Friday, May 24, 2024

Orphaned oil wells are one problem but inactive wells are potentially much bigger

by BIZ Magazine

By Wes Muller, Louisiana Illuminator

Louisiana leaders took a victory lap last week for their quick work in plugging 100 orphaned oil and gas wells in just two months. But even that pace may be just barely enough to keep up and doesn’t address over 20,000 other wells that could present environmental and safety risks.

Gov. John Bel Edwards and Louisiana Department of Natural Resources (DNR) Secretary Tom Harris announced last week that contractors completed work on 103 orphaned well sites in the Shreveport and Monroe areas this year.  

Using money from the federal Bipartisan Infrastructure Law, the state has about a dozen crews that will be working continuously through October to remediate old well sites. In a phone interview Tuesday, DNR spokesperson Patrick Courreges said the agency hopes to plug 400 to 500 wells this year. 

Plugging that many wells in a year is no small feat and is about double what the state normally completes annually. Complete remediation might seem like an attainable goal for the roughly 4,500 total orphaned wells in Louisiana, but that number doesn’t tell the entire story. 

A more sobering figure is the total number of inactive oil and gas wells in Louisiana: 21,357. Nearly half of those have been inactive for over five years. 

DNR regulations allow wells to remain inactive for up to five years before they must be plugged. However, owners who don’t want to plug a well can classify it as having a “future utility” for producing oil or gas as long as they pay a $250 annual fee. A well can maintain that status virtually indefinitely.

Some inactive wells can be just as environmentally hazardous as orphaned wells, specifically those with methane leaks that are only visible through infrared imaging systems. 

Environmental Defense Fund advocates want state regulators to do more to detect and prevent methane leaks. 

“Only a very small fraction of those wells will ever return to service,” EDF spokesperson Elaine Labalme said.

To operate an oil or gas well in Louisiana, the owner has to put up a bond to cover the costs of cleanup and abandonment. However, this financial security is sometimes not enough. The Department of Natural Resources tried to increase bonding requirements, but the Louisiana Legislature reversed that change, Courreges said.

“That was right around the time [oil] prices had dropped,” Courreges said. “Companies were going out of business and wanted the legislature to do something.”

Even the number of officially orphaned wells is a moving target.

Two years ago, there were about 4,300 in the state. Last year, there were roughly 4,600. The number is continuously in flux because for every well that is capped and struck from the list, more are added. In 2022, DNR added approximately 326 new orphaned well sites, according to the lists the state publishes monthly in the Louisiana Register. 

It’s not unusual for the list to get longer with each passing year, especially if there’s a downturn in the oil market, Courreges said. It’s only because of the federal money that the list will likely shrink this year. 

“Does that fix the problem? No, it does not. It absolutely does not… It could well continue to pile on over the longer term,” Courreges said.

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