Conclusion:  California Says:

(On August 17 Part I of this post began as a California issue, but it turns out – this problem is nationwide.)

Gas and oil well owners just walk away from their wells, and somehow we taxpayers are responsible for cleaning up their mess?

Yes, says this article:

“When oil and gas companies go bankrupt or stop taking care of their equipment, their wells fall into the state’s hands.”

This makes no sense to me.

I wondered if all these wells were on state lands, and since states issue drilling permits, in some twisted way that makes the states (and the state taxpayers) responsible?

Not so.

In this story:

We meet a guy in Wyoming named Bill West.  There are “more than a hundred defunct natural gas wells on his 10,000-acre property.”

Two decades ago West gave a Michigan-based company permission to drill for coalbed methane on their land.  “We got quite a lot of money out of it, lease money,” said West.

Orphan well, Wyoming.

The wells changed hands, and the company that bought the wells – High Plains Gas, Inc. – went out of business four years ago, leaving behind fuse boxes, internet boxes and thousands of feet of underground pipe.

West made a lot of money from the drilling on his property, so surely he’s now responsible for at least some of the mess, right?

Wrong.

“‘They just walked away and left everything sitting,’ said West.  It’s up to the state to take care of it now.’

What’s wrong with this picture?

The NPR article quote Jill Morrison, executive director of the Powder River Basin Resource Council, an environmental group in Wyoming:

“‘…the industry has not been held accountable by the regulators and by the government to pay the cost of doing business.’

“‘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.”

Orphan well, Louisiana.

“That means making companies pay the full cost of plugging wells even before they start drilling.”

In other words, when companies get a permit to drill, they should pay a hefty bond that covers the cost of plugging and reclaiming the well.  If they plug the well themselves, they get the money back.  If they don’t, the state would have the money on hand to do the job.

The companies are – of course – opposed to this idea.

You and I are handed the tab.

My takeaways?

First:  I did not know there were 35,000 orphaned gas and oil wells in California.  I didn’t know that some of them are leaking methane.  I didn’t know that when that happens, other chemicals like benzene, a known carcinogen, and volatile organic compounds that are the building blocks of smog, are also often being emitted.

Second:  California taxpayers (but NOT just California taxpayers – keep reading) appear to be on the hook for fixing this mess.  According to the earlier Associated Press article:

Orphan well, Kansas.

“In June, California Governor Gavin Newsom signed a budget that includes participation in a global effort to slash emissions call the Methane Accountability Project.  The state will spend $100 million to use satellites to track large methane leaks in order to help the state identify sources of the gas and cap leaks.”

Um…excuse me?  The “state” will spend $100 million?

No.

The state taxpayers will spend.

In addition, says the Associated Press article,

“A new [California] Senate proposal would provide hundreds of millions of dollars to plug wells and reduce pollution from them, especially in hard-hit communities.”

Just put it on my tab.

Third:  Orphaned oil and gas wells aren’t unique to California – they’re all over the country:

According to this news release:

“The Environmental Protection Agency estimates that there are 3.3 million abandoned wells around the country that are orphaned or idle.”

Enter your federal tax dollars!

This news release says the federal government…

“…has allocated $4.7 billion for orphaned well site plugging, remediation, and restoration activities.”

That would be $4.7 billion of our tax dollars allocated to 26 states to “address orphan wells” that you and I didn’t create, didn’t profit from, but somehow are responsible for.

And it appears we are responsible, because if we don’t clean up the orphan wells that the companies abandoned…

Then some, or many, of the estimated three million+ orphan wells in this country will keep on leaking methane and other gases into the air, increasing climate change; causing health problems and even death; and possibly causing explosions.

Bad for climate change, bad for our health…

And bad for this homeowner:

According to the story, a man named Bruce George owned three abandoned natural gas wells in Bradford, PA.

In February 2011, according to the Department of Environmental Protection’s investigation, one of the wells, about 300 feet from the home, caused an explosion.

The explosion destroyed the home.

Fortunately, homeowner Thomas Federspiel was outside of his home.

And at least – in this rare case – the abandoned wells owner was held accountable.

And perhaps more companies will be held accountable by states, starting with Colorado:

“Oil and gas companies in Colorado will now have more financial responsibility to plug aging wells and remove contaminants from surrounding areas under new rules approved by state regulators this week.

“It’s the first overhaul of the financial assurance process for oil and gas companies in decades, according to the Colorado Oil and Gas Conservation Commission, which unanimously passed the rules Tuesday.  The commission requires oil and gas companies drilling in Colorado to secure bonds as a guarantee to plug wells that are no longer being used.

Orphan well, Colorado.

“In a statement, Commission Chair Jeff Robbins called the regulations, ‘a model that is now the most robust in the country with by far the highest financial assurance requirements.’” 

So – circling back around to my home state…

Heads up, California – Colorado is way out in front here.

In this situation, Colorado is proving itself the most proactive, forward-thinking, lead-the-way, first-in-the-nation state.

Not only is California not measuring the amount of methane gas leaking from orphan wells, now it’s lagging behind Colorado in addressing future wells issues.

The story above about Colorado is hopeful news, going forward.

But what about those millions of abandoned wells already in the U.S.?

Congratulations, taxpayers!

You’ve just become new parents…

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