On the edge of Longmont there is an alfalfa field destined to be filled with homes. A school and the city recreation center and museum are close by. Houses flank one side of the parcel. Costco is just to the north. There is just one problem — the black oil bubbling up in the middle of the plot.
The oil and its pungent odor come from an old well plugged and abandoned almost 27 years ago and now buried beneath the surface. Its existence was unknown to the property owner, the Longmont-based Diamond G Concrete Co.
There are nearly 22,000 plugged and abandoned oil and gas wells across nine Front Range counties. Three-quarters are in Weld County, but every county from Douglas to Larimer has some.
“Some wells leak immediately, some are good for 50 or 60 years,” said Anthony Ingraffea, a Cornell University engineering professor emeritus, who has studied well integrity. “All plugged wells face the risks of corrosion, degrading cement.”
“They are all ticking time bombs,” Ingraffea said.
Houses platted, but regulators say plugging isn’t a priority
The state Energy and Carbon Management Commission, formerly the Colorado Oil and Gas Conservation Commission, allows the public to refer potential orphan wells to the commission’s Orphan Well Program for plugging and remediation.
That option had, however, never been exercised until Aug. 24, when Diamond G Concrete asked the commission to plug the well in its alfalfa field.
“This is something we’ve not heard before,” ECMC Chairman Jeff Robbins said.
Diamond G’s attorney David Neslin called it a “unique situation” and a case involving “exceptional circumstances.”
The commission voted unanimously to add Diamond G’s well, Tanaka 1-11, to the approximately 458 wells and 1,147 sites on the state’s orphan well list, but it hardly looks like it is unique or exceptional.
In September, Oakwood Homes, which has housing developments in six Colorado towns and cities, is slated to go before the ECMC to ask it to take over and plug an old well underneath a parcel in Erie it is planning to develop.
It appears that methane has seeped out of an old well on the site and into the soil. The well, William H. Peltier #1 was plugged in 1996 by the now defunct Vessels Oil and Gas Co.
The story of the Tanaka 1-11 and William H. Peltier #1 wells is one of how Colorado’s oil and gas past can weigh on its home building future and a reminder of what may be lurking beneath the surface of the Front Range.
Tanaka 1-11 was drilled to a depth of 6,800 feet by Noarko Resources in 1985. The alfalfa field back then was in unincorporated Boulder County. The well was transferred to the Apex Operating Co. and then to the Longmont-based Meyer Oil Co. in 1990.
Meyer Oil, however, racked up a string of notices of violation and in May 1995, the oil and gas commission revoked the company’s certification to do business.
That December the Tanaka well was plugged and abandoned, with a cast iron bridge plug set at 6,250 feet, and cement plugs set at 580 feet and at the surface. About 6,250 feet of steel casing was pulled out of the well for reuse.
In 1996, Meyer Oil filed for bankruptcy liquidation and in 2011, the ECMC released a $30,000 blanket plugging bond for Tanaka 1-11 and some other wells.
“Meyer Oil Company no longer has well operations in Colorado,” the ECMC said, adding “any fines imposed have been discharged by the U.S. Bankruptcy Court of Colorado.”
In 1997, a Diamond G affiliate bought the land with no knowledge of the existence of Tanaka 1-11. The field is zoned for residential-mixed use and has already been platted for development.
It was when one of the developers was doing an assessment this past April that they discovered the bubbling oil and informed Diamond G.
By this point Noarko, Apex Operating, and Meyer Oil were all long gone and so Diamond G turned to the ECMC.
While adding the Tanaka 1-11 well to the Orphan Well Program, the commission balked at designating it for priority plugging, leaving it to staff to determine where it ranks on the program’s risk assessment protocol.
“The state’s orphan well program has significant experience associated with orphan wells around the state and determining the necessary prioritization to ensure protection of public health,” Commissioner John Messner said.
Diamond G’s application was supported by the City of Longmont, the Town of Erie, and Boulder and Adams counties.
“The plugging of the well failed for some reason and the operator who completed that plugging no longer exists, but the state agency that approved that plugging and deemed the site adequately completed does,” Boulder County said in its letter of support. “Only the ECMC has the expertise and a defined funding stream for managing facilities like the well.”
Housing developers don’t have expertise to deal with orphan wells
Colorado began its orphan well program in 1990. It has been financed by fees, fines and bonds levied on the oil and gas industry.
In 2021, the program received a $5 million appropriation to speed its work and in fiscal year 2021, the last year for which figures are available, the program spent nearly $5.4 million on plugging and remediation, according to the program’s annual report.
Rules adopted in 2022 requiring operators to demonstrate they have the financial resources to plug and abandon all their wells, includes a fee on each company to raise $10 million a year for the Orphan Well Program.
The state is also in line to receive $25 million in federal funds from a $1.4 billion U.S. Department of Interior program to deal with orphan wells.
“Our orphan well program is phenomenal,” Robbins said during last week’s ECMC hearing. “It is best in the nation, if not best in the world.”
In September, Oakwood Homes will also be seeking relief from the program.
The leak from the William H. Peltier #1 well was discovered when, at the direction of the town, Oakwood had the soil tested for contaminants before construction.
Trace levels of methane were detected in the ground in August 2020, according to an Oakwood filing with the ECMC.
“The well was either not plugged properly by Vessels or the plugging work has failed, and the well now requires remediation,” Oakwood said in its commission application.
The Vessels Oil Company had been dissolved, although the ECMC still has two company plugging bonds of $25,000 and $30,000.
Last April Oakwood had the soil tested again and the methane was still there. The levels were small and no methane was detected in the air, according to David Frank, Erie’s energy and environmental program specialist.
“Oakwood is not an oil and gas operator, it has no experience with oil and gas operations, and it is unable to perform the work necessary to remediate the well,” the developer said in its ECMC application. “Oakwood efforts to retain the services of a registered operator to remediate the well have been unsuccessful.”
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Oakwood has offered to pay for the plugging and abandonment costs above the Vessels bonds if the ECMC Orphan Well Program will do the work.
Development plans are on hold while the leaking well is addressed. The well “if left unremediated, may pose a risk to the environment or other resources,” the application said.
“Plugged wells need to be monitored in perpetuity to locate those that are leaking and repair them,” said Heidi Leathwood, a climate policy analyst for the environmental group 350 Colorado. “This should fall on operators where possible or the ECMC if there is no responsible operator. There should be specific rules and a portion of the orphaned well program that is devoted to this.”
The older the well the greater the risk, and not only because of age. In 2007 and again in 2013 Colorado upgraded the plugging requirements for wells with the aim of making them less prone to failure.
“In the best-case scenario if everything was done right, a plugging job lasts decades or more, but you are working against chemistry, shrinkage, ground motion,” Cornell’s Ingraffea said. “Once you break the bond between cement and steel you have a highway for oil and gas.”
“They are like me,” he said, “a 76-year-old grandfather where everything is breaking down.”