Oil and gas companies have yet to fully restore land around half of the 47,505 inactive wells in Colorado, and 72 percent of those un-restored sites have been in the process for more than five years, The Denver Post has found.
The state requires oil and gas companies to restore all sites completely — to reduce erosion, loosen compacted soil, prevent dust storms and control invasions of noxious weeds.
But Colorado does not set a timetable for getting the job done. Nor do state regulators track how long companies take to complete required work.
And unlike other states, Colorado does not require companies to submit reclamation plans before drilling.
The result is a worsening problem of damage from the oil and gas boom. On Friday, Colorado Oil and Gas Conservation Commission chairman Thomas Compton said he would like to consider improving state rules.
The lags in land restoration reflected in state data “are probably not acceptable,” Compton said. “It may mean we need to step up our game.”
In particular, he favored requiring companies to submit reclamation plans in advance. Surface landowners would have to have opportunities to shape those plans, he said. Such plans would help spur proper reclamation done according to a timetable — “as long as the timetable is reasonable and allows for some sort of disruption short-term and long-term as far as what the weather patterns are.”
MAP: Colorado’s inactive wells
On Monday, the COGCC plans to review a Colorado Prairie Initiative from a group of law students proposing tougher rules for restoring damaged land.
The imprint of the oil boom statewide “is a very large area,” said Colorado State University ecology professor Mark Paschke, the associate dean for natural resources research. “We need to do a better job of getting our heads wrapped around how we need to reclaim these sites.”
“(Restoring land) is not rocket science. But, in a lot of cases, we could do a better job than what we do now,” Paschke said.
Fully re-establishing the cropland in heavily drilled areas such as Weld County “should go a lot faster, one or two years. You’re just dealing with fixing the soil issues, bringing in topsoil, maybe fertilizer,” he said. “If it’s noncrop land where you want to get pasture grasses established, you should be able to do that in two or three years. If it is native prairie, that’s when things get tricky and require longer time frames.”
Colorado faces multiple challenges in trying to manage the environmental harm. Foremost, oil and gas companies are drilling more wells each year, pushing the number of active wells past 53,000 around the state, the nation’s seventh-largest oil and sixth-largest gas producer. Companies also can shut active wells temporarily in response to decreasing prices for oil and gas, complicating oversight. And companies occasionally abandon their sites, leaving what state regulators call “orphan wells.”
Land restoration falls to the state when well owners can’t be located — as at most of the 83 sites that regulators know about today.
“It obviously is challenging,” said Matt Lepore, executive director of the COGCC, which is charged with ensuring orderly extraction of resources while protecting public health and the environment. “I don’t have a good answer for why we don’t track it. There are a lot of data points we could track. … We have limited resources for information technology.”
He acknowledged that companies often do not fully restore land for years after wells stop producing. He also defended the state’s oversight as adequate.
“There are different ways to skin a cat. Sure, we could have a rule change. What would that accomplish?” Lepore said. “Maybe if we start whacking operators with enforcement? There are some that are probably not bringing the resources to bear as they should. There are others where it wouldn’t make a lick of difference.”
Industry officials point to the difficulty of restoring land in a semi-arid region where soil is weak and conditions often dry.
“We’re at the mercy of the moisture we get,” said Bryan Whiteley, a landscape architect who directs land restoration work on Colorado’s Western Slope for Encana.
Advance planning is crucial, “and good reclamation requires management,” Whiteley said. “You have to steward that landscape.”
For companies, restoring damaged land looms as a rising cost. An Encana spokesman said the company is spending millions a year on materials, such as mulch, environmental consultants and machinery.
Colorado Oil and Gas Association president Tisha Schuller said the industry follows state rules and is looking for ways to improve. “Reclamation,” Schuller said, “is a really important part of oil and gas development and closure.”
Restoration of land
Colorado’s rules set a standard: Companies must restore land “as nearly as practicable to its condition at the commencement of drilling operations.”
The rules give companies a time frame for starting land restoration. Companies have to begin “interim reclamation” — recontouring, reseeding, erosion-control, weed-fighting — three to 12 months after finishing fracking, the hydraulic-fracturing process used to accelerate extraction of oil and gas, while wells are still producing.
