Overview

Across the West, spills from oil and gas extraction take a toll on lands, waters, wildlife, and communities. 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 polluted water. 

Each year, the Center for Western Priorities analyzes state-level data for wells on private, federal, and state land. All three states included in this report require oil and gas companies, or well operators, to file a report each time oil or drilling materials are spilled. New Mexico also requires operators to report incidents of routine and emergency methane venting and flaring (methane waste events). 

Operators in New Mexico and Colorado reported an increase in drilling-related spills in 2022 as compared to 2021, while the number of reported spills in Wyoming went down as compared to 2021. Operators in New Mexico also reported a record number of methane waste events as compared to 2021 (the first year for which this data was available due to improved reporting requirements).

Global energy prices affect the amount of oil and gas produced in Colorado, New Mexico, and Wyoming. Often, but not always, an increase in production in response to global energy prices will help drive an increase in spills. Oil prices in 2022 started out at around $80 a barrel and climbed to over $120 a barrel in the first half of the year in the wake of Russia’s invasion of Ukraine. In June, prices started falling again and came back down to around $80 a barrel by the end of the year. Methane prices were around $4 per cubic foot in January 2022, nearly double the price of gas in January 2021. Prices continued climbing throughout the year, ending at $5.5 per cubic foot in December 2022. The mid-year spike in oil prices and overall increase in methane prices helped drive increases in production in New Mexico, the Western state that produces the most oil and gas. 

Colorado

Oil production in Colorado was relatively level in 2022, while the total reported volume of oil and drilling-related materials spilled increased 24 percent. Interestingly, the amount of oil reported spilled was down 53 percent, while the amount of produced water reported spilled was up 163 percent as compared to 2021. Meanwhile, there were at least 453 spills in Colorado in 2022 and 408 spills in 2021—an 11 percent increase in spills year-over-year.

This could indicate an increase in fracking activity occurred in the state in 2022, as produced water is a main by-product of fracking. Colorado does not require operators to report methane waste. Colorado adopted new rules to cut methane pollution and increased the frequency of inspections of oil and gas sites in December 2021. It’s unclear if or how these regulations impacted the number of reported drilling-related spills in 2022.

Notably, PDC Energy reported a 290 percent increase in the number of drilling-related spills it was responsible for in 2022 as compared to 2021. Over the same period, PDC Energy reported a 15 percent increase in profit, from $1.5 billion in 2021 to $2.8 billion in 2022.

Because Colorado regulators allow operators to report spill volumes in ranges rather than with distinct values, it’s not possible to calculate the company with the largest percent increase in spill volume for 2022, which is why we used the total number of spills to calculate percent increase from 2021 to 2022 for the top five spillers in the state. 

New Mexico

Oil production in New Mexico was up 23 percent in 2022 as compared to 2021, while the total reported volume of oil and drilling-related materials spilled was up 16 percent. Meanwhile, there were at least 1,455 spills in New Mexico in 2022 and 1,368 spills in 2021—a six percent increase in spills year-over-year. While this increase set a new record for the number of reported liquid spills in the state (since 2018), the volume of oil and drilling-related material spilled increased at a lower rate than overall oil production.

Notably, Occidental Petroleum, also known as Oxy, reported a 92 percent increase in the volume of drilling-related liquid it spilled in New Mexico in 2022 as compared to 2021. Over the same time period, Occidental’s profits increased seven-fold, going from $1.5 billion in 2021 to $12.5 billion in 2022, thanks to surging oil and gas prices.  

In May 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 2022 data for methane waste in New Mexico directly to 2021 data. For the purposes of this report, the amount of methane waste and the number of methane waste events (incidents of venting and flaring) reported in New Mexico from July 1 to December 31 in 2021 was compared to the amount of methane waste reported in the same period in 2022.

The amount of methane produced in New Mexico was up 17 percent in the second half of 2022 (July to December) as compared to the same period of 2021, while the volume of reported methane wasted through venting and flaring was up 30 percent. Meanwhile, the number of venting incidents was up 18 percent and the number of flaring incidents was up 65 percent in the second half of 2022 compared to the same period in 2021. 

Notably, Earthstone Operating reported a 3,768 percent increase in methane waste in the second half of 2022 as compared to the same time period in 2021, an increase of 988 million cubic feet. It also reported the highest volume of methane waste of any company for the second half of 2022. Earthstone’s profits increased tenfold from 2021 to 2022, going from $61 million to $650 million. 

Wyoming

Oil production in Wyoming was relatively level in 2022, while the total reported volume of oil and drilling-related materials spilled was down 40 percent. The amount of oil reported spilled was down 14 percent, while the amount of produced water reported spilled was down 22 percent. Meanwhile, there were at least 521 spills in Wyoming in 2022 and 642 spills in 2021—a 23 percent decrease in reported spills year-over-year. This indicates possible improvement in spill reduction by operators in Wyoming. Wyoming does not require operators to report methane waste.

Notably, Carbon Creek Energy reported a 198 percent increase in spills in 2022 as compared to 2021. Carbon Creek does not report its annual profit information; however, its parent company, US Realm, filed for bankruptcy in October 2019 and has since received significant tax and royalty relief. 

A few notes about the data

Since each state has different reporting requirements, inspection rates, and enforcement mechanisms, spill data from one state should not be compared to that of another. For example, New Mexico has much more stringent reporting requirements when it comes to methane waste, requiring producers to report all incidents of venting and flaring. This is not the case in Colorado or Wyoming. Meanwhile, Colorado requires operators to report the distance from a spill to nearby surface water, water wells, and buildings. And while New Mexico and Wyoming require operators to report exact volumes, Colorado allows operators to report volumes using a range. 

Since the spill data in each state is self-reported by the oil and gas companies responsible for the spills, the true number of spills and volume of spilled material in each state is likely higher than those included in this report. 

Finally, the methodology used to calculate this year’s report differs from that of past years’ reports. Therefore, data from this year’s report should not be used in combination with data from prior years.