The Orphan Wells Mitigation Enterprise Board approved an increase in Colorado’s annual industry-funded orphan-well mitigation fee to sustain plugging, environmental cleanup and reclamation as the program plans to accelerate work in 2027.
Beginning in April 2027, operators will pay $285 per well in the higher-production tier and $155 per well in the lower-production tier as part of the fees collected by the Colorado Energy and Carbon Management Commission (ECMC). The current rates are $225 and $125, respectively. The marginal-well mitigation fee will remain $115 per well.
The board’s action follows the Orphaned Well Program’s highest-output year.
In fiscal year 2026, the ECMC plugged 161 orphaned wells, 69 percent more than the prior year. The program performed work at 807 sites across 91 projects, addressed 284 facilities and completed 1,035 discrete tasks at those sites related to plugging wells, decommissioning production equipment, and performing environmental and reclamation work. Field-project expenditures totaled $26.5 million, with funding from federal grants, operator-funded enterprise fees and claimed bonds.
“The record work completed this year shows that Colorado has built a program capable of turning industry fees and federal grants into real work in communities,” said ECMC commission chair Jeff Robbins, who also chairs the Orphan Wells Mitigation Enterprise Board. “The board’s responsibility is also to look ahead. A measured fee increase will help ensure that the industry-funded program can keep pace as additional wells enter the inventory and federal funding changes.”
Even with that progress, new and newly identified liabilities continued to enter the program. As of July 1, the inventory included 2,156 orphaned sites with 996 remaining wells to plug on those sites. The program annually reviews funding levels to ensure they match forecasted inventory for the next fiscal year.
“Data helps us identify risk, direct resources and measure whether we are moving work faster,” said ECMC Director Jennifer Walker Graf. “The fiscal year 2026 results show that added capacity increased field performance. A sustainable funding base will allow ECMC to keep using that data-driven approach to move priority sites through plugging, remediation and reclamation.”
The Enterprise Board reviews fees annually based on current and forecasted circumstances as well as anticipated expenditures. Staff estimates that the number of active wells paying the fee declined from about 45,000 in fiscal year 2022 to 37,630 in fiscal year 2026. As a result, annual fee revenue declined from approximately $9.3 million to $8.5 million during the same period. At existing rates, projected revenue would continue to decline as the number of active wells are forecasted to continue to decline.
The new approved fees would generate an estimated $10.7 million in 2027, compared with approximately $8.1 million if rates remained unchanged. Staff expects the program to spend up to $30 million annually to maximize available federal infrastructure grants and sustain work after those grants expire in fiscal year 2030-2031.
“Predictable funding allows us to build and retain the staff and contractor capacity needed to plan work across multiple years,” said Orphaned Well Program Manager David Andrews. “Additional resources can accelerate the work, but plugging is only one step. Many sites also require facility removal, environmental investigation, remediation and reclamation before the work is complete.”
The orphan well mitigation fee is paid by oil and gas operators and supports work at orphaned sites where no responsible owner or operator can be found or is willing or able to complete the work.
The ECMC will report annual collections and adjustments to the Enterprise Board, which informs the board concerning its yearly determination regarding appropriate fee levels.
The Orphan Wells Mitigation Enterprise was established by Senate Bill 22-198 as an industry-funded mechanism to plug orphaned wells and remediate and reclaim related sites. More information and the fiscal year 2026 annual report are available on the ECMC website.
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