Oil and gas operators need more insurance, or bonding. That’s what the leaders of several state agencies told the legislature’s Minerals Committee at a meeting today. They said there’s a gap in how much money is available and how much is needed to deal with abandoned oil and gas wells. The question is: where will that money come from?
Oil and Gas Commission Supervisor, Grant Black, says the bonding structure can be changed to avoid similar problems in the future.
“We’ve spent a tremendous amount of money plugging orphaned wells that have cost far beyond the bonding amounts,” Black said. “So it is about bonding, and increasing that, it’s about identifying the wells. Quite candidly I don’t personally believe that the Commission has paid as much attention to this as they should have.”
Black also said that the Commission should consider raising the conservation tax on operators, which helps fund reclamation efforts.
Director of the Office of State Lands and Investments, Ryan Lance, added that his office is taking a stricter approach with wells on state lands. His office is bonding idle wells aggressively, discontinuing the leases of bad actors, and pursuing all parties on a lease, from the original lessee to the current operator of a well.