Division of Oil, Gas and Mining Implements Updated Oil and Gas Bonding Rules

An oil pumpjack operates in the Uinta Basin, a region responsible for most of Utah’s crude oil production. Photo courtesy of Utah Division of Oil, Gas and Mining

SALT LAKE CITY — The Utah Division of Oil, Gas and Mining announced that updated oil and gas bonding requirements took effect on July 8, 2026, modernizing the state's financial assurance program to reflect better the actual costs of well plugging, site reclamation, and protection of Utah's natural resources.

The revised rules strengthen financial protections by ensuring operators maintain adequate bonding throughout the life of an oil and gas operation, from drilling and production to plugging, reclamation, and final site restoration. The updates also help reduce the risk that well plugging and cleanup costs will ultimately fall to taxpayers.

“The 2019 oil and gas program audit identified the need to modernize Utah's bonding requirements to better align with potential reclamation costs," said Mick Thomas, Director of the Division of Oil, Gas and Mining. "Bonds are a critical component of the state's regulatory framework, helping ensure operators have the financial assurance necessary to plug wells and reclaim disturbed lands properly. These updates strengthen accountability, support responsible resource development, and help safeguard taxpayers and Utah's natural resources."

Key changes to the bonding rules include:

• Modernized bonding requirements for most oil and gas activities, including drilling, production, well transfers, underground injection control, enhanced oil recovery, exploration and production recycling facilities, and seismic exploration.
• New depth-based individual well bonds replace the previous flat-rate structure, allowing bond amounts to more accurately reflect the anticipated costs of plugging and site reclamation.
• A tiered blanket bonding program that determines bond amounts based on an operator's production levels, total number of wells, and percentage of inactive or at-risk wells.
• Supplemental bonding requirements for operators with higher numbers of at-risk wells ensure that financial assurance more closely matches potential reclamation liabilities.
• Periodic bond schedule updates require that bonding amounts be reviewed and adjusted at least every five years, using inflation data to keep financial assurance aligned with actual reclamation costs.
• Enhanced financial safeguards, including requirements for continuous bond coverage, acceptable bonding instruments, and replacement of expired or financially impaired bonds.
• Phased implementation for existing operators, allowing increased bonding requirements to be met through scheduled installments, while requiring new wells and new operators to comply with the updated standards immediately.
• Clearer bond release and forfeiture procedures to ensure bonds remain in effect until wells are properly plugged, sites are reclaimed, and all regulatory obligations have been satisfied.

The division developed the updated bonding program through an extensive rulemaking process that included collaboration with industry representatives, stakeholders, and the public. The revised rules provide a more accurate and sustainable financial assurance framework while maintaining a predictable regulatory environment for responsible oil and gas development in Utah.

Overall, the updates are intended to encourage responsible well management, reduce the potential for orphaned wells, and help ensure that operators, rather than taxpayers, bear the costs of plugging and reclamation.

To view the updated rule, visit https://adminrules.utah.gov/public/rule/R649-13/Current%20Rules?searchText=R649-3.