abandoned wells

A federal agency says elevated levels of carbon dioxide and benzene at the Midwest School are an “urgent public health hazard.”

Stephanie Joyce

The Legislature's Joint Minerals Committee will consider a proposal at its meeting this week to create a state-backed insurance pool that small oil and gas operators could tap into for their cleanup obligations.

Mysterious Gas Leak In A Town Surrounded By Wells

Jun 14, 2016
Leigh Paterson

The search is continuing for the source of a gas leak that shut down a school in Midwest, Wyoming at the end of May.

Fleur de Lis, the company that operates the neighboring Salt Creek oil field, says it has plugged one leaking well near the school, worked on another six and is continuing to monitor as many as 30 other wells in the area. 

The Salt Creek field is the oldest in Wyoming, and an Inside Energy analysis of the state oil and gas database shows there are more than 700 active and abandoned wells in a one-mile radius around the Midwest school.

Stephanie Joyce

It came as news to Jeff Parsek that state records show there is an abandoned oil and gas well in his driveway. Parsek lives in a large, brown ranch house, right across the street from an elementary school, in a subdivision on the south side of Fort Collins, Colorado. It’s a nice neighborhood, with the new feeling of many Colorado suburbs.

When Parsek bought the house in 2004, he didn’t ask about oil and gas wells on the property.

Stephanie Joyce / Wyoming Public Radio

As the list of orphaned wells in Wyoming continues to grow, state regulators are looking to strengthen oil and gas bonding requirements.

Oil and gas companies are required to post bonds before they begin drilling, in order to ensure compliance with regulations during drilling and cleanup. But current bonding requirements have been criticized for failing to discourage abandonment, and for not being sufficient to cover the costs of plugging orphaned wells.

The struggling coal bed methane company High Plains Gas says it will pay $7 million in overdue well bonding to the State of Wyoming. The company owns more than 3,000 wells in the Powder River Basin that the state had said it would take over and plug if the bond wasn't posted by yesterday. While the bond wasn't posted yesterday, an extension has been provided for the company.

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.

According to new estimates from the Governor’s office, plugging abandoned oil and gas wells in Wyoming could cost anywhere from $8 to $32 million.

The smaller figure takes into account only wells that the state knows are abandoned. The larger one includes wells owned by bankrupt methane farming company Luca Technologies and the 2300 wells the state considers ‘at risk’ for abandonment.

That number of 'at risk' wells is twice previous estimates. The Governor's policy director, Shawn Reese, says the discrepancy can be traced back to the Oil and Gas Conservation Commission.

Bankrupt methane farming company Luca Technologies is planning to walk away from its wells on federal lands in Wyoming without plugging them. The company and its subsidiaries have between four and five hundred wells on federal lands, and COO Brian Cree says it's unlikely there will be enough money to clean them up.

“Those wells will just be turned back over to the federal government, and the federal government will be in a position to use their resources to plug and abandon those wells," Cree says.