02/17/2014
Matt Zborowski
Staff Writer
Amid the many issues that are debated, exaggerated, and understated relating to oil and gas drilling and production, the prevalence of unplugged and abandoned, or "orphaned" wells is one that until recently had been largely overlooked. In addition to the unsightliness of decades-old equipment that's often left behind at the site of the old wells looms the possibility that many of them could pose a threat to the environment or to public safety.
Scientific America in 2011 estimated—with emphasis on estimated—that as many as 12 million wells may have been drilled in the US over the past 150 years. No one truly knows how many of those holes exist because, well, not every drilling site throughout history has been documented. Now that drilling activity has increased both in the US and elsewhere, thanks in large part to the unconventional oil and gas revolution, the estimated total of wells is expected to explode. But when the boom cools, the dust settles, and those wells cease operations, more orphans are likely to emerge, burdening their individual parent states with how best to plug and abandon them.
Wyoming's proposal
Some states have initiated steps to remedy the issue, primarily fearing that groundwater could be contaminated. Wyoming currently estimates the presence of more than 1,200 orphan wells within its borders, and that number could reach 5,700 with the ongoing boom in drilling. As a solution, Gov. Matt Mead has devised a $3 million plan that includes developing an aggressive, prioritized 4-year schedule to properly plug orphan wells.The state hopes to make accounting for orphan wells more accurate by resolving data gaps at the Wyoming Oil & Gas Conservation Commission and US Bureau of Land Management, as well as reduce possible cost by reviewing bonding levels to ensure producers are putting up adequate financial resources, providing insurance in case of default.
In a response to the state's proposal, the Environmental Defense Fund (EDF) asserts the true cost could be nearly tenfold the $3 million he proposed. Recognizing that funding such an undertaking could be precarious for most states, the organization suggested increasing the conservation tax, adding a surcharge to regular operator fees, increasing outdated bond amounts that were set decades ago, and reviewing the maximum blanket bond level.
Texas' solution
The Texas Railroad Commission maintains a comprehensive online database of abandoned wells in the state, allowing anyone to search for them by type, district, county, field, operator, and API number. It also provides an Excel spreadsheet listing the most recent tally of orphan wells, which it defines as "inactive noncompliant wells that have been inactive a minimum of 12 months and the responsible operator's Organizational Report (Form P-5) has been delinquent for greater than 12 months."For December 2013, the commission documented 5,993 orphan wells within the state's borders. Further information that can be gleaned from the document includes, for example, that Brave Heart Resources Inc. is a major offender in Humble, Harris County.
In line with much of what the EDF outlined for Wyoming, Texas tackled the issue by raising its fund cap to $30 million; adding surcharges on operator fees calculated at 150% the original fee amount; increasing its maximum blanket bond level to $250,000; adopting a statute that prohibits future permits for "bad operators" that abandon wells; specifying that during water well conversion, a well must be plugged back so the depths below usable quality are isolated; and specifying that nonoperators with interest in an operation are also responsible for plugging the well.
The measures Texas has taken to reduce the number of orphan wells are designed to ensure that new drilling in exploration and production hubs such as the Permian and Eagle Ford will be plugged once their production lives end. If Wyoming follows, the same might happen in its active Powder River basin. As other states act on the issue, the residual environmental risk that accompanies the death of a well will be reduced nationwide, making the issue one less substantive gripe for opponents of domestic oil and gas exploration.
