LeResche: Federal Orphan Well Cleanup Funds Help, But Wyoming Residents Are Still Short | Columns
The Wyoming Oil & Gas Conservation Commission recently requested $25 million in federal funds to cap and remediate the approximately 1,300 orphan oil and gas wells on public and private lands. The funds are part of the bipartisan infrastructure package signed into law in November, which included US$4.7 billion to cap and clean up orphan wells nationwide.
These funds are sure to help Wyoming residents living near old and leaking oil and gas infrastructure exposing them to benzene and other harmful pollutants. And the program will provide jobs for energy workers across our state. But the funding also bails out oil and gas companies that have been forced to clean up their own messes but have shied away from that responsibility.
Wells become orphaned when companies that have drilled wells and profited from them declare bankruptcy or simply go away. Unfortunately, this has become standard operating procedure for many in our oil and gas industry. Orphan wells often leak methane and pollute water, threatening people and the environment. The people of Wyoming have long had to bear the bill of these rogue operators across the state. We have a long and ugly history of orphan wells left in our landscape. More recently, the coal bed methane boom in the Powder River Basin has left thousands of wells orphaned and millions of gallons of water irresponsibly discharged – a blight on landowners and on the properties of ranchers and farmers. . And the state inherited a handful of responsibilities for human health and the environment.
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Previous requirements that drillers must post bonds to pay for cleanup if they left orphaned wells proved insufficient to protect the state and landowners. These requirements need to be strengthened. We need to require adequate bonding for each well at the very beginning – when the first drilling permits are issued – to prevent future wells from being orphaned without funds for cleanup.
Wyoming regulators recently made great strides in improving our bonding and financial assurance standards that ensure companies clean up their operations after drilling. But our federal government has yet to follow suit. The federal government owns 40.7 million acres of mining properties (underground) in Wyoming. Nearly half of it is in private surface properties. None of those 40.7 million acres are properly bound.
Improved bonding is just one small change that needs to be made to the Federal Oil and Gas Leasing Program if Wyoming is to benefit as we should from the development of the vast inventory of Federal minerals in our state. A 2020 Taxpayers for Common Sense study showed that citizens of Wyoming have lost more than $4 billion over the past decade due to outdated federal oil and gas leasing policies. These included low royalties and rental rates, non-competitive leases, and other practices. Reformed federal rental policies would increase our state’s revenue and help fund our public services and education system when we need them most.
Last November, the Department of the Interior released a report that identified several reforms to update the federal bond system and hold oil and gas operators accountable to ensure taxpayers don’t end up footing the bill. their operations. These reforms have not been enacted, so we are still at risk of avoiding cleanup responsibilities in the future. But the injection of cash through the bipartisan infrastructure bill promises to pay in part for the industry’s past sins.
The $25 million requested by Wyoming is only the first piece of the pie. The Wyoming BLM office will have the ability to request more funds to be used on public and shared lands. Urge BLM to put taxpayer dollars to good use in Wyoming. But let’s also insist that BLM reform federal rental policy to replace the broken system that has prioritized oil and gas companies over our people, our children, our environment and our government services.
Bob LeResche led Alaska’s oil and gas leasing program as that state’s commissioner of natural resources. He has served as executive director of the Alaska Energy Authority, investment banker and CEO, and serves on the boards of the Powder River Basin Resource Council and the Western Organization of Resource Councils. With his wife Carol, he operates a ranch and organic vegetable farm near Clearmont, Wyoming.