OWP Reports | Colorado Energy & Carbon Management Commission

FY25 Annual Report Orphaned Well Program

Fiscal Year 2025 Annual Report
Orphaned Well Program
September 8, 2025

Purpose

The Energy & Carbon Management Commission (ECMC), a division within the Colorado Department of Natural Resources, prepared this report to document work performed by the Orphaned Well Program during the State’s Fiscal Year 2025 (or “FY25”), covering the period from July 1, 2024 through June 30, 2025. Commission Rule 205.c.(6) requires the following:

A. The progress on plugging, remediation, and reclamation of orphaned wells and sites as of the end of the previous Fiscal Year on June 30
B. The total number of orphaned wells and sites that are not plugged or closed
C. Total funding received during the previous Fiscal Year
D. Total amount spent during the previous Fiscal Year

As required by rule, the Orphaned Well Program Fiscal Year 2025 Annual Report has been posted online for public access. This FY25 Annual Report summarizes the required progress and financial metrics.

The information contained in this report will also be presented to the Governor and General Assembly Committees of Reference with oversight authority over the ECMC.

Orphaned Well Program Background

For a variety of reasons, oil and gas operators may discontinue operation and maintenance of oil and gas facilities, effectively “orphaning” the facilities. For example, the ECMC may have revoked the operator’s right to operate through an enforcement action. Alternatively, an operator may have voluntarily stopped operating facilities due to its circumstances, which may include the operator’s financial distress. Finally, in some instances, the ECMC is unable to identify the responsible party for “historic” oil and gas facilities. The Orphaned Well Program identifies, prioritizes, and addresses these oil and gas wells, locations, and production facilities statewide, which without intervention may impair a surface owner’s farming or ranching activity or other use of the property, harm wildlife, release air and greenhouse gas emissions, or present a safety hazard to the public.

The Orphaned Well Program closes orphaned sites by:

Plugging wells and abandoning flowlines
Removing production equipment and debris
Investigating and remediating soil and groundwater impacts
Installing safety equipment such as fences, signs, and locks or tags
Reclaiming well pads, remote production sites, and access roads

The legislature first authorized a budget appropriation to plug and abandon historic oil and gas wells for which there is no available financial assurance in the 1990 Legislative Session. Each year through FY24, funding from the Orphaned Well Program appropriation line item in the General Assembly’s “Long Bill” enabled the Commission to perform work at orphaned sites. Historically, the budget appropriation was funded by a production levy and penalty revenues. The production levy is paid by operators on the sales value of oil and gas production. This budget appropriation expired in FY24, but Orphaned Well Program work continued in FY25 with other funding mechanisms described below.

Bond Claims

When the ECMC claims an operator’s bond, that money is reserved for the sole purpose of plugging and/or reclaiming the Orphaned Well or the Orphaned Site to which it pertains. Ordinarily, work does not commence on bond claim sites until funds are collected from the surety company, and bond money is spent before other funding sources. Emergency work is an exception. One of the other funding sources shown below may be used first when addressing emergency conditions.

Enterprise Fund

An Orphan Well Mitigation Enterprise cash fund was established in FY23, and the Orphan Well Mitigation Enterprise board holds an annual meeting each year. The Orphan Well Mitigation Enterprise is funded by annual per-well fees paid by active operators, collected in accordance with Rule 205.c.(3)B, which states:

The Operator will pay the fee for every Well it operates as of December 31 of the previous calendar year. After a Well is Spud, the Operator will pay an annual fee for the Well until it is properly Plugged and Abandoned, subject to an approved Form 6, Well Abandonment Report – Subsequent Report of Abandonment.

The Enterprise funded most of the Orphaned Well Program’s work in FY25 as a result of two factors: First, a temporary slowing of Federal grant spending resulted from a new requirement for Endangered Species Act and National Historic Preservation Act (“ESA-NHPA”) screening prior to breaking ground on orphaned sites. The screening was performed for projects funded by the IIJA Formula Grant Phase 1 Grant described below and resulted in a delay of several months per project. DOI issued new guidance in FY26 that removed the ESA-NHPA screening requirement and will shift spending back towards IIJA grants in FY26. Second, state spending from bond claims and the Enterprise was necessary in FY25 to provide a performance match for ECMC’s FY25 IIJA Matching Grant Application, which is also described below.

Federal IIJA Grants, for work on non-federal sites and wells

The U.S. Department of Interior (DOI) awarded ECMC a $25,000,000 “Initial Grant” on August 25, 2022 through the Bipartisan Infrastructure Law (a.k.a. the Infrastructure Investment and Jobs Act or “IIJA”). Initial Grant spending continued through the first five months of FY25 with field work concluding on November 30, 2024. ECMC closed the Initial Grant in FY25, fully spent.

The DOI awarded ECMC a $25,000,000 “Formula Grant Phase 1” on August 2, 2024 with an effective date of September 1, 2024. Formula Grant Phase 1 field work commenced in FY25 and will continue through FY26. Formula Grant Phase 1 spending was slow to start while the Orphaned Well Program spent out the remainder of the Initial Grant and navigated the new ESA-NHPA screening process.

ECMC submitted an application for a $5,420,764 Formula Grant Phase 2 on September 30, 2024. ECMC revised the application in response to DOI questions on November 19, 2024 and revised the application again in accordance with new DOI guidance on July 25, 2025.

ECMC submitted an application for a $29,064,506 Formula Grant Phase 2 on December 13, 2024 and revised the application in accordance with new DOI guidance on July 25, 2025.

