Colorado orphan wells: Fewer drillers, higher fees and a fund stuck under $6.3 million

By Cory Gaines | Commentary, Colorado Accountability Project

The Colorado Sun article linked at bottom got a rueful chuckle out of me. Let me quote a couple passages:

“After federal funds run out in 2030, the orphan well program will have to depend upon the [state] mitigation fees and the bonds seized from defunct operators. To get a drilling permit, an operator has to put up a bond for plugging and remediation, but historically these have been far less than the $100,000 state average for plugging and remediating a site.”

and 

“In 2026, bonds claimed by the ECMC made up just $949,000 of the program’s money. The orphan well mitigation enterprise fund’s goal is to generate $10 million a year, but in 2026 it produced a little under $6.3 million. The main reason was that there are fewer and fewer operating wells in Colorado to charge the per-well fee. In 2022 there were 45,000 operating wells in the state, by 2026 that had dropped to 37,360 and the ECMC projects the well count will dip to 31,961 in 2031. The decline in operating wells led to the increase in the per-well fees, but as federal funding runs out the total financing of the program, which aims to spend $30 million a year, will fall on the fees and bonds.”

lastly

“’We’re starting to see a cooling off in folks that are interested in spending capital in the state, and we’ve seen a decline in the number of permits that are being submitted,’ said Lynn Granger, CEO of the Colorado Oil and Gas Association, an industry trade group. A prime reason Granger said, is the extensive regulations that have been adopted over several years.”

Let’s be clear. I don’t think anyone is arguing that we should leave abandoned oil wells (and associated infrastructure) be. I’m also okay with a bond on operators to ensure cleanup, as well as a fee. 

Neither of those things are the point. The point is larger and not necessarily just about oil and gas.

This is a great example of the bind the Democrats running this state have put us in. In addition to nationalizing state costs (and putting us in a bind when Federal money runs out or disappears), they’ve made Colorado trip over its own feet.

On the one hand, they’ve regulated certain industries out of existence to please their environmentalist paymasters, and they’ve done this while completely ignoring the reality that there are lots of things that industry is paying for in this state. The bonds are there, sure, but if you expect current business to pay to deal with orphan wells via fees what happens if they leave the state and/or don’t start new operations?

You get a hint from one of the quotes above. I’ll excerpt: “The decline in operating wells led to the increase in the per-well fees”.**

Everyone left here pays more. And this ain’t just oil and gas companies either. This applies to us all because the situation here is not unique. There are lots of things funded by fees, and there is lots of revenue that comes to the state via business taxes. 

Without a significant turnaround, I bet you we’ll see this more and more. 

**I see things like this and can’t for the life of me understand the kind of reasoning involved. Do those running the state figure that you can squeeze a business forever and have it keep coming back for more and more? Do they not understand the basics of capitalism–that it’s based on voluntary transactions? Do they not understand that the other player in the game can always get up and leave the table?

https://coloradosun.com/2026/11/03/orphan-oil-and-gas-wells-colorado-record-number-funding/

READ THE FULL COMMENTARY AT COLORADO ACCOUNTABILITY PROJECT

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