Denver, CO (Dec. 14, 2022) - The Colorado Department of Natural Resources’ Orphan Wells Mitigation Enterprise Board, created by SB22-198 to develop an industry-funded Enterprise to clean up orphaned oil and gas wells and sites, held its first hearing on Tuesday, Dec. 13.
At the hearing, Orphan Wells Mitigation Enterprise Board Chair Jeff Robbins provided an overview of the duties assigned to the Board from the legislation. The statute states the purposes of the Orphaned Wells Mitigation Enterprise are the following:
- (I) IMPOSING AND COLLECTING MITIGATION FEES;
- (II) FUNDING THE PLUGGING, RECLAIMING, AND REMEDIATING OF ORPHANED WELLS IN THE STATE;
- (III) ENSURING THAT THE COSTS ASSOCIATED WITH PLUGGING, RECLAIMING, AND REMEDIATING ORPHANED WELLS ARE BORNE BY OPERATORS IN THE FORM OF MITIGATION FEES; AND
- (IV) DETERMINING THE AMOUNT OF MITIGATION FEES.
The Enterprise Board is required to meet at least once a year and to determine if the fee amount collected from operators to fund the Enterprise should be adjusted. If the Board chooses to have a fee adjustment, it would then require a hearing to be conducted as Rulemaking under the Colorado Administrative Procedures Act.
At the Dec. 13th hearing, it was determined by the Board that no action would be taken this year and they will meet following the Sept. 1, 2023, release of the COGCC Orphaned Well Program (OWP) Annual Report. The Board will use the OWP’s Annual Report to inform possible next steps. The next hearing will be set in late September 2023, following the issuance of the OWP annual report.
“I am proud that Colorado has created the Orphan Wells Mitigation Enterprise to ensure that orphaned oil and gas sites can be cleaned up and safely returned to their communities for their use,” said Chair Jeff Robbins. “This innovative industry-funded mechanism will be instrumental in helping reduce harmful emissions and protecting public health, safety, wildlife and the environment.”
About the Orphan Wells Mitigation Fee Enterprise:
The Orphan Wells Mitigation Fee Enterprise was created during the 2022 COGCC Financial Assurance rulemaking, and then enacted by SB22-198 to assess annually a per well permit fee by the oil and gas operators to fund the Enterprise.
The initial fees were $225 per well for Operators with an average daily per well production greater than 15 BOE or 22 MCFE for the previous calendar year; and $125 for Operators with an average daily per well production less than or equal to 15 BOE or 22 MCFE for the previous calendar year. The first registration fee was due in August of 2022 and the next registration payment will be due in April of 2023, with April being the on-going registration date for Operators. The current balance of the Orphan Wells Mitigation Fee Enterprise Fund is around $9 Million.
To learn more about the Orphan Wells Mitigation Enterprise Board, visit the ECMC website.