Abandoned well plugging plan moves forward

Dec 16, 2013

The legislature’s Joint Minerals Committee is mostly onboard with a new plan to plug abandoned oil and gas wells in the state. The committee discussed the Governor’s plan at a meeting on Thursday. Senator Chris Rothfuss says while the committee had questions about some of the details, like the cost and timeline, there was a general agreement that the Oil and Gas Conservation Commission should move forward with the plugging.

“Even if they don’t have sufficient funds, they have the authority to amend the mill levy for the current conservation tax to raise sufficient funds, so the only role that I saw us as potentially having at the end of it was if there need to be some makeup funds in the near future,” says Rothfuss.

There are a thousand wells in the state that need plugging, at a cost of $8 million dollars. But that number could quadruple in the next few years if wells that the state considers ‘at risk’ are abandoned.

Environmental groups also praised the plan, but the Powder River Basin Resource Council’s Jill Morrison cautioned that there needs to be a plan in place for making sure the state doesn’t find itself in a similar situation again.

“When the production starts to decline, and the large companies sell out to a smaller, less capitalized company, you know, that there has to be bonding in place during that transfer, or those original operators have to be kept on the hook for that liability,” Morrison says. 

The governor’s plan calls for revising state bonding requirements to make sure that in the future, the state doesn’t end up paying to plug wells and reclaim the land. Rothfuss says the legislature will likely take up the issue in the near future.