Saturday, April 13, 2024

Louisiana eclipses previous record for plugging orphaned oil wells

by BIZ Magazine

By Victor Skinner | The Center Square contributor

Contractors working for the state plugged more than 500 orphaned oil and gas wells through the first half of 2023, tripling the average yearly pace with the help of $37.7 million in federal funds.

Louisiana Department of Natural Resources Secretary Tom Harris recently announced contractors have plugged 519 orphaned oil and gas well sites since mid-January, surpassing the yearly record by the state’s Oilfield Site Restoration program by 239 wells.

The pace roughly triples the average OSR full-year plugging figures over the past several years, accelerated by federal grants totaling $37.7 million from the infrastructure law passed by Congress in 2021.

Harris said the funding helped to attract larger contractors, including two selected by the DNR that have been working with a dozen crews. The work, he said, is expected to continue through October.

“We had hoped the (infrastructure law) funding would allow us to plug about double the average number of wells our state OSR program has plugged in recent years, which is about 160, but we’ve more than tripled that with about two months to go on the grant funding,” Harris said.

“DNR staff and our contractors were very motivated early on to set a strong pace to get ahead of the game before spring weather slowed them, but weather has not been the problem we feared, and they have held a pace that could see us double our highest number of orphaned wells plugged in a single year,” he said.

The Office of Conservation identifies the wells as not having a responsible operator due to business closures or an unwillingness to maintain the sites in compliance with state regulations. Downturns in the prices of oil and gas in recent years have contributed to a total of 4,500 such sites in Louisiana, with more than 3,100 in the Shreveport and Monroe districts in the northern part of the state.

An initial federal grant of $25 million through the Department of Interior awarded in January 2022 doubled the state’s typical budget for the OSR program, another $12.7 million from the U.S. Fish and Wildlife Service will plug orphaned wells on federal wildlife refuges.

Louisiana officials are optimistic the substantial progress this year will bode well to increase future grants in later rounds of federal funding to continue the work. The DNR also uses the funding to establish protocols and programs for methane and water quality testing; address impacts on disadvantaged communities from orphaned wells and create jobs to restore the oilfield sites.

“The work we’ve been able to accomplish in Louisiana using (infrastructure law) funding is nothing short of transformational,” Gov. John Bel Edwards said, thanking Louisiana U.S. Rep. Troy Carter and U.S. Sen. Bill Cassidy, who supported the law.

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