CO Landowner Sues Oil Company Over Abandoned Well That Was Fraudulently Offloaded To Bankrupt Firm

[hatrack]

Cindy McCormick and her husband bought a new property in Hudson, Colorado, in 2020. It was expansive, close to friends and had a stunning mountain view. There was just one problem: an aging, abandoned oil well sat on one far edge of the land. The couple was a bit concerned, but the realtor and the well’s owner, Painted Pegasus Petroleum, assured them that it would be cleaned up. “We kind of took that as, OK, this is great, it’s not a problem,” McCormick said.

When the well still hadn’t been plugged two years later, McCormick began to look for more information, but Painted Pegasus didn’t return her calls. When she reached county officials for help, they informed her that the company had filed for bankruptcy in November 2021. “They said the well was orphaned and was now the responsibility of the state, and so it would be years probably before anything could be done to assist with our situation,” she said.

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Last week, McCormick and her husband Randy joined a group of property owners and farmers in Colorado in filing a lawsuit against a Denver-based oil company, HRM Resources, for its contributions to this issue. The plaintiffs, who are represented by environmental legal non-profit ClientEarth and law firms Richards Carrington and Borison Firm, say that oil companies including Chevron transferred hundreds of nearly depleted wells to HRM, which then conspired to avoid millions of dollars in clean-up obligations. The lawsuit alleges that HRM Resources then committed fraud by transferring nearly 200 wells to Painted Pegasus Petroleum, a Texas-based shell company designed for bankruptcy. When it transferred those assets, the plaintiffs allege, HRM knew Painted Pegasus would soon go bankrupt, offloading well decommissioning costs on to private landowners or the state.

“Painted Pegasus was a mere dumping ground,” the lawsuit says. HRM Resources did not respond to email or phone requests for comment. As a result of the company’s behavior, the plaintiffs say they have been left with unproductive infrastructure on their properties that pollutes the air and leaches contaminants into the soil. Researchers have found that unplugged, unproductive wells can leak toxic chemicals, some of which are carcinogenic.

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https://www.theguardian.com/us-news/2024/feb/29/colorado-oil-company-sued-clean-up-fraud

[Freethinker65]

1. Not surprised. Privatize the profits, socialize the the losses... and those nice tax breaks for the fossil fuel industry

[DURHAM D]

2. Sounds familiar.

Wasn't the well-head tax that States started assessing for each producing well back in the 80s supposed to create the fund that takes care of this sort of problem?