Colorado Finds Gold in Its Abandoned Oil Wells

Colorado taps Gradient Geothermal to assess orphaned wells for clean energy potential, building a replicable state model

27 Mar 2026

Colorado has commissioned an engineering study to determine which of its abandoned oil and gas wells could be converted into geothermal energy sources, in a move that could offer a template for other states grappling with the cost of well remediation.

The Colorado Energy and Carbon Management Commission and the Colorado Energy Office have engaged Gradient Geothermal, a Denver-based firm, to assess wells within the state's orphaned well programme. Engineers will evaluate each site for bottom-hole temperature and water flow, identifying candidates for electricity generation or direct-use heating. The study will produce a publicly available dataset alongside pilot recommendations and policy guidance.

The commercial logic is clear. Abandoned wells already have wellbore infrastructure in place, removing the high upfront drilling costs that have historically constrained geothermal development. Gradient captures residual heat from deep underground water and converts it into combined heat and power output.

The scale of the potential opportunity is significant. Gradient's chief executive has estimated that up to 500,000 wells across the United States have the right conditions for conversion, representing as much as 13 gigawatts of clean, reliable power.

Gradient points to existing proof of concept. The company completed a pilot at a Department of Energy-supported site in Nevada and is scaling through a partnership with Chord Energy in North Dakota. Colorado's statewide study goes further by embedding the approach within the formal machinery of a state orphaned well programme, creating a structure that others could replicate.

The initiative arrives as federal funding sharpens the pressure on states to maximise returns from remediation spending. The Bipartisan Infrastructure Law has allocated $4.7 billion to plug orphaned wells nationwide. Repurposing viable sites for energy production, rather than simply sealing them, could reduce net costs, create local employment, and deliver clean power to communities with long histories of oil and gas activity.

Whether the Colorado model can be adopted more widely will depend on subsurface conditions that vary sharply by geology, and on whether state regulators elsewhere are willing to absorb the administrative complexity of running energy assessments alongside remediation programmes.