CA State Oil and Gas Well Plug and Abandonments

CalGEM - State Oil and Gas Well Plug and Abandonments

Update (October 10, 2022): CalGEM is releasing for public comment a draft orphan well screening and prioritization methodology​ to ra​nk and prioritize orphan, deserted, and potentially deserted wells for potential state abandonments. CalGEM invites all comments and feedback sent to CalGEMOrphanWells@conservation.ca.gov through October 14​, 2022. ​

​General

An oil and gas state abandonment is the plugging and abandonment (permanent closure and sealing) of an orphan or deserted (or potentially deserted) oil and gas well through a state contract. Because the wells concerned are orphan or deserted, they do not have a financially solvent, responsible operator. Where there is a financially solvent, responsible operator, CalGEM will first pursue a plug and abandonment at the operator’s expense.​

For Contractors

​​For contractors performing public works plugging and abandonment services, CalGEM has provided​ various resources and documents to help ensur​e compliance with applicable laws, regulations, and other requirements.​

​Process for Safely Plugging and Abandoning WellsA well is plugged by placing cement in the well​bore or casing at certain intervals, as specified in California laws or regulations. The purpose of the cement is to seal the well-bore or casing and prevent fluid from migrating between underground rock layers.

Cement plugs are required to be placed across the oil or gas reservoir (zone plug), across the base-of-fresh-water (BFW plug), and at the surface (surface plug). Other cement plugs may be required at the bottom of a string of open casing (shoe plug), on top of tools that may become stuck down hole (junk plug), on top of cut casing (stub plug), or anywhere else where a cement plug may be needed. Also, the hole is filled with drilling mud to help prevent the migration of fluids.​

​State Abandonment Funding

​There are four sources of funds used for state abandonments:

  • The Oil, Gas, and Geothermal Administrative Fund (OGGA) is funded by operator assessment fees. Starting with the 2021/2022 fiscal year, expenditures from this fund to plug and abandon wells are capped at $5 million per year.
  • The Hazardous and Idle-Deserted Well Abatement Fund (HIDWAF) is funded by operator idle well fees and continuously appropriated to CalGEM to plug and abandon wells to mitigate a hazardous or potentially hazardous condition. There are, however, limitations to spending from the HIDWAF – the well to be plugged and abandoned must be hazardous or idle-deserted and must be a “well of an operator subject to the requirements” of PRC section 3206 (idle well regulations).
  • In fiscal years 2022/2023 and 2023/2024, $50 million in California state General Fund dollars are appropriated to CalGEM to plug and abandon orphan and deserted wells – for a total of $100 million dollars over the two years.
  • In August 2022, California was awarded $25 million in initial grant funding from the federal government’s orphan well program authorized in the bipartisan Infrastructure Investment and Jobs Act.  California is eligible for potentially an additional $140 million in future grants.

State Abandonment Authority

The Public Resources Code (PRC) provides various presumptions and circumstances under which CalGEM may find that a well has been deserted. If CalGEM determines a well has been idle-deserted, then CalGEM may order the plugging and abandonment of the well. If an operator fails to rebut such presumptions and fails to commence the ordered work, then CalGEM may undertake the plugging and abandonment of the well. CalGEM’s options for funding the plugging and abandonment differs depending upon the solvency of the operator.

  • CalGEM may find a well to be deserted, and therefore order the well plugged and abandoned, based upon credible evidence. Credible evidence that a well has been deserted includes, but is not limited to, the operational history of the well, the response or lack of response from the operator to inquiries and requests from CalGEM, the extent of compliance by the operator, and other actions of the operator with regards to the well. If such evidence exists, CalGEM may order the plugging and abandonment of the well.
  • CalGEM may order to be carried out or undertake the abandonment of a well CalGEM determines to be a hazardous or an idle-deserted well under PRC section 3255. A hazardous well is a “well that is a potential danger to life, health, or natural resources and for which there is no operator responsible for its plugging and abandonment.” To order or undertake the abandonment of a well under PRC section 3255, a well must not only be deserted – it must also be orphan. CalGEM must assess the financial resources of the operator and determine there is no operator with the financial resources to fully cover the cost of plugging and abandoning the well.

Key Facts

  • California’s crude oil production has declined steadily in the last few decades, increasing the number of nonproductive, or “idle”, wells throughout California.
  • CalGEM maintains an idle well management regime that includes the most rigorous testing standards in the country and collects fees that can be used to fund the plugging and abandonment of deserted and orphan wells—wells that likely do not have a responsible, solvent operator to appropriately plug and abandon the well, leaving their proper abandonment to the State.
  • ​Currently there are over 37,000 known idle wells in California, all of which will eventually come to their end of life, and their operators will be required to plug the wells and decommission associated production facilities.
  • The state has also documented over 17,000 wells that have been idle for over 15 years and over 5,000 wells that are orphan, deserted, or potentially deserted​ wells. Left un-remediated, these wells and facilities can contaminate waterways and soil, serve as a source of climate and air pollutants, and can present physical hazards to people and wildlife.
  • CalGEM may determine the status of a well as deserted based upon specific criteria laid out in the PRC. Evidence of desertion under the PRC includes, but is not limited to, failure to pay idle well fees, the operational history of the well or production facility, the response or lack of response of the operator to inquiries and requests from CalGEM, the extent of compliance by the operator with the requirements, and other actions.

Oil Well Consulting & Investigation – Torrance, CA

Oil Well Consulting & Investigation - Torrance, CA

Terra-Petra Environmental Engineering was retained for our expertise in locating oil wells by a well-known Southern California developer.   Upon investigation on the CalGEM well finder site a single oil well was shown as being within the property boundaries.

Terra-Petra has experienced a consistent inaccuracy with CalGEM’s online mapping system. Considering this, we typically use this website for general information and rely on our tried-and-true methods for physically locating the wells. Part of our process utilizes geophysical locating equipment in an attempt to identify any metallic anomalies having an oil well signature.

For this project, we were able to identify a fully imaged anomaly typical of a steel cased oil well. After mobilizing our excavation equipment, we were able to uncover the anomaly and verify that it was a steel cased well having a 17” diameter steel casing. The well number was found welded on the cover confirming our discovery. Our survey crew was brought out to identify the well’s location based on NAD 83 latitudes and longitudes to an accuracy of 6 decimal places per CalGEM’s requirements.

We are still in the process of verifying the exact location of the well relative to the online mapping systems. At this time, we can say that the actual location varies from what is shown online. The degree to which it varies will be verified soon. 

Learn more about Terra-Petra’s Oil Well Services

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Oil Well Leak Test – Los Angeles

Oil Well Leak Test Services - Los Angeles, CA

Terra-Petra is undertaking, on behalf of a Los Angeles developer, the task to locate, uncover and leak test a single oil well in Los Angeles, CA.  The proposed site will consist of a two-story, raised foundation, single family dwelling. The California Department of Conservation, Geologic Energy Management Division (CalGEM) requested this work to be performed as necessary oil well due diligence.

The tasks performed may encompass a geophysical survey, a well head excavation, a well head survey, and a well head leak test and summary report. All work will be completed in compliance with the California Public Resources Code (PRC) Article 4: Regulation of Operations: Code Sections 3200-3258.

Terra-Petra Oil Field Services

Terra-Petra’s oil field services offer our clients a one-stop shop for all their oil field needs.  Our team will manage your project from start to finish, encompassing everything from initial consultation to the final report and submission of NFA (No Further Action) letter.

With the seemingly endless moving parts involved in successful oil field construction site plan reviewoil well abandonment / re-abandonmentvent cone installationconsulting and more, it’s important to have an expert by your side every step of the way to manage the process and make sure your budget and schedule stay on track.  With Terra-Petra’s hands-on expertise in ALL aspects of oil field management and consulting we stand out amongst other firms in the industry.

America is finally cleaning up its abandoned, leaking oil wells

By Chris Stein, phys.org

California plugs a few dozen per-year, according to the Interstate Oil and Gas Compact Commission (IOGCC), and is currently in the process of sealing 56 near the city of Santa Clarita, just north of Los Angeles, some of which date back to 1949.

Bill Suan bought his family’s cattle farm in the mountains of West Virginia a decade-and-a-half ago with little thought for the two gas wells drilled on the property—but then they started leaking oil onto his fields and sickening his cows.

After taking the operator to court, Suan was successful in plugging one well, but the company has since disappeared, leaving him to contend with a small-scale environmental disaster that’s a symptom of the larger problem of orphaned  across the United States.

“It’s shocking to think that it was like that for decades,” Suan said.

Since the first commercial barrel of oil was extracted in Pennsylvania in 1859, the United States has been at the center of global petroleum production.

But in many US states, it took more than a century to pass regulations governing record-keeping for wells and their sealing, or plugging.

Today, the exact number of abandoned wells nationwide is unknown, but the Environmental Protection Agency this year estimated it to be around 3.5 million.

The EDF estimates around nine million Americans live within a mile of a well that’s considered orphaned, meaning that it’s neither operating, nor has a documented owner.

In southern California’s Kern County, the Central California Environmental Justice Network has received reports of abandoned petroleum infrastructure leaking oil next to schools and homes.

“A lot of the infrastructure that was built, that was now abandoned… is very much centered around poor communities,” said Gustavo Aguirre Jr., the network’s director in the county.

From  in the east where modern oil production began to cities in southern California, where pumpjacks loom not far from homes, the United States is pockmarked with perhaps millions of oil wells that are unsealed, haven’t produced in decades, and sometimes do not have an identifiable owner.

The detritus of lax regulation and the petroleum industry’s booms and busts, many states have struggled to deal with these wells, which can leak oil and brine into water supplies as well as emit methane, a particularly potent greenhouse gas.

In a first, Washington is making a concerted effort to plug these wells through a $4.7 billion fund, passed as part of an expansive overhaul of the nation’s infrastructure.

“The money available to the states (has) never been commensurate to the scale of the problem, and now for the first time it will be,” said Adam Peltz, a senior attorney at the Environmental Defense Fund (EDF) nonprofit.

The funds will likely not be enough to solve the problem entirely, though, and environmentalists warn that the patchwork of state laws governing oil production include many loopholes that could allow companies to continue abandoning wells.

States have largely been left to their own devices when it comes to addressing these wells.

California plugs a few dozen per-year, according to the Interstate Oil and Gas Compact Commission (IOGCC), and is currently in the process of sealing 56 near the city of Santa Clarita, just north of Los Angeles, some of which date back to 1949.

The bulk of America’s orphaned wells are thought to be in eastern states where the industry was born, and where more than 160 years later, it’s not unheard of for landowners to find a hole in the ground or a pipe protruding from the earth that’s leaking oil or brine.

Pennsylvania, which is thought to have the most, plugged 18 orphaned wells in 2020, according to the IOGCC. In the same year, West Virginia, which has thousands of documented orphaned wells, plugged one.

“It’s been decades of neglect, just letting them get away with it, not forcing the plugging regulations,” said Suan, who has had to fence off the unplugged well on his land to keep cattle from getting into the leaked oil.

“And now we’re stuck with all of them.”

Grand jury says Santa Barbara County fails to properly monitor idle oil wells; supervisors disagree

By Mike Hodgson

The Santa Barbara County Board of Supervisors is scheduled to approve a response to a grand jury investigation into 1,374 idle oil wells in the county that disagrees with the findings and rejects the resulting recommendations when it meets Tuesday in Santa Maria.

The response is part of the board’s administrative agenda, which consists of items generally approved in a single vote unless a supervisor pulls one for discussion or for a separate vote or a member of the public asks to comment on one.

Grand jurors made four findings and four recommendations to the board in their report released Dec. 20.

In their proposed response, supervisors wholly disagree with all four findings and say none of the four recommendations will be implemented.

In general, the grand jury found the health and environmental risks from idle wells are not being adequately addressed; the county is too understaffed to adequately monitor idle wells; code provisions requiring drilling equipment and derricks to be removed are not fully enforced; and the county may face financial liabilities from inadequate monitoring.

The “idle wells” referred to in the report are 926 “long-term idle wells,” those inactive for at least eight years, and 448 “inactive wells,” those out of production more than two but less than eight years, identified by the California Geologic Energy Management Division in 2019.

At that time, the county also had 4,215 “abandoned wells,” which had been out of production for two years or more but whose owners or operators applied for permits and followed procedures for taking them out of service.

Those procedures included plugging the wells with cement to prevent hydrocarbons from leaking into groundwater or soil or onto the surface.

Only one well in the county in 2019 was classified an “orphaned well,” where the owner had declared bankruptcy, become insolvent or simply deserted it without taking steps to properly seal it.

The rest of the 1,028 wells in the county at that time were considered “active wells.”

Grand jury’s findings

The grand jury noted oil seeping from both active and idle wells can contaminate the soil and groundwater, and leaking methane gas can cause air pollution.

But the report said because idle wells are usually unattended, the seepage and leaks can become extensive before they are discovered, thus posing a greater risk to the public and environment.

“An example of the effects of seepage can be seen in the Santa Maria Valley, where there were thousands of active oil wells in the past,” the report says. “Some homes in Santa Maria had to be demolished because the area’s soil had been contaminated by seepage from old wells that had not been properly abandoned and plugged.

“There appears to have been no county remedial action on a number of the old wells around Orcutt, and no action by the owner to abandon them,” the report continues. “Abandonment under the required legal procedures would have led to capping. In the absence of capping, the health and safety of the area are not secure.”

The grand jury recommended supervisors direct the Planning and Development Department to identify health and environmental risks and determine actual and potential fiscal labilities from idle wells in annual reports to the board.

It also recommended supervisors direct Planning and Development to maintain enough trained personnel to staff the Petroleum Unit of its Energy, Minerals and Compliance Division and to enforce County Code requirements for removing equipment and derricks from idle wells.

Supervisors’ response

The board’s proposed response says annual Planning and Development, County Fire Department and County Air Pollution Control District inspections of active and idle wells provide sufficient regulatory oversight to minimize risks to public health and the environment.

However, the response says in order to provide annual well inspection data to the public, within one year Planning and Development will launch a public-facing web portal that lists inspection dates and results for each well that’s inspected.

In the proposed response, the board also says it won’t require a report on fiscal liabilities because those are the responsibility of the state and the well operator.

Blame game over O.C. oil spill heats up as pipeline company sues shipping firms

Photo by Allen J. Schaben / Los Angeles Times
Written for LA Times By LAURA J. NELSON, CONNOR SHEETS

Two cargo ships that allegedly dragged an oil pipeline with their anchors during a winter storm should be held liable for a disastrous October oil spill that sent thousands of gallons of crude into the waters off Orange County, the operator of the ruptured pipeline said in a lawsuit filed Monday.

In a 35-page complaint filed in federal court, Houston-based Amplify Energy Corp. accused two shipping companies and their subsidiaries — based in Switzerland, Panama, Liberia and Greece — of improperly allowing their cargo ships to drop anchor near the pipeline and of failing to notify authorities after the damage occurred.

Without the presence of the cargo ship anchors, “the pipeline would not have been displaced or damaged and thus would not have failed,” Amplify said in the complaint.

The Marine Exchange of Southern California, which monitors and directs traffic in the busy San Pedro Bay, was also named as a defendant in the lawsuit. The nonprofit should have been aware of the anchor drags and should have notified the company, the lawsuit said.

The lawsuit also names as defendants the captains and crews of the two cargo ships, the MSC Danit and the Cosco Beijing.

The Coast Guard has designated both ships parties of interest in the federal investigation of the spill, which sent at least 25,000 gallons of crude gushing into the waters off Orange County. An anchor striking and dragging the pipeline could have made the conduit more vulnerable to other damage or to environmental stressors, the Coast Guard said.

Amplify’s lawsuit said that, if company employees had been aware of the damage, they would have deployed a remotely operated vehicle to inspect the pipeline, “detected its dislocation and the damage done to it, suspended operations immediately, and undertaken remedial measures that would have prevented the discharge of oil.”

“We would have immediately assessed the situation and made any necessary repairs,” company spokeswoman Amy Conway said in a statement Monday.

Capt. Kip Louttit, the executive director of the Marine Exchange, said he was not aware of the lawsuit and could not comment. Al Peacock, a lawyer who represents the owners and operators of the Beijing, also said he could not comment. Representatives of the owner and operator of the Danit did not immediately respond to inquiries about the suit.

After warnings of an approaching storm on Jan. 25, 2021, more than 20 container ships left their anchorages in San Pedro Bay and headed to deeper waters to ride out the storm, the lawsuit said. But the Danit and the Beijing remained near the pipeline, the complaint said.

Driven by winds of up to 63 mph and waves of up to 17 feet, both ships — which are longer than a downtown skyscraper — dragged their anchors across the seafloor “and into areas where federal law prohibits anchoring,” the complaint said.

Movement data from the Danit shows the ship began “moving erratically” while broadcasting that it was at anchor, and “zig-zagged” over the pipeline repeatedly over a three-hour period, the lawsuit said.

As the Danit prepared to raise its anchor and head to deeper waters, the Beijing came within about 560 feet of colliding with the other ship, the lawsuit said, citing November court filings by the Dordellas Finance Corp., the Panamanian company that owns the Danit.

The Danit “ceased its anchor-raising operations and took action to avoid a collision” with the Beijing, the lawsuit said. The Danit’s crew eventually sailed away without notifying authorities of any damage, while the Beijing remained at anchor near the pipeline, the lawsuit said.

Given the “proximity between the ships, the length of the chains typically used to anchor such vessels,” and the Beijing’s movements in the area, Amplify alleged that the Beijing also dragged its anchor across the pipeline.

The lawsuit accused both shipping companies of negligence. When a vessel strikes a stationary object, courts presume the vessel is at fault, the lawsuit said.

Amplify is seeking punitive damages, as well as reimbursement for legal fees, the bill to repair and replace the ruptured portions of the pipeline, and the revenue lost while the pipeline has been inoperable.

Amplify is also pushing to require the Marine Exchange to notify owners of undersea property of any potential anchor drags within 24 hours of the incident.

The company also wants the Marine Exchange to block ships from anchoring in areas immediately adjacent to the pipeline when bad weather is likely, writing that “significant vessel traffic and congestion … combined with the ever-present threat of heavy weather, make future anchor-dragging incidents reasonably likely.”

Biden administration to give states $1.15 billion to plug orphaned wells, which leak planet-warming methane

Image Above:  Curtis Shuck, founder of Well Done Foundation, a nonprofit organization based in Bozeman, Mont., that caps abandoned oil and gas wells, observes measurements of leaking methane gas from a capped oil well in June near Shelby, Mont. (Adrián Sánchez-Gonzalez for The Washington Post)

Re-post of original article from The Washington Post


By Tik Root

The White House on Monday announced new steps to help curb emissions of methane, saying it will send $1.15 billion to states to clean up thousands of orphaned oil and gas wells that leak the powerful planet-warming gas.

The Biden administration also outlined plans to enforce requirements for pipeline operators to minimize methane leaks, undertake research to reduce methane emissions from beef and dairy systems, and form an interagency working group to measure and report greenhouse gases around the nation.

Interior Secretary Deb Haaland said in a statement that the new funding “is enabling us to confront the legacy pollution and long-standing environmental injustices” that have long plagued vulnerable communities. “This is good for our climate, for the health of our communities, and for American workers,” Haaland said.

Tens of thousands of abandoned wells dot the country in places where the oil and gas companies or individual owners went out of business, or are otherwise no longer responsible for their cleanup.

The Interior Department reported earlier this month that there are 130,000 documented abandoned wells across the country. And an analysis by the Environmental Defense Fund and McGill University found that about 9 million people in the United States live within a mile of an orphaned well. As recently as 2018, the Environmental Protection Agency estimated that the number of wells could actually be as high as 2 million to 3 million.

“Some might be relatively harmless, and some might be quite dangerous,” said Mary Kang, a researcher at McGill University in Canada who has long studied the problem. The wells can emit a range of gases, she said, including methane, which is the primary component of natural gas. In its first 20 years in the atmosphere, methane has more than 80 times the warming potential than that of carbon dioxide.

“It’s a pretty big problem that’s flown under the radar for a long time,” said Adam Peltz, a senior attorney with the Environmental Defense Fund who also worked on the analysis. He called the White House’s move “a down payment on this problem.”

The $1.15 billion announced Monday is the first tranche of allotments from the $4.7 billion that Congress approved for orphaned well cleanup as part of the fall’s bipartisan infrastructure package. That package also included more than $11 billion in funding for abandoned mine reclamation and $1 billion for modernizing natural gas pipelines, among other measures.

The funds will go to the 26 states that submitted notices of intent to the Interior Department late last year. The allocations range from about $25 million for Alabama, up to $107 million for Texas. More will be spent in the coming months and years as part of grants to states.


Read the complete article on The Washington Post

Los Angeles Moves To End Oil Drilling In The City

Re-post from latimes.com

(Image by Kent Nishimura / Los Angeles Times)

The Los Angeles City Council on Wednesday took steps intended to phase out oil drilling and gas extraction in the city, moving to address the legacy of environmental and health problems caused by an industry that helped create modern Southern California.

The council voted unanimously to support a ban on new oil wells and ordered a study intended to help city officials determine how to phase out existing wells in the next two decades.

Environmental justice activists heralded the vote as long-fought win for the low-income communities of color near the wells and a turning point in city regulations that allow for the extraction of oil and gas in residential neighborhoods.

“No community should be a sacrifice zone,” said Martha Dina Arguello, executive director of Physicians for Social Responsibility-L.A. and co-chair of a coalition of community groups fighting to shut down wells.

Oil wells are known to emit likely carcinogens including benzene and formaldehyde, and living near wells is linked to health problems including respiratory issues and preterm births, studies have found.

Yet storage tanks and oil rigs are hidden behind walls and nestled near homes, schools and youth clubs. Along with health risks, the active sites can bring around-the-clock noise for residents.

Petroleum was once one of Southern California’s biggest industries, with derricks and wells dotting coastal areas from Huntington Beach to Santa Barbara, extending to inland communities including Brea and Echo Park. The industry helped fuel L.A.’s growth in the early 20th century and later provided jobs for veterans after World War II, and also created some of L.A.’s great fortunes and scandals in the prewar years.

The region’s output is not what it once was, but there are still more than 1,000 active or idle wells in L.A., city officials say.

“Oil drilling in Los Angeles might have made sense in the early part of the 20th century, but it sure doesn’t make a lot of sense now that we’ve become a megalopolis at the beginning of the 21st century,” Councilman Paul Krekorian, who represents San Fernando Valley neighborhoods, said at Wednesday’s council meeting.

The motion approved Wednesday directs city attorneys to draft an ordinance that prohibits new oil and gas extraction. The city will also conduct an amortization study to understand whether oil companies have recouped the value of their investments at each oil site.

If companies have recouped those costs, L.A. officials say it will make it easier for the city to shut down the sites.

Rock Zierman, chief executive of the California Independent Petroleum Assn., said in a statement that “shutting down domestic energy production not only puts Californians out of work and reduces taxes that pay for vital services, but it makes us more dependent on imported foreign oil from Saudi Arabia and Iraq that is tankered into L.A.’s crowded port.”

Crude that is produced in California complies with state environmental laws, while imports are exempt, Zierman added.

“Further, taking someone’s property without compensation … violates the U.S. Constitution’s 5th Amendment against illegal search and seizure,” Zierman said.

The L.A. County Board of Supervisors last year took similar steps to phase out oil production in unincorporated areas. The state is moving toward banning new oil and gas wells within 3,200 feet of homes, schools and healthcare facilities, and requiring emissions monitoring of existing wells within those buffer zones.

More than half of the city of L.A.’s active oil wells are in Wilmington, according to Communities for a Better Environment, an environmental health and justice group. The group became involved in the neighborhood in 2007 after residents complained about a massive oil drilling operation run by Warren E&P Inc.

The operation is near homes and a youth baseball field, said Bahram Fazeli, director of research and policy at Communities for a Better Environment.

“It was terrible — people said it was a living hell,” Fazeli said, describing residents’ complaints of asthma attacks and nosebleeds. “It’s still a big hazard to the community.”

A drilling site run by Allenco Energy in University Park brought reports of foul odors, headaches and persistent nosebleeds. The site was ordered in 2020 to shut down permanently after years of legal and political wrangling.

The city has faced persistent criticism from activists for its lack of oversight of the petroleum industry. A 2020 investigation by The Times and the Center for Public Integrity found that the city of Los Angeles has been slow and inconsistent in forcing the petroleum industry to take responsibility for wells that sit idle and unplugged.

Abandoned oil well counts are exploding — now that there’s money on the table

Abandoned oil well counts are exploding — now that there’s money on the table

By Naveena Sadasivam / Grist.org

$4.7 billion released by the Bipartisan Infrastructure Law has states rethinking their abandoned oil well tallies.

It’s long been an open secret that abandoned oil and gas wells are dramatically undercounted in the United States. Now that the federal government is finally offering substantial funding to plug and clean up these environmental hazards, states are finally starting to admit it.

From 2020 to 2021, the number of wells that the state of Oklahoma listed as abandoned — and therefore the government’s responsibility to clean up — jumped from 2,799 to a whopping 17,865. In Colorado, the orphan well tally hovered around 275 from 2018 to 2020 but increased by almost 80 percent last year. In California, the tally almost doubled in the last two years. (It started even lower in 2019, when the state identified just 25 abandoned wells.)

What changed? In 2020, Congress began seriously considering sending states money to plug orphan wells. The proposal had support from both political parties and was ultimately included in the Bipartisan Infrastructure Law enacted in November, which set aside $4.7 billion for this purpose. States have long known that their orphan well tallies are outdated and incomplete, but without a source of funding to clean up the wells, many didn’t invest the resources required to identify abandoned wells. That changed as the funding slowly became a reality over the past couple of years.

Grist / Clayton Aldern / Naveena Sadasivam

The Department of the Interior, which is tasked with distributing the $4.7 billion now allocated for orphan well cleanup, is expected to begin distributing funds this summer. A Grist review of forms submitted to the Interior Department in which states indicated their interest in obtaining federal funding, as well as orphan well tallies reported to the Interstate Oil and Gas Compact Commission, found that official orphan well counts have increased by about 40 percent nationwide in the last year and doubled compared to 2019. That increase was confirmed by the Interior Department earlier this month, when it announced that 26 states had expressed interest in federal funding and had reported more than 130,000 orphaned wells.

“It used to be a larger well count was a sign of significant regulatory failure,” said Robert Schuwerk, executive director of Carbon Tracker’s North America office. “That is still true. However, now there’s an opportunity to get money to plug those wells, so there’s an incentive to get higher numbers to be able to garner more of those federal dollars.”

Plugging Orphaned Oil and Gas Wells Provides Climate and Jobs Benefits

Plugging Orphaned Oil and Gas Wells Provides Climate and Jobs Benefits

For over a century, fossil fuel companies have drilled oil and gas wells in the United States to increase the production, consumption, and export of fossil fuels. These wells are often abandoned once they are no longer profitable, and are sometimes left unplugged or improperly plugged, causing local environmental hazards and contributing to global climate change. The bipartisan infrastructure package, H.R. 3684, includes $4.7 billion to remediate orphaned wells, an initiative that will create new jobs while simultaneously curbing emissions.

In general, abandoned wells are unproductive wells with an identifiable owner, whereas orphaned wells are unproductive wells without an identifiable owner. Across the United States, there are at least 3.3 million abandoned oil and gas wells, about 60 percent of which are unplugged. There are also 56,600 documented orphaned wells in need of remediation, most of which are state and private lands, but thousands of undocumented wells also likely exist.

Unplugged wells leak methane, a potent greenhouse gas 25 times more effective than carbon dioxide at trapping heat in the atmosphere, and other pollutants that contribute to the climate crisis, harm public health, and contaminate water. The Environmental Protection Agency estimates that abandoned wells emitted 290 kilotons of methane in 2018, equal to burning over 16 million barrels of oil. Methane poses such a significant threat to the climate that the recently released Sixth Assessment Report of the Intergovernmental Panel on Climate Change calls for “strong, rapid and sustained reductions” in methane to avert the most significant impacts of climate change.

In many cases, the burden of plugging orphaned wells falls on states. According to Resources for the Future (RFF), “while states and the federal government fund well plugging activities through bonding requirements, industry fees, and other sources, these funds have not historically been adequate to reduce the inventory of orphan unplugged wells.” Current bonding rates on federal lands have not been updated in over 50 years, resulting in inadequate funds to ensure wells are properly remediated. Some unproductive wells have been unplugged for decades due to a lack of funds. With no private party to take responsibility for these wells, taxpayers are on the hook for their cleanup.

In addition to reducing methane emissions, plugging abandoned wells also could produce thousands of jobs. An RFF report estimates that plugging 500,000 wells could create as many as 120,000 job-years (a job-year is one year of work for one person). The number of orphaned wells is tied to cyclical changes in oil and gas prices, and are predicted to increase if oil and gas prices decrease. The report suggests that the federal government should focus on older wells that were abandoned before modern regulations to disincentivize oil and gas companies from abandoning wells in the future.

Employment gains from plugging wells could help offset job losses from the oil and gas industry, which lost an estimated 76,000 jobs from February to June of 2020. Additionally, the skills required to plug wells—a process that often involves sealing wells with cement and remediating land—are similar to those required in the oil and gas industry, which could help facilitate the job transition.

Congress recently passed bipartisan legislation focused on plugging orphaned wells. The Revive Economic Growth and Reclaim Orphaned Wells (REGROW) Act of 2021 (S.1076/H.R.3585), which was integrated into the bipartisan infrastructure bill, will provide $4.275 billion for orphaned well cleanup on state and private lands, $400 million for cleanup on private and tribal lands, and $32 million for research. According to a press release, the legislation aims to plug every documented orphan well in the country.

Terra-Petra Abandoned Oil Well Services

Starting in the 3rd quarter of 2021 Terra-Petra saw a significant uptick in oil well abandonment projects that we are being asked to bid on. There are multiple steps involved with abandoning an oil well (orphaned or not). Initially we engage the California Department of Conservation, Geologic Energy Management Division (CalGEM) to start the Construction Site Well Review (CSWR) application process.

The CSWR is used to assist local permitting agencies in identifying and reviewing the status of wells that are located near or beneath structures. Simultaneously Terra-Petra’s Petroleum Engineering team starts the well abandonment permit process by reviewing the historic well files and preparing the permit package for submittal to CalGEM for review and approval. This process can take anywhere from 3 to 5 months. Once we have permits in hand, we can move into the physical abandonment process. Terra-Petra may spend between 2-5 weeks abandoning a single oil well with one of many abandonment rigs.

Later this year (2nd quarter 2022) we are looking to abandon wells in Redondo Beach and multiple sites in Torrance (pending permit issuance). We are currently consulting on oil well related matters for more than two dozen developments having an oil well on the property.

LEARN MORE ABOUT OUR OIL WELL ABANDONMENT SERVICES

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