The U.S. Department of Energy and the U.S. Environmental Protection Agency (EPA) are providing $12.6 million in funding to support Colorado’s efforts to reduce methane emissions by shutting down older, low-yield oil and gas wells.
EPA Region 8 Administrator KC Becker met with state officials in Commerce City on Friday to announce the award of the grant from the Methane Emissions Reduction Program, a joint EPA and Department of Energy initiative authorized by the Inflation Reduction Act of 2022. Methane, a potent greenhouse gas, is the main component of natural gas, and methane leaks from fossil fuel infrastructure are a major contributor to climate change.
“Colorado is a national leader in reducing emissions and protecting our air quality, and these grants will strengthen that work and move us closer to our climate goals,” Gov. Jared Polis said in a statement. “Everyone has a right to access clean air, and we appreciate the Biden-Harris administration’s partnership in this effort.”
Get the morning’s headlines straight to your inbox
Colorado will use the funds to cover the cost of voluntarily plugging, rehabilitating and reclaiming marginal or “stripper” wells — older wells that produce very little oil and gas — on non-federal lands across the state. The typical cost to plug and rehabilitate an older well can range from $50,000 to $100,000.
The Energy and Carbon Management Commission, the state agency that regulates oil and gas production, will oversee the program. The ECMC said in a press release that it plans to “prioritize wells known to have high methane emission rates and those located near disproportionately affected communities.”
“We want to thank the EPA and DOE for supporting this important work in Colorado,” Aaron Ray, interim director of the ECMC, said in a statement. “This federally funded program will improve local air quality, reduce methane emissions and create benefits for disproportionately impacted communities across our state.”
The state estimates that methane emissions from oil and gas infrastructure accounted for more than 20% of Colorado’s total greenhouse gas emissions in 2020. That share is roughly equivalent to the total emissions from all gasoline-powered vehicles on Colorado’s roads.
Since 2014, Colorado, under then-Governor John Hickenlooper’s administration, has been a leader in implementing regulations to detect and minimize methane leaks from oil and gas operations. The EPA last year passed federal methane regulations that advocates say are modeled on Colorado’s approach.
But while state officials and industry groups celebrate progress in reducing the sector’s methane emissions “intensity” – a measure of the amount emitted per unit of oil and gas produced – Colorado’s booming oil and gas production levels caused methane emissions there to rise in absolute terms between 2015 and 2020, remaining near 2005 levels.
To meet the state’s upcoming climate goals, authorities are seeking drastic emissions cuts in the oil and gas sector. The goal is to reduce emissions from over 20 million tons in 2020 to less than 14 million tons by 2025 and to 7.3 million tons in 2023.
