life, and to restore the land upon which it was operated. This is a concern to me whether it is a new drilling operation, or if a company is taking over an existing site for further exploitation. I am also seriously concerned about those wells that are simply abandoned by some operators if they have financial difficulties. It is clear that some outfits are more meticulous about their responsibility for these costs than others. It is not right that the State of Colorado and its taxpayers should pick up the bill for reclaiming any drilling site that has been abandoned without proper closure and restoration. Nor would that be fair to any operator who does execute their final operations responsibly.

Before my wife and I moved back to Colorado in 2016, we lived for fifteen years in the Gulf Coast region of Texas and Louisiana. The last eight years in Baton Rouge were particularly instructive. We were there at the time of the BP oil spill, and in the aftermath of that tragic accident, there was much discussion about other elements of how the industry had been acting in that area for decades. Plugged and abandoned wells both onshore and offshore, that were supposedly sealed, were leaking. Pipeline tracks and canals that had serviced the drilling operations throughout Louisiana’s fragile wetlands had never been restored to their original condition, and that damage has contributed to the loss of coastal wetlands. The regulatory agencies and the legislature seemingly had no interest in holding the oil companies to the requirements of the agreements that they had signed regarding restoration of the land.

Colorado has a different sort of environment, but one that is equally fragile. The effects of improperly closed out drilling sites will have impact on our air and water quality. The Commission has a unique and weighty responsibility in this, especially under your newer mandate to protect the health, safety and environment in supervising the oil and gas industry.

 I ask that you pay attention to those calling for full cost bonding of individual wells. Those costs may vary, but they need to be calculated to ensure that we taxpayers are not subsidizing their operations, and that proper care is taken of our precious Western environment. Thank you.

background on new year fundraising campaign to fund legal counsel



The LarimerAlliance is working to advocate for implementing effective new rules on the oil and gas industry, both locally here in Larimer County and before the Colorado Oil and Gas Conservation Commission (COGCC). We are hoping to assist in the funding of lawyers and other technical experts as new financial assurance regulations are developed by the COGCC

The Larimer Alliance is urging the Colorado Oil and Gas Conservation Commission to require full cost bonding for all new and existing wells, and all wells upon transfer. Colorado taxpayers should not have to foot the bill for day-to-day operations, nor for the pollution, spills, or disasters associated with oil & gas (O&G) operations. The most recent draft of financial assurance rules presents a proposal for blanket bonding of O&G sites, rather than requiring full cost coverage individually for completed operations or abandoned wells. A detailed discussion of the full cost of dealing with wells at the end of their service can be heard in this segment of KUNC’s Colorado Edition, talking with Andrew Forkes-Gudmunson of LOGIC. Examples of continued emissions from an abandoned O&G facility can be seen in Earthworks videos utilizing Optical Gas Imaging enabled by FLIR technology, as seen in the screen captures above and in this blog post.

The LarimerAlliance asks your continued financial support to help compensate an attorney representing us in the final stages of the COGCC financial assurance rulemaking. As party to State level rule making, we have worked in the past with attorneys from the Conservation Groups coalition, which includes organizations such as LOGIC and Earthjustice. We will again collaborate with them at the upcoming hearings for this round of rulemaking, currently scheduled for January and February of 2022, as detailed in this post from the Larimer Alliance blog. Having knowledgeable, skilled, dedicated, and persuasive legal help is imperative to our success.

We’ve set a goal for this drive of $4,000.00, and we have already raised $2,745.00

Our goal is for the COGCC to enact rules so that all new and existing wells, and all wells upon transfer, will be required to carry full cost bonding. Your  continued contributions will help us add a legal expert to aid in advocating on our behalf of this extremely important goal.

The Larimer Alliance will continue to provide

updates on the progress of these hearings,

and on opportunities to provide public comment.

For all you do, our continued thanks!

Or if you prefer please send checks made out to

the Larimer Alliance to401 E. Prospect Rd, Fort Collins, CO 80525

earthworks videos highlighting problems with abandoned O&g sites

The images paired above do not begin to do justice to the issue of long abandoned oil and gas facilities in Colorado. Earthworks conducts extensive field surveys of producing, temporarily shut down, and abandoned facilities around the country. Their optical gas imaging using FLIR camera technology illustrates the continued venting from supposedly inactive units. These screen captures were taken from one of the videos posted below.

This highlights the critical need for comprehensive financial assurance regulation, which is being discussed at the Colorado Oil and Gas Conservation Commission in January and February of 2022. Public comment opportunities are scheduled and information on that can be found in this previous blog post.

These are the full YouTube videos of Earthworks:

some coal in your christmas stocking: the potential of O&G well abandonment in colorado

As 2021 draws to a close, I wanted to add one last post to the blog here about an issue concerning the oil and gas industry that bears remembering for its possible effect on all citizens of Colorado: the potential of O&G well abandonment in Colorado, and the possibility of state taxpayers having to pay for it — instead of the O&G industry.

That possibility was made all too clear in an interview that the radio station KUNC did on November 19, 2021 with Andrew Forkes-Gudmunson, who is the deputy director of LOGIC, the League of Oil and Gas Impacted Coloradoans. This was part of the station’s excellent news show about local issues, the Colorado Edition that airs at 6:30pm. You can still listen to the interview on their website at

To get to the chase, after all of the state data was analyzed by LOGIC, using data from the COGCC website, LOGIC came to the conclusion that about 70 per cent of the active wells in the state produce less than one barrel of oil a day, and that the majority of those wells are owned by small operators, not by a major oil company. It is within reason to also infer that many of these low producing wells are never going to increase their production since they are “played out”; and then to conclude that the operators have not yet abandoned them because of the cost of doing so. When a well operator tells the COGCC that they are going to abandon a well, the well needs to be plugged before the operator can abandon it, i.e. cease to have any legal connection or obligation to it. And to plug a well carries a certain cost. Though it basically means pouring cement down the oil bore and letting it dry, it can be more or less expensive depending on the type of well, how deep it is, and other environmental factors that might entail additional measures.

Long story short, looking at the data carefully seems to indicate that the COGCC has allowed a lot of small operators to keep their played out wells in the “active” category simply because the operators don’t want to declare them to be in need of being plugged before abandoning them. This is, unfortunately, the sad end of allowing an industry to effectively self-regulate itself, going back over seven decades.

Thus, when looking at a range of estimates for plugging a well, there is an all-too-real possibility of the total price tag for plugging all these wells that should have been abandoned before now coming in at something like $7 BILLION! To put that figure in perspective, the 2019-20 state budget was about $32.5 billion; or that for 2021 state population, would be about $1,100 for every man, woman and child in the state.

It is because of this possibility that the COGCC is holding its final phase of rulemaking for SB-181 via public hearings about Financial Assurance during January and February. “Financial Assurance” basically means holding the O&G industry to account for the cost of plugging abandoned wells. See this other blog post for the calendar of events about that, and if you would like to express your opinion. The COGCC would love to hear from you! 🙂

Please keep this in mind as we enter 2022…Happy New Year, everybody!