Capping Wells to Employ Oil Workers

Workers laid down Wyoming’s last operating gas rig this week in Sweetwater County, dropping the state’s total rig count to zero, a jolting reminder of the economic devastation caused by the COVID-19 pandemic.
This marks only the second time the state’s rig count has reached zero since 1884, according to Pete Obermueller, executive director of the Petroleum Association of Wyoming. At the time, Wyoming was still a territory.
The state’s rig count temporarily reached zero on June 26, according to Baker Hughes, but inched back up to one rig the week after.
“It is historic, but not in a great way,” Obermueller said. “There are so many jobs attached to these rigs, and now, people are painfully learning so much revenue is attached too. It’s mind boggling and hard to capture the impact.”
The Petroleum Association of Wyoming estimates one lost rig translates into 100 lost jobs.

Phys. org:

New research released by Columbia University’s Center on Global Energy Policy and Resources for the Future (RFF) examines the environmental and job creation benefits of plugging orphaned and abandoned oil and gas wells. The report authors estimate that a federal program to plug roughly half a million abandoned and so-called “orphaned” oil and gas wells—those where the owner is unknown or insolvent—could create as many as 120,000 jobs and reduce pollution.

“Amid this historic economic downturn, a large federal funding program to plug orphaned and abandoned oil and gas wells could deliver stimulative impact by boosting employment quickly in the struggling oil and gas sector while also reducing the emissions that cause climate change,” said report coauthor Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia SIPA. “With more than 20 million Americans unemployed in the face of COVID-19 shutdowns, plugging abandoned oil and gas wells could create tens of thousands of new jobs while cutting greenhouse gas emissions.”
While states and the federal government fund well plugging activities through bonding requirements, industry fees and other sources, the researchers focus on the impacts of plugging well sites that date back to the 19th and early 20th centuries, when regulations—including bonding requirements—were weak or nonexistent. Estimates for the total number of orphaned and abandoned wells range from several hundred thousand to 3 million.
“Practically speaking, industry could scale up this week to begin plugging abandoned oil and gas wells,” said report coauthor Daniel Raimi, senior research associate at RFF. “In today’s low oil price environment, the skilled labor and equipment required to do this work is readily available. The question now is one of appetite, and of scale.”

The report finds that these efforts would have both short- and long-term environmental benefits: plugging orphaned wells can reduce local air pollution and safety risks while slashing greenhouse gas emissions at a cost well within the range of other policy options. Unplugged oil and gas wells impose heavy climate costs, risks to local environments, and public safety concerns. These wells can leak liquids like oil and brine, and emit methane and other air pollutants that damage local air quality and contribute to climate change.

NPR:

Half a dozen men in hard hats watch as their construction rig rises more than 100 feet. On top, an American flag flutters in the sun. At the work site in Adams County, Colo., northeast of Denver, the crew is preparing to close off an abandoned well.
Instead of drilling a mile beneath the surface to extract oil, they’re about to rip pipe out of the ground. In its place, they’ll leave concrete plugs strong enough to seal the hole permanently.
The well in question is known as an “orphaned well.” When oil and gas companies go bankrupt or stop taking care of their equipment, their wells fall into the state’s hands.
Thus, the term “orphaned.”
As the Trump administration looks to roll back regulations to boost the oil and gas industry, more states with growing energy production are grappling with how to handle these types of wells, some of which pose a danger to nearby homes and schools.
The EPA estimates there may be more than 1 million of these orphans scattered across the country.
Last year in Colorado, the state Legislature approved a tenfold increase in funding for orphaned well cleanup. States like Alabama and Ohio have followed suit. As did Pennsylvania, where the state Department of Environmental Protection estimates there could be up to 560,000 abandoned wells.
This led to crews like the one working northeast of Denver, which are saddled with demanding schedules, heavy equipment, explosives and other factors that make working conditions dangerous.
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There are a variety of ways wells become abandoned. In the case of the one northeast of Denver, the owner got sick about three years ago, racked up violations and lost his drilling rights, according to state records.
The Colorado Oil and Gas Conservation Commission knows of 275 orphaned wells and 422 associated locations or facilities. There are likely many more.
In Wyoming, thousands of wells were orphaned in 2014 after a coal bed methane bust. Their owners lacked the money to clean them up, so they became the state’s problem.
In response, the Wyoming Oil and Gas Conservation Commission expanded its cleanup program. It has since plugged more than 2,300 wells. Crews have also repurposed more than 100 into new water wells.
Jill Morrison, executive director of the Powder River Basin Resource Council, an environmental group in Wyoming, says every state that has oil and gas is struggling with the cleanup task “because the industry has not been held accountable by the regulators and by the government to pay the cost of doing business.”
Morrison also worries another bust could put Wyoming’s orphan well program budget over the edge.
“We’re going to quickly be in the tens of millions of dollars responsible for plugging and reclaiming oil and gas wells if we don’t require upfront bonding,” she said.
That means making companies pay the full cost of plugging wells even before they start drilling.
Mark Watson, WOGCC supervisor, says he’s less concerned about a similar situation happening again. He points to a law passed in 2016 that allows the state to examine an operator’s financials prior to drilling.