Certain site-cleanup tasks, such as removing equipment and debris, must be done within a year after a well stops producing. The state collects financial assurance money from companies — $10,000 to $20,000 per well or a $60,000 to $100,000 blanket covering unlimited wells statewide — which isn’t returned until sites pass an inspection.
But the COGCC sets no time limits for finishing either the interim or final restoration.
Compared with those of other oil-producing states, Colorado’s rules are comprehensive but in some ways not as strict, according to a comparative law database developed by the University of Colorado law school’s Getches-Wilkinson Center for Natural Resources, Energy and the En vi- ronment.
North Dakota, Pennsylvania, Ohio, Utah and West Virginia require companies to submit reclamation plans before drilling. Colorado does not. The amount of financial assurance money that Colorado requires, while on par with other states, is half what North Dakota requires. North Dakota requires companies to deposit $50,000 per well.
Meanwhile in Colorado, companies dispute whether state reclamation rules even apply if companies make private surface use agreements, or SUAs, with landowners — a common practice along the Front Range.
“SUAs trump the COGCC,” Noble Energy spokesman Steven Silvers said.
COGCC director Lepore argued the opposite: “Our rules trump a surface-use agreement.” For example, if a landowner agrees with a company to keep an access road after an oil well is plugged, the state still would have to grant permission, Lepore said.
This disagreement between industry and the state has not been resolved.
Policing themselves
In practice, Colorado relies heavily on companies policing themselves.
The COGCC had only two inspectors looking at land damage until last March, when the agency hired three more after lawmakers provided funds. And the COGCC rarely imposes fines. Instead, regulators say they try to work cooperatively in the interest of getting things done.
But full restoration — including revegetation, cross-ripping of compacted soil, erosion control and eradication of weeds — often lags for years after oil production is done.
Land around 23,785 of the 47,505 inactive wells remains in the process of restoration, according to state data analyzed by The Post. At those sites, 83 percent of the wells have been inactive for more than three years, the data show.
Oil and gas companies have completed restoration of land around 23,721 inactive wells. Over the past five years, state inspectors signed off on final reclamation at 3,380 sites, according to a COGCC table.
Colorado regulators cannot reasonably expect companies to restore land with enough plant coverage to pass final inspection in a single growing season, especially on dry land, where much of the the oil and gas drilling occurs, COGCC spokesman Todd Hartman said. “In fact, often, multiple growing seasons are necessary.”
State inspectors have visited 96 percent of well sites where production has stopped and where restoration must be completed, Hartman said. The inspectors issued notices where they found problems — six in 2014 and 10 in 2013, Hartman said.
The COGCC provided two examples of how notices can lead to tougher enforcement against companies. The state’s enforcement records could not be searched for reclamation violations, Hartman said, blaming technical deficiencies.
In 2013, the COGCC followed a June 26 notice with a $20,000 fine in October against Thomas Spring LLC for failing to restore what an inspector, responding to a landowner complaint, found to be a barren, eroding site in Kiowa County. That penalty was mostly suspended after the company agreed to fully restore land as required. COGCC staff met with company officials in September because they said additional work was needed.
In 2003, the company capped the well, which never produced oil or gas, company president Thomas Spring said.
“We reclaimed the site once. But because of the drought, and the cows tearing it up, it got to be a sandy knoll again,” Spring said. Work crews last year fenced the area and reseeded again.
“It’s still pending. If we get some rain out there, everything should be fine by the end of next year. It is very arid. It is basically on a sand dune,” he said, acknowledging that the COGCC fine spurred action. “I will probably never drill another well in Colorado. Too stringent for me.”
In 2012, COGCC cited EOG Resources alleging failure to reclaim land no longer needed for production in Weld County. This led to cooperation with state inspectors to revegetate and restore the area, averting a fine.
The COGCC couldn’t give another example of the state penalizing a company for breaking the rules.
But restoring oil and gas sites as closely as possible to how they were before drilling is important to the COGCC and for the environment, Hartman said. Colorado now has more reclamation inspectors, he emphasized, “and we continue to demand that sites meet our reclamation standards before we give final approval.”
