Category Archives: Financial Assurance

background on new year fundraising campaign to fund legal counsel

NEW YEAR FUNDRAISER CONTINUES

LARIMER ALLIANCE IS STILL WORKING TO HELP FUND THE LAWYERS ADVOCATING WITH US FOR BETTER FINANCIAL ASSURANCES RULEMAKING AT THE COGCC

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

https://www.kunc.org/show/kuncs-colorado-edition/2021-11-19/plugging-up-the-problem-of-colorados-orphan-wells

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!

Financial Assurance Hearings at the COGCC – A CRUCIAL STEP

The Financial Assurances rulings coming up in January and February of 2022 represent a crucial crossroads in statewide efforts to require responsible behavior from oil and gas operators. It’s not really too complex. What we are asking of the industry is the same basic life lesson that we all learned as children: if you make a mess, you clean it up! Unfortunately, the draft proposal, provided by COGCC staff to the commissioners, takes this simple idea and twists into a byzantine labyrinth that will provide O&G operators multiple options for gaming the system, leaving clean-up to the tax-payer.

Therefore, we are asking the COGCC to approve regulations that would require full cost bonding on all new wells, all transferred wells, and on all existing wells over a reasonable timeline. Wells on BLM land should be included in all of the above. And bonding should cover both plugging and reclamation costs.

UP-COMING OPPORTUNITIES

January 20-21
1. Financial Assurance Rulemaking, Docket No. 210600097
1. Staff Presentation
2. Public Comment

January 25-28
1. Party Presentations Financial Assurance Rulemaking, Docket No. 210600097
2. Consent Agenda will be heard on 1/26

February 2-3
1. Party Final Presentations Financial Assurance Rulemaking, Docket No. 210600097
2. Consent Agenda will be heard on 2/2

February 7
1. Commissioner Deliberations Financial Assurance Rulemaking, Docket No. 210600097

February 9
1. Commissioner Comments
2. Public Comment
3. Consent Agenda

February 16 – Evening Hearing, starts at 6pm
1. Commissioner Comments
2. Public Comment

February 23
1. Commissioner Comments
2. Public Comment
(From the COGCC website under Tentative Commission Hearing Agendas. https://cogcc.state.co.us/hearings.html#/overview)

PREPARE YOUR COMMENT

Sign-up forms for the February meetings are not yet active, but there is plenty of time to begin preparing a statement. Remember, the outcome of this ruling will have significant consequences for Colorado into the foreseeable future. Our current system encourages operators to leave low producing wells sitting in the fields where they continue to emit methane and other toxins into the air. According to a Nov. 26 article in the Colorado Sun, “out of the approximately 52,000 wells on the books at the Colorado Oil and Gas Conservation Commission, 36,930 produce less than the equivalent of 15 barrels of oil a day. Of those, 17,285 produce less than 1 barrel.” These low producing wells amount to 71% of the wells in Colorado. All wells will eventually have to be plugged abandoned. If the operators don’t pay for it, then those costs will be left to the state.

Below is an excerpt from the comment I made in the Nov. 9, 2021 meeting of the COGCC:


I would like to begin by reading a quote from a previous COGCC meeting in which the following statement was made by a commissioner:


“We should not be held hostage to operators who can’t afford to do business in the state. If they can’t discharge their responsibilities to maintain their wells, they shouldn’t be approved to operate here. There should be some element of financial responsibility that’s required.”


I couldn’t agree more.
That meeting took place on March 19, 2018. Three and a half years ago. Three and a half years have gone by, and although SB-181 has given us a new legal framework which was not available to commissioners at that time, we’re still being “held hostage to operators who can’t afford to do business in the state.” Meanwhile, the COGCC continues to approve applications for more wells…and more and more operators — who have no financial incentive to do otherwise — and allow wells that should be properly plugged to spew emissions into the atmosphere. We’re talking about tens of thousands of low-producing wells–with little to no profitability…little to no contribution to energy demand — adding nitrous oxides, methane and other pollutants to the atmosphere…day after day after day.


Three and a half years have passed and we are still being held hostage.
All this within the context of a global climate emergency, in which Colorado plays a significant role. A climate emergency in which we have very little time to make the bold changes that are needed.

I ask that you require full cost bonding—full cost bonding on all new wells, all transferred wells, and on all existing wells over a reasonable timeline—if you will do that, then three and a half years from now we’ll be in a much better place.