A set of bills designed to reform how the state cleans up thousands of abandoned oil wells is making its way through the Legislature, despite some opposition from the oil and gas industry.
The Courier reports Sen. Bret Allain, R-Franklin, spearheaded the effort last year by creating a task force of oil and gas industry leaders, state government officials and business leaders to recommended steps to tackle the so-called orphaned oil wells. Allain has argued that abandoned wells are a safety hazard and a potentially significant legal problem for the oil and gas industry.
“I think it’s past time that we start addressing the population of orphaned wells in this state to get them down as low as we can,” Allain said Thursday.
A report released in 2014 by the legislative auditor found that the Department of Natural Resources’ Office of Conservation was not properly regulating and inspecting the state’s 57,819 oil and gas wells, and was not effectively managing wells that were long-abandoned by operators. As of July 2013, there were 2,846 orphaned wells that have not been plugged, the report found.
The state did not issue orders to plug more than 85% of inactive wells reported by operators as having no future use, even though they pose environmental and safety risks, the report found.
The report included 21 recommendations for how the Office of Conservation should deal with orphaned wells, and Allain said the agency has taken steps to address those issues. The report contained three additional recommendations for the Legislature to consider to help address the issue.
On Thursday the Senate Natural Resources Committee approved Allain’s Senate Bill 371, which allows the state to more easily collect cleanup costs for plugging abandoned wells from past operators.
Currently the Department of Natural Resources can only try to recover cleanup costs from past operators once the tab exceeds $250,000. SB 371 would lower the bar to $50,000 for a land-based cleanup and $100,000 for a water-based cleanup. The changes would not take effect until the price of oil goes above $60 a barrel under an amendment added to the bill before it was approved.
“We’re not wanting to add to the burden of the oil and gas industry,” Allain said.
Tyler Gray, Louisiana Mid-Continent Oil and Gas Association attorney, said lowering the threshold could create difficulties for an industry that is already ailing from the low price of oil.
“There are a lot of alternative and creative ideas by which we can reduce the number of orphaned wells in the state and we just don’t believe that this is one of them,” Gray said.
