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Sunday, July 20, 2014

A gift from or for conventional operators?


By Laurie Barr/ Save our Streams PA

Photo of Card Creek gas field, Roulette, PA

The bonding that Pennsylvania requires oil and gas operators to post does not cover plugging and reclamation of the wells they drill and operate.
Required bond simply wasn’t set high enough in 1984 when the Oil and Gas act was enacted to encourage plugging.* Not much has changed since. Some operators plug, some operators abandon and others choose door number 3.
What’s Behind Door Number 3?
One of the oil and gas regulator’s dirtiest little secrets, inactive well status.
One well at a time, year after year the inactive well inventory grows. According to the department’s online database, many conventional operators have accrued massive inventories of “inactive” wells. And as more of their wells dry up, their number of producing wells shrinks and the number of depleted wells proportionally grows.   

“Inactive” well status provides a safe haven for Pennsylvania’s independent oil and gas operators. Some simply can’t afford to plug their wells. A large number of these wells will never be placed back into production, remaining idle as their seals deteriorate, leaking oil, natural gas and other fluids.
Peter Pan regulators have watched as some of Pennsylvania’s independent operators continue to dig themselves into deep financial doo doo, meanwhile, “mum’s the word.”

Oil Patch Highlighted in Video

According to an editorial titled “Pa. House, Senate consider bills on oil, gas regulations”  By Laura Legere, published on June 24, 2014,  two trade groups  "have publicly touted the conventional industry’s ‍historical and ongoing economic significance in a brochure and video distributed to legislators while privately pressuring the Corbett administration to rein in environmental regulators."

In Feb of this year the DEP held a number of public hearings across the state, one of these hearings were held at the Warren County Courthouse. Members of the public were given an opportunity to provide testimony on the proposed changes to conventional and unconventional oil and gas regulations. Scores of people testified.  The courtroom was packed mainly with conventional oil field workers and operators who appealed to the board, asking regulators to take it easy on them citing the fear that the proposed changes would cause them financial hardship.
And it’s true. Many of the older independent producers are struggling to get by. And they wind up cutting corners to remain profitable, much to the detriment of the environment. For many, this has been the routine for decades. 
 Photo by Laurie Barr, Conventional well on left and unconventional well on right

According to a recent Pittsburgh Post-Gazzette article, by Laura Legere published on July 16, 2014, the DEP decided to divide the "Oil and Gas Wells" chapter of Pennsylvania's environmental protection regulations in two: Chapter 78 for conventional wells and Chapter 78a for unconventional wells.
A rose by any other name …
78 or 78 a does it matter?  The following is from page 21of Chapter 3 of an EPA document published in 1987 titled “Oil and Gas Damage Cases”  
The Northwestern area of Pennsylvania has been officially designated as a hazardous spill area in 1985 by the U.S. Environmental Agency because of the large number of oil waste discharges that have occurred there. Even though spills are accidental releases, and thus do not constitute wastes routinely associated with the extraction of oil and gas under the sense of the §3001 exemption, “spills” in this area of Pennsylvania appear to represent deliberate, routine, and continuing illegal discharge of waste oil.
Willful breeching of pits, opening tank battery valves, and improper oil separation has resulted in an unusually high number of sites discharging oil directly to streams. Despite the new regulations, these discharges appear to be continuing. The issue was originally brought to the attention of the State through Federal investigation of the 500,000 acre Allegheny National Forest that discovered 500 separate spills.”
The EPA declared a four county area encompassing McKean, Warren, Venango and Elk counties as “a major spill area” in 1985.
Today (2014), in the Allegheny National Forest (ANF) along Route 321 a 50’ long piece of green sheet- plastic (similar to green garbage bag material ) is laid on the ground from the top of a hill at street level , downhill ending  just above a stream.  It appears to be a fluid sluice.
Recently (Spring of 2014)  in Duke Center a crew hired to clean-out and plug abandoned wells cut corners by not using pit liners. Oil was pumped out of the wells into the nearby unlined pits, in a wetland, along a creek. The oily pits were then buried, all under the watchful eyes of Pennsylvania’s O&G regulators. Removing the oil from wells into containment for proper disposal is part of the well clean-out and plugging process. The pit liners protect the environment.
Photo by Laurie Barr, Recently (2012) abandoned oilfield equipment.
Oil patch workers often scavenge parts from abandoned oil fields to keep operations going. Well sites have been dismantled. Metal casings, gathering lines and other related well-site infrastructure has been removed and sold for scrap.
Where scavengers have removed the entire well-site infrastructure, wells are often difficult and costly to locate. Many wells can only be located with sophisticated equipment such as ground penetrating radar.

Scavenged oil and gas fields pose a greater risk to the public’s safety.
Photo by Laurie Barr, Plywood covering an unplugged well in Lawrence County, PA

Margaret Henry of North Beaver, PA recently discovered a soggy piece of plywood along the Stavich Bike Trail, in Lawrence County. The board was covering an unplugged oil well. The well apparently has no casing. It’s simply a deep oily hole, covered with a sheet of warped plywood. The well is identified in the PADEP’s (online) database as an unplugged, abandoned well.
It seems like simple common sense to require operators to post bonds equal to the amount it costs to plug the wells. I guess that is too much to expect.
Officials won’t dare touch the plugging bond “hot-potato.”
They’ve donned their oven-mitts in the name of thousands of inactive and unplugged wells and they’re throwing that puppy as far past the gubernatorial election as possible.
One day it’s going to land in the lap of someone who didn’t get a copy of the brochure or video the trade groups gave to our legislators. A little gift could be a powerful thing.
It’s not getting any better…
Contrary to what many believe, when a well is abandoned by the operator, and the bond is forfeited, that forfeited bond doesn’t go toward plugging that particular unplugged well. There is no guaranteed funding mechanism in place to insure that particular abandoned well gets plugged.
According to a Carnegie Mellon University study titled Economic Incentives and Regulatory Framework for Shale Gas Well Site Reclamation in Pennsylvania, published in 2011 "The Oil and Gas Act prohibits private landowners from securing financial assurances from the operator independent of Pennsylvania regulations."
There is no such thing as a permanent plug
Some plugs last 20 years, however many have much shorter life-spans. Cement plugs crack and shrink overtime, none are permanent.
In Sabinsville, PA., a gas well which was drilled in the 1930’s required re-plugging in 2012. This well is located near the edge of an underground gas storage field. This was the third time the well needed plugging since the mid 1970’s.

In Duke Center, PA oil is currently leaking from wells that were plugged in the spring of this year (2014). Seven wells were plugged; six began (slowly) leaking gas within weeks of the plugging.

The legacy these oil and gas producers will leave is thousands of unplugged wells and plugging re-plugging monitoring and maintenance will be subsidized by future Pennsylvanians.
* See: Economic Incentives and Regulatory Framework for Shale Gas Well Site Reclamation in Pennsylvania, Page 3, “PENNSYLVANIA BONDING REQUIREMENTS ON PRIVATE LANDS DO NOT INCENTIVIZE RECLAMATION”