Tim Gaylord: Taxpayers are left to clean up orphan oil and gas wells

Abandoned wells damage public lands and the outdoor recreation economy.

Trent Nelson | The Salt Lake Tribune A BLM sign competes with oil wells for attention along the Nine Mile Canyon National Backcountry Byway in Duchesne County, Tuesday January 19, 2016.

Most of us here in Utah value the incredible outdoor experiences available to us right here at home. And because it is our home we take pride in taking care of the places we play. As a long-time river runner, we keep our camps clean because we know we will be back soon.

Sadly our oil and gas developers, many of whom are from out of state, do not share our values. Instead, too many of the oil and gas companies operating in Utah tend to exploit antiquated federal leasing policies that allow them to leave the land much worse than they found it. Utah is on track to inherit a growing number of orphaned oil wells on our public lands. These un-restored sites will affect our opportunity to expand recreation in the counties that need it the most — both to attract visitors and to attract business investment.

Our business, Holiday River Expeditions, relies on the accessibility of Utah’s world-renowned public lands. But a new report from Public Land Solutions (PLS) and National Wildlife Federation (NWF) reveals that Utah has not been shielded from the growing orphaned well crisis across the country, which poses a serious threat to the future of public lands, wildlife, recreation and rural economies.

Orphaned wells occur when a company skips town without reclaiming the land they drilled — often because they declared bankruptcy — leaving the mess behind for states, taxpayers and private landowners. NWF and PLS found that there are currently at least 8,050 wells on federal lands in Utah, Colorado, Montana, New Mexico and Wyoming that are orphaned or at risk of being orphaned. Because the report focuses on wells that haven’t been active in at least five years, the actual number of at-risk wells is likely much greater, and growing by the day as more companies go bankrupt due to poor market conditions brought on by the COVID-19 pandemic.

In recent years, Western communities have tapped into their public lands for sustainable activities like recreation, and in Utah outdoor recreation now generates $737 million in state and local tax revenue and supports 83,000 jobs. But orphaned wells leak methane into the air and pollute groundwater, threaten public health and can seriously degrade nearby recreation assets like rivers and trails.

PLS and NWF’s report found that there are 446 total at-risk wells in Utah, with 22 wells within one mile of recreation sites and 100 wells in big game crucial winter range. Instead of caring for our public lands so that they can be shared and utilized for other activities once they are finished drilling, oil and gas companies are forgoing their responsibilities and putting local recreation economies at risk.

Before a company can drill on public lands, they are required to put down a bond that should cover the cost of cleaning up oil well sites if the company were to go bankrupt. But the federal government’s bonding rates are more than 60 years old and do not account for inflation and the sprawling impacts of modern oil and gas drilling. In 2016, it was estimated that current reclamation costs for federal wells were roughly $6.1 billion, but as of 2019, the Bureau of Land Management only held about $204 million in bonds. As a result, taxpayers could be left to cover this widening, multi-billion dollar gap.

But it is not too late to fix this problem. Several common-sense solutions have recently been proposed in Congress, while the Biden administration is already moving forward with a top-to-bottom process for the federal leasing system.

In Congress, Rep. Alan Lowenthal has introduced a bill to raise the federal bonding rates and hold oil and gas companies accountable for cleaning up oil well sites, and Rep. Teresa Leger Fernández recently introduced a bill to fund the cleanup of orphaned wells and strengthen federal bonding requirements in order to prevent future orphaned wells.

Colorado’s Sen. Michael Bennet introduced a bill last Congress that would provide funding to states so that they can hire workers to clean up toxic orphaned wells immediately. In addition to this legislation, the Department of the Interior held a public forum at the end of March to evaluate how to best update the federal leasing system, and heard from a diverse array of voices, including many public land and conservation experts, who emphasized the urgent need to strengthen federal oil and gas bonds and take action against companies that are not cleaning up after themselves.

Our public lands are irreplaceable, and they deserve to be treated as such. Right now, the Biden administration has a chance to demonstrate what it means to be a responsible steward of public lands, and remind all of us, oil and gas companies included, to leave our land better than we found it.

By reviewing and reforming the federal leasing system, the Biden administration can protect our unparalleled landscapes and the outdoor recreation opportunities that are a critical component of Utah’s economic success.

Tim Gaylord | director of operations for Holiday River Expeditions, Salt Lake City

Tim Gaylord is the director of operations for Holiday River Expeditions in Salt Lake City.