These math problems will appear in the fifth-grade Colorado Measures of Academic Success (CMAS) test. The questions are designed to engage the critical thinking of 10- and 11-year old students related to the state’s oil and gas well-plugging policies. These are “real life” problems that will affect these students as taxpayers well into their middle age.

1. Sixty-eight thousand oil and gas wells in various stages of production and exhaustion exist in Colorado. An estimate of $100,000 per well will cover the costs of plugging wells and reclaiming surrounding land once wells have completed production. What is the estimated total expense of plugging these wells and reclaiming land?

a. $6.8 million

b. $68 million

c. $680 million

d. $6.8 billion

e. Who knows? It’s a crapshoot.

2. The Colorado Energy and Carbon Management Commission (ECMC) has oversight of unplugged wells. The ECMC currently has $218 million in “bonds” or promised funds, to cover the cost of plugging and finishing 48,000 wells. An additional $133 million owed by energy operator KP Kaufmann is uncollected due to litigation. It is probable the $133 million will never be secured due to potential insolvency of the operator. How much money is actually available to the state for its well plugging program?

a.  $218 million

b.  $351 million

c. $133 million

d.  $85 million

e. Who knows? It’s a crapshoot.

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3. One hundred and seventeen operators owning 5,860 wells have not filed their proof of well-plugging financial assurance to comply with ECMC rules. At an estimated $100,000 per well. What amount of financial assurance is missing from the commission’s well-plugging program to cover estimated unplugged well expenses?

a.  $5.86 million

b.  $586 million

c.  $58.6 million

d.  $5.86 billion

e.  $0

4. Oil and gas well owners must file a Form 3 with the ECMC that identifies how much money an owner must pay into the state’s oil and gas well-plugging program. Eighty-nine operators have filed a Form 3 that states the owners must post and “assure” a total of $66 million worth of bonds to prove that enough money will be available to cover well-plugging costs. These 89 operators have not provided proof of their assurance bonds. Of the $66 million, $12 million is supposed to come from potentially insolvent KP Kaufmann. How much will ECMC receive based on the Form 3 records?

a. $66 million

b. $54 million

c. $44 million

d. $34 million

e. Who knows? It’s a crapshoot.  

5. The ECMC has $212 million in its well-plugging account based on its current “best in the nation” well-plugging bonding rules. This amount is $25 million less than the ECMC had in its account in 2022 prior to the date in which the rules were set. How much money did ECMC have “on hand” in 2022 before its latest rule setting actions?

a. $217 million

b. $187 million

c. $227 million

d. $192 million

e. $237 million

6. The ECMC has revised its estimates for how much it will collect from oil and gas owners. Its first estimate was $820 million in February 2024. The next estimate was $613 million in May 2024. What is the actual estimated amount based on approved Form 3 statements in July 2024?

a. $950 million

b. $734 million

c. $697 million

d. $652 million

e. $589 million

7. Thirteen thousand wells have been plugged and abandoned but have not passed final reclamation. These 13,000 wells may not be covered by the new rules. If each well has a remaining $100,000 final reclamation cost, what is the total uncovered expense that may accrue?

a. $13 million

b. $1.3 million

c. $130 million

d. $1.3 billion

e. Who knows? It’s a crapshoot.

8. Oil and gas well owners have two general ways of “bonding” their well-plugging expense. They can pay the full cost in year one or over time (10 to 20 years). The 10-to-20-year schedule means the total available funds from the new rules won’t be “on hand” until 2042 based on a 2022 starting point. What is the likelihood ECMC will collect the total funds owed for well-plugging, remediation and reclamation?

a. 25%

b. 50%

c. 75%

d. 100%

e. 0%

9. Colorado’s orphan well portfolio grew by 576 wells from July 2023 through June 2024. The estimated cost of plugging, remediating and reclaiming 576 orphan wells is $100,000 per well. How will the $57.6 million cost of cleaning up these orphan wells get covered?

a. ECMC will require non-bankrupt oil and gas companies to cover the cost.

b. The counties in which the orphan wells are located will cover the cost.

c. State taxpayers will cover the cost.

d. Tax money from the federal government will cover the cost.

e. Who knows? It’s a crapshoot.

10. Based on your calculations, what is the likelihood that you as a taxpayer will get stuck with the tab for well-plugging and clean up for the next 20 years?

a. 100%

b. 75%

c. 50%

d. 25%

e. Who knows? It’s a crapshoot.

Currently there are 47,000 producing wells in Colorado, 1300 drilling wells, and 48,000 unplugged wells. Who will pay?

Paula Noonan owns Colorado Capitol Watch, the state’s premier legislature tracking platform.