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. […] Fracking Bust – US Shale Gas Boom Goes Bust But Who Will Pay To Abandon The Wells? […]


  2. And they say we don’t need regulation or inspection of these gas drilling sites. And now they want to build more pumping and pipelines to transport this gas to export terminals after liquefying the gas as LNG for export. I thought we needed this gas for our “energy independence” and as a” transition fuel”, until renewable energy is ready to replace fossil fuel? As usual, the people and the taxpayers are left holding the bag. This has happened in the past with oil, coal, mining ore for smelting and extraction and for timber. Isn’t the “unregulated invisible hand of the free market” just grand in protecting us from environmental harm?

  3. Paul Bodnick Says:

    Please join us on Face Book Group: No Fracking Way


  4. […] 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.’ Read more … […]


  5. […] Fracking Wells Abandoned in Boom/Bust Cycle. Who Will Pay to Cap Them? – from ClimateCrocks.com – “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.” […]

  6. LA Straight Says:

    I am sure the land owners were paid quite handsomely for the use of their land. There was no complaint when they were accepting the money from the companies. Now they complain about such things. People are being paid hugh sums for their land.

    • dumboldguy Says:

      “THEIR” land? Yes, there is much hypocrisy in individual landowners whining about what has happened to “their” land after they invited it to be destroyed for private gain. There is much hypocrisy in the citizens of Wyoming whining about what they have allowed to be done to “their” beautiful state in the name of private gain for the free-marketers and the state’s “economy”. There is much hypocrisy in the citizens of the U.S. allowing large parts of the country to be turned into “sacrifice zones” as long as it’s NIMBY and it keeps energy costs low.

      If the land belonged to anyone, it was the Native Americans who occupied it for 10,000 years before the Europeans brought havoc to them and the environment. At least the N.A. held the land in common trust and tried to “live with nature”. Too many of the present “owners” have no idea what that means.

  7. John Hopkins Says:

    And how much were the so called “land-owners” paid? Their profit just went out the window as they must help clean up mother nature.

    • dumboldguy Says:

      The landowners leased the mineral rights to the gas and oil companies and pocketed money up front and royalties later as the wells produced. I have little knowledge of how these leases work, but would suspect that there is no requirement for the landowner to clean up after the oil and gas companies, and if the companies go bankrupt, the landowner either lives with the mess or takes his $$$, abandons the land, and moves to Florida. After all, Mother Nature will make all look good in a few thousand years.

      Does anyone have any expertise here? Christopher A? Just how much money do these leases generate for the landowner?


  8. […] gas much worse than CO2, or into water to come out of taps as flammable water (I kid you not).    New York Times is reporting thousands of abandonned wells. Once they are sucked dry, the company that drilled them shifts profits to a parent campany, […]

  9. Akira Bear Says:

    Koch Industries should pay for it instead of the taxpayers they continually take advantage of in their rush to destroy the planet for a profit.


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