Environment

Environmental groups target Jared Polis with six-figure ad buy

Four liberal-leaning nonprofits will spend $100,000 north on an advertising campaign starting this week to pressure Democratic Governor Jared Polis and the Colorado Oil and Gas Rationalization Commission to force the oil and gas industry to allocate millions of dollars to clean up abandoned and orphaned wells.

“Gov. Polis, we count on your management,” says the narrator of a TV ad being paid for by the Sierra Club, ProgressNow Colorado, the influential Colorados Oil and Gas Association, and Colorado Rising.

A spokesperson for the coalition declined to say how much it would spend on radio, digital, TV ads and a billboard in downtown Denver, but the figure was at least six figures. TV ads will be broadcast on stations including CNN, MSNBC, and CNBC.

The groups behind the ad campaign also launched a website – protectcoloradotaxpayers.com – as part of the initiative. They claim that if the Cabinet and Tax Coordination Committee did not enforce prepayment rules, taxpayers might be in trouble for the cost of cleaning up abandoned oil and gas wells.

“We depend on the Polis administration to hold the oil and gas industry accountable and force it to plan to clean up its $8 billion worth of mess,” Alan Franklin, Colorado’s political director for ProgressNow, said in a written statement.

The ad campaign is noteworthy because the Sierra Club, ProgressNow Colorado, and LOGIC Colorado Rising are groups traditionally allied with Democrats. In fact, Polis was one of the founding board members of ProgressNow Colorado, and former Democratic state Rep. Jonathan Singer was recently appointed CEO of the Colorado Oil and Gas Association, better known as LOGIC.

“We’re going to run and spend whatever we need to on this,” said Lauren Petrie, interim CEO of Colorado Rising. “We have just started with this educational campaign.”

The campaign also comes as Polis, who has faced criticism from some in the environmental community as being weak on climate change, prepares for a push for re-election this year.

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The governor’s office did not immediately respond to a request for comment.

The governor and Democrats in the legislature have set ambitious targets for reducing greenhouse gases, including those aimed at reducing pollution by the oil and gas industry.

Significant reductions in methane pollution from the oil and gas industry, the state’s largest source of non-combustion emissions, are needed to meet the Polis administration’s roadmap.

In 2019, new legislation changed the mission of the Colorado Oil and Gas Conservation Commission from promoting oil and gas development to protecting health, safety, and welfare. This bill, Senate Bill 181, also required the agency to strengthen its financial guarantee rules to prevent the state from being burdened with cleaning a large number of orphaned wells, or those without a solvent owner.

The latest version of COGCC’s draft rules will be the focus of hearings scheduled to begin on January 20 and will require operators to publish larger bonds and request more information about low-production wells that are trading.

Currently, operators must post a plug-and-clean bond of $10,000 or $20,000 per well, or an umbrella bond of $60,000 for 100 wells or less and a $100,000 bond for 100 or more wells.

Environmentalists have long said these amounts are too low, and the Construction and Construction Coordination Center (COGCC) has estimated the cost of connection and cleaning to be up to $82,000 per well.

“We were really disappointed with what we’ve seen so far,” Petrie said, with Colorado Rising. There is no indication that the governor or the state agencies he has appointed will hold the industry to account. Democrat or Republican, we want to make sure taxpayers don’t pick up on this massive trillion dollar industry bill. These companies should be able to clean up after themselves. If they can’t, they shouldn’t be excavating in the first place.”

The Ranger Energy Services maintenance platform is photographed during deliveries and abandonment at an oil and gas extraction well in Lafayette on August 3, 2021. (Andy Colwell, exclusive to the Colorado Sun)

Small businesses said the proposed versions of the rules would tie their working capital into bonds, cripple their business model and potentially drive operators out of business.

Dan Haley, president of the Colorado Oil and Gas Association, said last year that an initial draft requiring a $78,000 bond per well, for example, would have created “the most expensive financial security base in the country.”

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The commission in November softened an earlier draft of rules that defined inactive and low-production wells – seen as orphan wells risk assessment metrics – and set a dollar value for dam each of the roughly 52,000 wells.

Industry advocates say Colorado has a relatively low number of orphaned wells, less than 500 compared to the potential hundreds of thousands in Pennsylvania, according to a 2021 report from the Interstate Oil and Gas Agreement Commission.

A 2021 GCC report found 236 orphan wells and 547 associated orphan sites in the state. That number nearly doubled in October, when the commission voted to seize about 200 wells from five stalled or non-responding operators.

A government-funded program of fines and fees for oil and gas operators covered the cost of cleaning up orphaned wells in the state. The draft rules require companies to pay a $200 per year registration fee per well to repair orphan well sites.

Abandoned wells run the risk of leaking methane, a potent greenhouse gas, or chemicals if left unconnected. In 2017, a home in a Firestone neighborhood was destroyed and two people were killed in an explosion after gas from a cut oil field line leaked into the basement and caught fire.

While the Governmental Coordination Committee of the Cooperation Council for the Arab States of the Gulf operates independently of the Polis, its members are appointed by the Governor.

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