WELCOME TO ECMC'S NEW WEBSITE! PLEASE SHARE YOUR FEEDBACK ABOUT THE NEW SITE WITH US.

 
0
Oil Field 14

Methane Emissions Reduction Program (MERP)

The Colorado Energy and Carbon Management Commission (ECMC) is excited to announce the Colorado Methane Emissions Reduction Program (MERP) Grant. This initiative will provide federal funding to assist well owners and operators in identifying and eliminating methane emissions from low-producing marginal wells by supporting the voluntary permanent plugging and reclamation of these wells.

In August 2022, the Inflation Reduction Act (Section 60113) granted new authority under the Clean Air Act, Section 136, to reduce methane emissions from oil and gas operations through the establishment of the Methane Emissions Reduction Program (MERP). Under this program, $350 million in formula grant funding was allocated to 14 states to help measure and reduce methane emissions from marginal wells.

ECMC is proud to be a recipient of $12.6 million of this federal funding, which will be used to create the Colorado Methane Emissions Reduction Program (MERP) Grant. This grant provides federal funds to eligible applicants who meet both federal and state requirements.

A Marginal Conventional Well (MCW) is defined by the IRS as an Idle or producing onshore vertical or slightly deviated oil or natural gas well (excludes highly deviated or horizontal wells), with a known owner/operator, producing less than or equal to 15 barrels of oil equivalent per day (BOED) and/or 90 thousand cubic feet (Mcf) gas per day (1 BOE = 6 Mcf) over the prior 12-month period.

  • To be eligible for this funding, an operator must be in compliance with statutory and regulatory requirements. If you are interested in obtaining funds and are currently unsure of your compliance status, contact ECMC as soon as possible for help determining eligibility prior to applying for funding. Please send any questions regarding compliance to dnr_marginalwellplugging@state.co.us.

  • The MERP Grant Application will open on April 4, 2025 and close on May 20, 2025. Complete applications will be prioritized. Please view the “Well Prioritization” section of this page for more information about the application prioritization process.
    The Grant Application and guidance are available on the Marginal Wells page.

  • Applicants will be required to provide the well site information needed to assess each proposed project based upon the prioritization criteria (See Well Prioritization Process below). Applications for eligible projects will be evaluated and scored in accordance with the prioritization criteria.
  • To ensure your application is complete, refer to the MERP Application Guidance.

  • The primary goal of prioritization will focus on maximizing the amount of methane emissions mitigated. The prioritization process will include, but not be limited to, the consideration of the impact of plugging and abandoning a qualifying well on the following criteria:
    • Methane and other emissions, with priority given to the higher methane emitters based on pre-existing data or initial screening of methane emissions
    • Proximity to disproportionately impacted communities as identified by Colorado EnviroScreen 2.0, with priority assigned to wells closest to disproportionately impacted communities
    • Location of the MCW on Tribal land, with priority assigned to wells located on Tribal Land
    • Current production rates at the MCW
    • Potential beneficial impacts of well plugging on small businesses based on the number of wells operated by owner, with priority assigned to lower number of wells operated
    • Potential impacts on surface and groundwater quality and flood resilience
    • Potential climate and human health impacts
    • Potential risk of the well becoming orphaned if not plugged
    • Potential post-plugging land use
  • The MERP application prioritization process will be used to ensure that MERP grant funds are efficiently used to maximize methane mitigation and benefits to human health and the environment.
  • Applicants will be required to provide the well site information needed to assess each proposed project based upon the prioritization criteria listed above. Applications for eligible projects will be evaluated and scored in accordance with the prioritization criteria. Project scores and ranking will be based upon verification of the representations made in the application at the time of application submission.
  • Once the application period has closed, ECMC will complete the scoring and ranking of all eligible applications.

  • Measurement of methane emissions before and after well plugging activities will be required for all selected wells and will follow a methane measurement plan that is based on the Department of Energy guidelines (see below)
  • DOE NETL METHANE MEASUREMENT GUIDELINES FOR MARGINAL CONVENTIONAL WELLS
  • MERP funding will cover the measurement of methane emissions before and after well plugging activities and will be conducted by an approved contractor.

  • The federal Inflation Reduction Act (IRA) provides new authorities under Section 136 of the Clean Air Act to reduce methane emissions from the petroleum and natural gas sector through the creation of the Methane Emissions Reduction Program (MERP). Nationwide, MERP will provide more than $1 billion in financial funding for grants and other activities to reduce methane.
  • The Colorado Energy and Carbon Management Commission (ECMC) received $12.6 million of this funding, and it will be used to provide grants to conventional well operators to plug marginal conventional wells

  • More information coming soon

For more information, please reach out via email to dnr_marginalwellplugging@state.co.us.