Colorado Lawsuit Goes After Oil Company For Deliberately Offloading Leaking Ancient Wells Onto Taxpayers

[hatrack]

A lawsuit filed in the U.S. state of Colorado hopes to hold an oil and gas company accountable for allegedly transferring ageing oil and gas wells to a separate entity that was designed to go bankrupt, leaving the public saddled with the clean-up costs. Those manoeuvres, the lawsuit states, amounts to a “massive fraud that is, to this day, endangering Coloradans.”

EDIT

The majority of the 200 wells in question were originally transferred from Noble Energy (since acquired by Chevron) to a Denver-based company called HRM Resources. HRM operated and profited from those wells for a period of time, before transferring them to another company called Painted Pegasus in September 2018. The problem was that Painted Pegasus filed for bankruptcy and liquidated a few years later, and the liabilities associated with cleaning up those wells were left with no owner. The state of Colorado was ultimately forced to pick up the tab — those 200 wells ended up in Colorado’s Orphaned Well Program.

ClientEarth alleges that this was all by design. “The demise of Painted Pegasus was inevitable; in fact, Painted Pegasus’ failure was the plan,” the complaint states. The lawsuit states that HRM Resources “fraudulently transferred” those wells into a company destined to fail. “It means that the transfer was made with an intent to defraud,” Camille Sippel, a staff attorney at ClientEarth, told Gas Outlook in an interview. “Fraudulent transfer,” she said, is a novel legal theory, one that could be replicated in many other parts of the country that are dealing with the same problems and similar industry practices surrounding the enormous crisis of orphaned oil and gas wells. “In this context, the transfer was made with the intent to avoid the liabilities on purpose,” Sippel added.

There are an estimated 3.7 million abandoned oil and gas wells in the United States, and 58 percent of that total are “unplugged,” or not properly decommissioned. Unplugged wells leak methane and other toxic air pollutants such as benzene. They are also a big source of climate pollution. In 2021, abandoned oil and gas wells leaked an estimated 295,000 tonnes of methane, equivalent to the annual emissions of 1.8 million cars, according to the U.S. Environmental Protection Agency.

EDIT

https://thinc.blog/2024/04/04/in-colorado-oil-oligarchs-offload-orphan-oil-wells-on-taxpayers/#more-96846

[Think. Again.]

1. K&R for exposure.

[gab13by13]

2. Nothing new

There are millions of abandoned oil and gas wells all across the country just spewing slime all over. I ran into an abandoned well many years ago when I was hunting in central Pa.