Fracking Wells Abandoned in Boom/Bust Cycle. Who Will Pay to Cap Them?

January 4, 2014

frackwells

NYTimes:

The companies that once operated the wells have all but vanished into the prairie, many seeking bankruptcy protection and unable to pay the cost of reclaiming the land they leased. Recent estimates have put the number of abandoned drilling operations in Wyoming at more than 1,200, and state officials said several thousand more might soon be orphaned by their operators.

Wyoming officials are now trying to address the problem amid concerns from landowners that the wells could contaminate groundwater and are a blight on the land.

This month, Gov. Matt Mead proposed allocating $3 million to pay for plugging the wells and reclaiming the land around them. And the issue is expected to be debated during next year’s legislative session as lawmakers seek to hold drilling companies more accountable.

“The downturn in natural gas prices has forced small operators out of business, and the problem has really accelerated over the last couple of years,” said the governor’s policy director, Shawn Reese. “Landowners would like their land to be brought back to a productive status and have orphaned wells cleaned up.”

Drilling companies in Wyoming typically lease land from the state, private owners or the federal Bureau of Land Management, depending on who owns the mineral rights.

The state’s Oil and Gas Conservation Commission already budgets $1 million a year to plug abandoned wells. And under the governor’s proposal, the commission would appropriate another $3 million over the next four years in an effort to restore property value and reduce the risk of contamination.

The money would come from a conservation tax that oil and gas companies pay.

Still, given the number of wells already abandoned and the concern that more will soon be deserted, the money is not expected to go far. The state estimated that closing the 1,200 wells already abandoned would cost about $8 million.

One such company, Patriot Energy Resources, which owns about 900 idle wells on state and private land, said in an October letter to Governor Mead that it was $1.9 million short of full bonding on those wells after the bankruptcy filing of Luca Technologies, its parent company.

Patriot has proposed allowing another drilling company to take on a part of its debt, saying it will have to abandon its wells otherwise. “Without this deal or something similar, Patriot will be forced to file for bankruptcy and turn these wells and reservoirs over to the state of Wyoming,” a company official wrote in the letter.

Renny MacKay, a spokesman for Mr. Mead, said the state was weighing the offer.

State Senator John J. Hines, a Republican who represents mineral-rich Campbell and Converse Counties, said it was vital for lawmakers to take up the issue swiftly, because natural gas was so important to Wyoming’s economy.

“All of this just came to a head at once,” said Mr. Hines, who heads the Senate’s minerals committee.

Last spring, Mr. Hines was told by Patriot that the hum of gas drilling activity on his own sprawling cattle ranch would soon grow quiet.

Soon after, the company, which leased parcels of Mr. Hines’s land, disappeared completely — leaving behind more than 40 coal-bed methane wells and a jumble of pipes and pumps.

“They informed me that they were shutting down because they were short of funds,” Mr. Hines said. “All of it, in my opinion, needs to be cleaned up.”

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40 Responses to “Fracking Wells Abandoned in Boom/Bust Cycle. Who Will Pay to Cap Them?”

  1. caadfael Says:

    GROW HEMP !!
    More rope is needed !!


  2. […] * Fracking Wells Abandoned in Boom/Bust Cycle. Who Will Pay to Cap Them? […]


  3. Mr. Hines feels the public should pay for repairing the damage done when his business deal went sour? Public risk, private profit? Must be a Republican.

    • dumboldguy Says:

      Of course he’s a Republican, and of the sub-set “greedy rich who want to get richer by privatizing gain and socializing risk”.

      The irony of it all is that he probably fought against any kind of regulation or “prior restraint” on the rapaciousness of the drillers that might have kept his private mess from occurring. I hope he ends up bearing the full cost of his clean up—-he likely won’t, though—-he will either get the public to do so or he’ll just take his $$$$, abandon the land, and move to Florida.

        • dumboldguy Says:

          I’m not wearing any “party blinders”, but perhaps you are. It’s telling that you go back two years to a comment Obama made and bring that up rather than his more recent pronouncements on fossil fuels.

          Yep, he and many others Democrats in 2012 and 2014 walked the thin line between BS and truth in order to get elected. If Obama stretched it a bit, good for him—-he got elected and saved us from the disaster of a Republican president named Romney. Too bad so many of the other Democrats that also tried to walk that line failed, Grimes in Kentucky being the one that saddened me the most.

          If you really think that there is little or no difference between Repugnants and Democrats on the question of fossil fuels and AGW, you are deluded (or out of touch with what has been going on in this country).

    • MorinMoss Says:

      Given the results of yesterday’s midterm elections, brace yourself for an utter reversal of progress on all things climate.

      • dumboldguy Says:

        Don’t be so pessimistic—-the Repugnants are now right out front, and will be doing things that will prove to all who their real masters are—-not the people who elected them.

        View the midterms as an opportunity. Chesty Puller had some thoughts on that, and he was awarded 5 Navy Crosses, so he must have known what he was talking about.

        “All right, they’re on our left, they’re on our right, they’re in front of us, they’re behind us…they can’t get away this time.”

        “Great. Now we can shoot at those bastards from every direction.”

        “We’re surrounded. That simplifies our problem of getting to these people and killing them”

      • Fuk Yoo Says:

        the USA political “parties” are both the same wolf in sheeple clothing. They are both controlled by jewish bankers and the AIPAC Isrehell lobby, they are both USA POLITICAL scumbags especially INSANE McCAIN, , Their nickname for INSANE was “songbird”; while a POW as he sung like a bird giving up all the info he had to the N. Viet.’s , then claimed to be a hero after the war! What as asshole!! Heroes don’t get shot down and talk, they fly missions to protect their our troops not carpet bomb civilian women and children with NAPOM, just like war criminals do. Insane McCain is the worst example of crazy asshole Yanky warmongers backed by millions of Guu $.
        INSANE McCAIN ALSO admitted he was chatting with ISIS terrorists and Rand Paul can not know anything about the middle east like insane can because Paul had never had any meetings with the terrorists groups like ALCIAduh… funded by the CIA and other covert military moneybags.
        The US people are the MOST dumbed down population in the western world! They actually believe they live in a democracy hahahah!!! YA… they get to vote for the 2 selected nominees and their votes are manipulated and corrupted by the powers that control the `selections. USA IS NUMBER 1 chant with me now USA NUMBER! USA NUMBER1 repeat ad nausium OK no.1 in IN DRUG USE PRESCRIPTION DRUGS and street drugs, NUMBER ONE IN OBESITY, NUMBER ONE IN WAR AND NUMBER ONE IN LOWEST EDUCATED PEOPLE. MOST Americans CAN`T FIND THE USA ON A WORLD MAP, NOR CAN THEY FIND ANY OF THE COUNTRIES THEY HAVE 1000S OF MILITARY BASES IN`- NOR CAN THEY FIND COUNTRIES WHERE THEY ARE CURRENTLY AT WAR WITH ON A MAP COMPLETELY IGNORANT STOOGES ALL 300+MILLION STOOGES! QWAKQWAKQWAKQWAK HAHAHAHAHA


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