Home / World News / State raises tax on oil, gas to build environmental cleanup fund during a boom time – The Denver Post

State raises tax on oil, gas to build environmental cleanup fund during a boom time – The Denver Post

Colorado officials who allowed the state to become an epicenter for oil and gas industry production, with companies pumping up to 12,000 barrels a month worth $10.6 billion last year, on Monday revealed serious trouble taxing the industry sufficiently to deal with increasingly pressing environmental impacts.

The Colorado Oil and Gas Conservation Commission approved a tax hike to raise $4.8 million and said lawmakers will have to do more.

Oil and gas companies have walked away from at least 300 inactive wells that under state rules were supposed to be plugged with cement to prevent contamination of soil and water. Fixing one of these improperly abandoned “orphan” wells costs about $75,000, and state regulators said they cannot afford to tackle more than about 10 a year.

Air pollution remains a concern. Boulder County recently funded local-level inspections at industry facilities and, after 600 inspections, found a majority of sites had at least one leak.

And 60 or so “distressed operators” are raising concerns they will saddle the state with environmental burdens, COGCC director Matt Lepore said. These companies operate 4,000 wells “that make us nervous,” he said, later noting that held talks with the industry about orphan wells and hit an impasse.

The abandoned well problem, he said, “cannot be ignored.”

Colorado’s effective severance tax on companies currently ranks among the lowest in the world, reduced by deductions companies are allowed under a recent state supreme court decision.

State lawmakers have set up a system where COGCC regulators are almost entirely funded by oil and gas companies, based on company revenues. Yet COGCC obligations to protect people and the environment tend to increase when there’s less funding available from the industry.

Neighboring states such as Wyoming and New Mexico, and countries such as Norway, have built up multibillion-dollar funds by taxing the industry. This leaves those governments in a position to deal with adverse impacts if companies fail.

About brandsauthority

Check Also

Welcome to Homeownership – The New York Times

Joe DeVito, like many other New Yorkers who wanted more space to weather the pandemic, …

Leave a Reply

%d bloggers like this: