Before drilling on federal land, oil well operators provide a bond that acts as financial assurance.
If the operator tries to walk away from the well without properly maintaining it, they forfeit the bond and the government uses that money to remediate the well.
But there’s a tricky question at the center of this regulatory process. How much should that bond be?
“In 1951 and 1960 is when bonding rates were originally set," said Aaron Kindle, the director of sporting advocacy for the National Wildlife Federation. "$10,000 was set for an individual well, and then $25,000 was set for a statewide bond.”
Kindle said that by today’s valuation, bond requirements should be in the hundreds of thousands of dollars.
While the Biden administration updated bond requirements to adjust for inflation, a recent proposal from the Trump administration would roll those back.
“The bonding rates that were set a couple years back brought them up to higher rates," Kindle said. "$150,000 for an individual well, and $500,000 for a statewide bond. Well, this proposed rule is trying to turn it back to those 1951 and 1960 rates.”
According to Kindle, those antiquated rates don’t come close to covering the cost of oil well remediation today.
"There are about 16,000 abandoned wells on public lands right now," he said. "The BLM lists an average cost to clean those up at about $71,000 [each].”
And that extra cost across all abandoned wells, in the hundreds of billions of dollars, falls on the nation’s taxpayers. That’s according to an analysis from Conservatives for Responsible Stewardship.
Besides the cost, those abandoned wells represent a major threat to wildlife and nearby communities via groundwater contamination, air pollution, and combustion risk.
“Public lands are used by a wide variety of people for grazing and recreation and lots of different things," Kindle said. "There are other different businesses making their living off public land too.”
At the state level, updating bond requirements to reflect current remediation costs is an issue that was recently the subject of major intersectional consensus. In June of 2026, the Utah Division of Oil, Gas, and Mining announced a plan that would modernize oil and gas bond requirements on state land.
Industry and activist groups alike have heralded the plan as a sensible balance between energy development, financial responsibility, and environmental stewardship.
For even some conservative lawmakers, the benefits of oil and gas development are outweighed by the costs the federal plan would levy on taxpayers.
“$25,000 isn't even enough money to get somebody out there to plug a well," said Troy Shelley, the Republican representative from District 66. "The balancing act is that you don't want to make the bonding so high that you ruin the industry.”
Shelley is passionate about supporting Utah-based oil and gas producers. But for him, that means both providing an opportunity and demanding responsibility.
“I think we need to protect the ability of small producers to be able to get in," he said, "but we also can't allow the failures to be pushed off onto the general public. Part of your business venture is covering your loss if you lose.”
The Bureau of Land Management oversees oil and gas development on federal land. The bureau provided a statement over email when Utah Public Radio requested an interview.
It said that the BLM’s proposal would both improve efficiency and access for small operators while also maintaining strong environmental safeguards. The BLM would require higher bonds to protect taxpayers and demand accountability from operators when necessary.
This statement asserted that their proposal reflects the BLM’s commitment to preventing orphan wells.
They also said that “updated bond levels do not diminish the safeguards that ensure wells are properly managed and reclaimed.”
Industry operators and environmental activists agree that the BLM can use the bond-adequacy review process to increase bonds for poor operators. But they also say the low minimum requirement of $10,000 or $25,000 allows small operators to exploit a major system loophole.
In response to the BLM statement, David Jenkins, the president of the advocacy group Conservatives for Responsible Stewardship, explained that in order to dodge the real costs of reclamation, small operators can transfer a well permit to a shell company once it dries up. The operator will then allow the company to go bankrupt and walk away from the costs of remediation, which are shunted onto taxpayers.
Jenkins said that by enacting this proposal, the Trump administration would be “siding with scammers over hard-working taxpayers.”
The proposed rule change is alarming to activists, regulators, and even oil well operators across the ideological spectrum.
As of Aug. 13, the Biden-era permitting rules would still require a bond in the hundreds of thousands of dollars. Public comments can be submitted until Aug. 24 through regulations.gov or by mail to the Bureau of Land Management.
