Washington, D.C. — U.S. Senator Michael Bennet (D-Colo.) alongside U.S. Senators John Hickenlooper (D-Colo.), Martin Heinrich (D-N.M.), Alex Padilla (D-Calif.), Ben Ray Luján (D-N.M.), Ron Wyden (D-Ore.), Angus King (I-Maine), Bernard Sanders (I-Vt.), Jeff Merkley (D-Ore.), Edward Markey (D-Mass.), and Sheldon Whitehouse (D-R.I.), wrote to U.S. Department of the Interior Secretary Deb Haaland and Bureau of Land Management (BLM) Director Tracy Stone-Manning in support of the updated oil and gas bonding requirements in the BLM’s proposed Onshore Oil and Gas Leasing Rule.
“Our public lands are essential to fishing and hunting, wildlife and land conservation, livestock grazing, and our states’ outdoor recreation economies. However, orphaned wells left behind by oil and gas companies litter our landscapes,” wrote Bennet and the senators. “These wells leak powerful, climate-harming methane emissions, release other dangerous pollution affecting our air, water, and wildlife, and prevent lands from being used for other purposes.”
Oil and gas bonding rates – intended to ensure operations are cleaned up after service — have not been updated since they were set more than fifty years ago. As a result, current bonding rates are wholly insufficient to cover the true costs of cleaning up drilling sites, and taxpayers are ultimately left to foot the bill.
The senators point to specific support for the BLM’s proposal to increase minimum bond amounts to account for the true remediation costs of abandoned wells, end the use of burdensome and inefficient nationwide bonds, and provide a phase-in period for existing bonds to meet the increased rates and for conversion of eliminated bond types into statewide bonds. They call on the Biden administration to swiftly review public input and finalize the rule.
“Minimum bond amounts were set in the 1950’s and 60’s and have not since been updated, even to account for inflation,” continued the senators. “Bonding reform is essential to fix this broken system and help ensure that companies – not taxpayers – bear the costs for cleaning up drilling sites on our public lands.”
The BLM’s proposed bonding reform provisions align with Bennet’s Oil and Gas Bonding Reform and Orphaned Well Remediation Act and follow his letters to the Biden Administration in December 2022 and July 2023 urging them to update the nation’s antiquated oil and gas bonding system. Bennet’s legislation would provide funding for orphan well cleanup and increase minimum bonding requirements for oil and gas development on public lands to ensure adequate financial resources are available for future cleanup and remediation.
Bennet successfully advocated for $4.7 billion in the Bipartisan Infrastructure Law to plug and remediate orphan oil wells. In August, Bennet welcomed an initial $25 million of this funding to cap orphaned oil and gas wells across Colorado. Bennet also introduced the Public Engagement Opportunity on Public Land Exploration (PEOPLE) Act to restore the public’s vital role in shaping oil and gas leasing decisions on public lands. Bennet continues to work in Congress to codify bonding reform into law, provide communities across Colorado with resources to protect their air and water, and ensure responsible energy production on our public lands.
Organizations supporting Bennet’s letter include: Accountable.us, Alaska Wilderness League, Archaeology Southwest, Audubon Rockies, Audubon Southwest, Coalition to Protect America’s National Parks, Conservation Colorado. Conservatives for Responsible Stewardship Colorado Fiscal Institute, Colorado Wildlands Project, Colorado Wildlife Federation, Earthjustice, Earthworks, League of Conservation Voters, Montana Wildlife Federation, National Audubon Society, National Parks Conservation Association, National Wildlife Federation, Natural Resources Defense Council, Nevada Conservation League, Nevada Wildlife Federation, New Mexico Voices for Children, New Mexico Wild, New Mexico Wildlife Federation, Public Citizen, Rocky Mountain Farmers Union, Rocky Mountain Wild, Runners for Public Lands, Sierra Club, Southern Utah Wilderness Alliance, Taxpayers for Common Sense, The Nuestra Tierra Conservation Project, The Wilderness Society, Trout Unlimited, Upper Missouri Waterkeeper, West Virginia Rivers Coalition, Western Colorado Alliance, Western Organization of Resource Councils, Wild Montana, Wilderness Workshop, and the Wyoming Outdoor Council.
The text of the letter is available HERE and below.
Dear Secretary Haaland and Director Stone-Manning:
We write to express our support for the updated federal oil and gas bonding requirements in the Bureau of Land Management’s (BLM) proposed Onshore Oil and Gas Leasing Rule. Those requirements align closely with provisions in the Oil and Gas Bonding Reform and Orphaned Well Remediation Act, introduced in the 117th Congress, and are critical to address the challenges that dangerous orphan wells pose on our public lands across the nation.
Our public lands are essential to fishing and hunting, wildlife and land conservation, livestock grazing, and our states’ outdoor recreation economies. However, orphaned wells left behind by oil and gas companies litter our landscapes. These wells leak powerful, climate-harming methane emissions, release other dangerous pollution affecting our air, water, and wildlife, and prevent lands from being used for other purposes.
Currently, oil and gas well reclamation costs far exceed the lease bonds BLM requires companies to carry. This discourages companies from properly plugging and cleaning up their wells since it is cheaper to abandon them, leaving taxpayers to shoulder the costs of future cleanup. Minimum bond amounts were set in the 1950’s and 60’s and have not since been updated, even to account for inflation. The Government Accountability Office (GAO) pointed to outdated bonding requirements as a significant financial risk to the federal government in a 2019 report. Bonding reform is essential to fix this broken system and help ensure that companies – not taxpayers – bear the costs for cleaning up drilling sites on our public lands.
We agree with BLM’s statement in the proposed rule that “current minimum bond amounts are outdated, expose the Federal Government to significant financial risks in the event of bankruptcies, and delay ‘complete and timely’ reclamation and restoration of lease tracts, which can cause or exacerbate a range of environmental issues, including methane leaks, surface and groundwater contamination, interference with agricultural activities, and degraded wildlife habitat.”
Specifically, we strongly support reforms to:
- Increase minimum bond amounts required for individual lease bonds to at least $150,000 and statewide bonds to at least $500,000 to better reflect remediation costs on federal lands, and to regularly adjust those rates for inflation;
- Eliminate the use of nationwide bonds, which are administratively challenging and inefficient and put them further behind statewide bonds for bond increases and reviews; and
- Provide a phase-in period within which bonds held prior to promulgation of the final rule must meet the increased minimum bond amounts, and within which nationwide and unit operator bonds must be converted into statewide bonds.
We applaud BLM for moving forward with long overdue reforms to the onshore oil and gas leasing program’s bonding requirements. We urge the agency to move swiftly to review and incorporate public input and finalize the rule.
We look forward to hearing from you on this important matter.