Across the West, spills from oil and gas development take a toll on lands, waters, and communities that live nearby. In Colorado, New Mexico, and Wyoming—the Mountain West’s top oil and gas-producing states—companies report thousands of spills each year, which release toxic materials such as crude oil and produced water. New Mexico operators reported a record number of drilling-related spills in 2021, as well as billions of cubic feet of wasted methane.

In 2021, oil prices rebounded from a pandemic-induced slump in 2020, when the price per barrel dropped below zero. The rebound in oil prices likely led to increased production of oil in New Mexico, while Wyoming and Colorado produced less oil in 2021 compared to 2020. Despite that fact, the total number of oil and gas spills in each state was higher in 2021 compared to 2020.

In Wyoming, oil production in 2021 was down 14 percent from its pre-pandemic level in 2019, and there were around 20 percent fewer spills in 2021 than there were in 2019, indicating a possible decrease in Wyoming’s rate of spills per barrel of oil produced. In New Mexico, oil production in 2021 was up 32 percent compared to 2019, and there were around 20 percent more spills in 2021 than in 2019, showing possible progress in decreasing the rate of spills per barrel in New Mexico. In Colorado, oil production was down 20 percent from its pre-pandemic level, while spills were down almost 40 percent compared to 2019, indicating possible substantial progress in reducing Colorado’s rate of spills per barrel. [The level of methane gas produced in Colorado and Wyoming was very similar in 2019 compared to 2021, however the level of methane gas produced in New Mexico jumped 25 percent from 2019 to 2021.] 

Oil companies amassed a huge amount of debt during the Covid-19 pandemic, and while oil prices have risen since plunging in 2020, investors are looking to see profits returned to shareholders in the form of dividends and stock buybacks, rather than invested in more production. This could be one reason production fell slightly in Colorado and Wyoming in 2021.

Of course, the number of active wells and inspections in each state also factors into how many spills occur and are recorded. Colorado and Wyoming both track the number of producing wells in the state. Wyoming saw a very slight increase in producing wells in 2021 compared to 2020, which could factor into the slight increase in spills in the state. Meanwhile, Colorado had around 1200 fewer wells operating in 2021 compared to 2020, meaning there was a higher rate of spills per well there in 2021. Finally, New Mexico’s oil and gas regulators report the number of well inspections that occur each month, however that data has not been updated since January 2021.

While federal regulations regarding spill and leak reporting remained largely unchanged in 2021, New Mexico began requiring operators to report all incidents of flaring and venting of gas totaling over 50,000 cubic feet in a 24 hour period beginning May 25, 2021. The new rule is part of a larger effort in the state to reduce overall methane emissions. Previously, the state only required operators to report incidents of venting—in which methane is released straight into the atmosphere rather than burned. This complicated the process of comparing 2021 data on oil and gas “spills” in New Mexico directly to 2020 data. For the purposes of this report, spills in New Mexico involving oil and any liquid byproducts involved in drilling—such as water and condensate—were separated from gas “spills”, which are actually incidents of venting and flaring. New Mexico also made it illegal for oil and gas companies to spill liquid waste in June 2021. 

Finally, the Colorado legislature passed a sweeping overhaul of oil and gas regulations in 2019 that may be one factor behind the decline in spill rate per barrel between 2019 and 2021. The law increased setbacks for new wells, strengthened restrictions on methane releases, and required more monitoring of emissions. It also gave counties the ability to preempt statewide oil and gas regulations, as well as levy their own fines for spills and other regulatory violations. It’s hard to say exactly how much the law is responsible for reducing spills in Colorado, given the patchwork nature of the new regulations, among other factors. In December 2021, Colorado adopted a new rule to increase inspections of oil and gas sites, but that rule did not affect the findings of this report as it came at the end of the data collection period.