Federal BLM Grants, for work on federal sites and wells

The Colorado state office of the DOI Bureau of Land Management (BLM) awarded ECMC a $1,358,963 five-year grant on September 7, 2023 with the same effective date. Orphaned Well Program Staff worked with BLM to select federal sites in FY24, and field work commenced in FY25, including the plugging of three wells in Rio Blanco County and decommissioning of an equipment storage yard with a tank battery in Mesa County.

ECMC submitted a response to a directed announcement from DOI to update the BLM Grant on February 19, 2024. If awarded, the proposal will increase the BLM Grant total to $5,000,000.

Program Staff

Program staff salaries, benefits, and the administrative overhead for the Orphaned Well Program were covered by ECMC’s personnel budget, the Orphaned Well Mitigation Enterprise, and administrative cost allowances in federal grants. Program staff averaged 13 full-time technical employees in FY25.

The OWP commenced hiring through an expanded program structure in FY25, filling a new supervisor position and three senior technical positions, all internal promotions. ECMC delayed hiring for backfill positions and new term-limited technical positions as a result of uncertainty over federal grant funding with a change of the federal administration. Hiring for these positions resumed at the end of FY25, and the Orphaned Well Program expects to be fully staffed at a higher level with 19 full-time technical employees in FY26. The IIJA grants also funded support staff and indirect costs from the Colorado Department of Natural Resources for grant administration.

FY25 Expenditure Trends by Funding Source

ECMC retained the services of more than 30 contractors in FY25. Comparing contract costs from FY24 to FY25, spending from all funding sources increased, except for Federal IIJA expenditures:

Bond expenditures increased from $767,371 to $834,026
Orphan Well Mitigation Enterprise increased from $242,949 to $8,113,338
Federal IIJA grant program expenditures decreased from $10,136,116 to $5,872,956
Federal BLM grant program expenditures increased from zero to $509,637

FY25 bond spending and Enterprise spending were both all-time highs for the program. FY25 was the first year of contractual spending for the BLM grant.

Fiscal Year 2025 Program Metrics

Table 1
For orphaned sites with work performed in FY25, Table 1 summarizes tasks by the county where the work was performed, the project and task name, the task status, and the site status. The site status complements the site list found in Table 4. Entries on Table 1 are grouped by site where more than one task was performed in FY25. “In Progress” tasks may have commenced in a prior fiscal year and may have work extending into future fiscal years. Small projects may contain one or more tasks for a single well, while large projects may consist of multiple tasks at many different orphaned sites throughout the state.

The following work categories correspond to work types shown in the Project and Task Name data field:

PLUG represents well plugging and related activities, including wellsite access, environmental sampling at the wellhead, laboratory analysis, and methane monitoring
OFFL represents off-location flowline abandonment and related activities, and environmental sampling and analysis
DCOM represents equipment decommissioning activities, including production equipment removal, on-location flowline abandonment and environmental sampling and analysis
ESAM represents environmental sampling and analysis that is not otherwise included with PLUG, OFFL, or DCOM work
EREM represents environmental remediation
RECL represents surface reclamation, stormwater controls, and weed management
OTHR represents other work not specified above

FY25 Work Progress - Rule 205.c.(6)A

During FY25, Orphaned Well Program staff, contractors, and three oil and gas operators performed field work at orphaned sites belonging to 62 separate projects, including 21 historic projects and 41 bond claims. Project work was subdivided into 690 discrete tasks related to plugging, equipment removal, environmental sampling and remediation, reclamation, or field inspections for site closure at 624 orphaned sites. Three other tasks were related to field-wide or statewide work on multiple orphaned sites. Work included plugging 95 orphaned wells and off-location flowline abandonment or production equipment decommissioning at 146 facilities.

Table 2
For bond claim projects that had FY25 expenditures, Table 2 summarizes historical bond claim financial information, including FY25 expenditures and available sureties remaining at the end of FY25.

Table 3
For active FY25 bond claim and historic Orphaned Well Program work, Table 3 summarizes project expenditures by funding source.

FY25 Program Funding and Spending - Rule 205.c.(6)C and D

FY25 Project expenditures reached an all time high of $15,329,957.

$ 834,026 from Bond Claims
$ 8,113,338 from the Orphan Well Mitigation Enterprise
$ 5,872,956 from the IIJA Initial Grant and the IIJA Formula Grant Phase 1
$ 509,637 from the BLM Grant

Costs for work performed by federal agencies on federal leases and work performed at Orphaned sites by operators are not included in the annual expenditure totals above.

For the total program effort in FY25, approximately 64 percent of the project spending was related to production equipment decommissioning (disconnection, removal, and disposal or salvage), plugging or other well work, methane monitoring, and flowline abandonment; 16 percent was related to environmental sampling, laboratory analysis, and remediation; and 20 percent was related to surface reclamation.

Prioritized Site List

Table 4
Orphaned sites are grouped by Location ID into low, medium, and high priority categories based on multiple risk factors, including population density and urbanization; environmental factors; years in service; active and historic spills; stormwater issues; noxious weeds; wildlife, livestock, or vegetation impacts; surface equipment; bradenhead pressure; mechanical integrity test data; and any documented history of venting or leaking.

Site List and count of unplugged wells - Rule 205.c.(6)B

Table 4 is OWP’s Annual Site List, which includes a total of 1,897 orphaned sites with 948 orphaned wells that are not plugged and abandoned or otherwise closed per ECMC rules as of July 1, 2025. The Annual Site List excludes sites and wells with federal or tribal jurisdiction for the surface or mineral ownership.

Prior Year Annual Reports: