coal bed methane

NETL/DOE

A deeply in-debt company that wanted to revive the coal bed methane industry in Wyoming had its wells seized by the state Tuesday after failing to post an overdue reclamation bond. The seizure follows years of back and forth with High Plains Gas. Wells that aren’t producing need to be bonded, in order to cover the cost of reclamation and High Plains owed almost $7 million.

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.

NETL/DOE

The state has started plugging some of the thousand-plus orphaned wells in the Powder River Basin. The wells are relics of the coal-bed methane bust, when many companies went bankrupt and walked away without closing their wells. The state has taken on responsibility for plugging them, using a combination of revoked bonds and funds from a production tax.

Oil and Gas Supervisor Mark Watson says they had hoped to start plugging wells a little bit sooner, but that there were scheduling conflicts to take into account.

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.