COGCC director Lepore considered the possibility of a tougher approach with time limits.
“So, we could say three years? Or, instead of a bright line, we could have a standard where reclamation is complete when we think it is complete?” Lepore said. “Doing what we are doing now, which is staying on top of it until it comes to a point where it seems to us they have failed, whether that is a year or three years, to me, gets to what we want, which is for the ground actually to be reclaimed.”
The COGCC lets companies declare “shut-in” status, temporarily placing active wells on hold, in response to declining demand for oil and gas. State regulators don’t count shut-ins as inactive, so companies can delay work toward final restoration. Companies still are expected to begin restoration on surrounding land after fracking.
Oil and gas companies last fall had declared 2,361 of the active wells “shut-ins,” state data show, with the shut-ins remaining in that status for, on average, three years.
State officials said they haven’t seen evidence of companies exploiting shut-in status to avoid or delay full restoration.
The COGCC acknowledged that orphan wells, deserted by owners, loom as a difficult challenge.
A “Current Orphan Wells to be Plugged List” identifies 39 planned projects to properly close old bore holes. A separate list details 44 more orphan sites where land has not been restored. Financial assurance money isn’t available to cover costs at most of these sites because owners could not be located or the wells are older than state rules. An emergency fund drawn from industry fees must be tapped.
Environmentalists accuse state regulators of neglect.
Colorado oil and gas commissioners in 2007 were alerted by advocacy groups that companies lag in restoring land. “They put it in the parking lot, saying we as a commission will come back to address reclamation. It got parked and parked,” said Bruce Baizel, director of Earthworks’ national Oil and Gas Accountability Project.
“If land isn’t restored, it won’t be of use for anything else other than oil and gas,” Baizel said. “You get weeds and increased erosion. We’re semi-arid. This does take some care and thought. And companies aren’t as careful as they are in their drilling programs. It’s an area that’s been neglected. … If we have droughts, it could play right into a dust bowl.”
Continuing oil boom
Across Colorado, the overall land damage, covering hundreds of square miles, is worsening as the oil boom continues.
Changes happen quickly once topsoil is removed. Almost as soon as drillers scrape off vegetation, wind and rain accelerate erosion.
By removing and exposing fragile soil, oil and gas operations have the potential to increase dust in the air — until land is fully restored, said Gene Kelly, chief of CSU’s soil and crop sciences department.
“There’s a lot of disturbance going on across our landscapes. There are going to be consequences for that,” Kelly said. “We have not really looked at the cumulative impact yet, the acreage and the impact of the roads. The roads seem to be pretty wide.”
Oil and gas companies are shifting to larger-scale operations, constructing multiwell pads covering up to 10 acres.
The process begins when the COGCC issues drilling permits. Companies deploy heavy machinery and workers who scrape off soil before grading out access roads and wellpads. They typically remove 2 feet of topsoil and are encouraged to heap it and cover it for eventual use in land restoration.
Trucks then haul gravel. Dozers spread the gravel across the pad, constructing an industrial platform for heavy equipment.
Oil and gas wells can produce for years. But interim reclamation after fracking shrinks the disturbed area, said Korby Bracken, director of Health, Safety and Environment for Anadarko Petroleum, at a Weld County site last fall.
“You’ll never know it was here,” Bracken said as Anadarko contractors recontoured a 6-acre industrial pad near Lochbuie. “(The challenge is) making sure there are nutrients in the soil.”
To that end, companies are testing additives to improve soil and retain water.
But, when there’s enough rain to spur growth of grasses and crops — like last year — the moisture also sets off invasions of weeds.
Weeds were proliferating across Anadarko’s carefully recontoured site in Weld County within weeks after dozers smoothed the scar. Under a deal with the landowner, Anadarko had committed to replanting alfalfa.
“We have to spray them,” Bracken said. “We don’t want weeds here, either. We want to get the land turned back.”
Bruce Finley: 303-954-1700, bfinley@denverpost.com or twitter.com/finleybruce
