Gov. Matt Mead: state needs to 'step up' effort on orphaned wells

2014-04-09T08:00:00Z Gov. Matt Mead: state needs to 'step up' effort on orphaned wellsBy BENJAMIN STORROW Casper Star-Tribune The Billings Gazette

CASPER, Wyo. — Gov. Matt Mead said Tuesday that Wyoming needs to “step up” its efforts to close wells abandoned after the bust of the coalbed methane industry, saying the state had fallen behind in its efforts to plug the wells in recent years.

Approximately 1,200 so-called orphaned wells in the Powder River Basin were left after many operators went bankrupt following a crash in natural gas prices, leaving companies unable to pay for reclaiming the land.

The cleanup was left to the state, but the Wyoming effort sputtered. The Oil and Gas Conservation Commission closed 183 wells between 2004 and 2013. In December, Mead announced a plan to plug around 300 wells in each of the next four years. Commission officials said recently that 67 wells are ready to be plugged and another 140 are going out to bid.

“I think we’re making progress. I think 300 is aggressive. As we get going, I think we can do more than that,” Mead said after the Tuesday meeting of the Wyoming Oil and Gas Conservation Commission in Casper. “Compared to where we’ve gone, the last few years we just haven’t done much. As I started looking at it, we were getting further and further behind. We got to step up, we got to catch up and then stay ahead in the future.”

During the meeting, the commission voted to remove equipment abandoned by three bankrupt CBM operators left at orphaned well sites. Most of the equipment has little financial value and will be disposed of, though officials did note that in one instance a pair of valuable generators had been left at a well site.

The subject was one of several Mead addressed after the meeting of the state Oil and Gas Conservation Commission.

Black’s exit

Tuesday was the commission’s first meeting since the abrupt resignation of former State Oil and Gas Supervisor Grant Black. Black’s resignation was never addressed during the roughly three-hour proceeding and Mead was similarly tight-lipped about the circumstances surrounding the former supervisor’s departure.

But he did outline what he wants to see from a future supervisor. The governor said the position requires a person with the technical background to understand the issues, as well as someone who can manage the commission staff while working with outside groups ranging from oil and gas companies to environmental groups.

He did not give a timeline for naming Black’s successor but said the state would begin its search promptly. In the meantime, Mead said he was confident in the commission’s ability to tackle a rule review and well-plugging program in addition to its normal duties.

“The fact of the matter is right now that the oil and gas commission staff is short-staffed. When you have someone resign that causes concerns, but we have a great staff that provides continuity,” the governor said. “We have an interim supervisor with 31 years of experience so we’re going to be fine.”

Future of Luca

Commissioners on Tuesday postponed until summer a hearing on whether to pull the bonds held by Luca Technologies Inc., a Colorado gas company in the midst of bankruptcy proceedings. Concerns have swirled around the Colorado firm and whether the 900 wells owned by its subsidiary Patriot Energy Resources will be abandoned.

A Luca representative previously told the commission Luca did not have the $1.9 million in bonds owed to the state. Companies put bonds on their wells to cover the cost of reclaiming the land in the event they run into financial trouble.

Commission officials said Tuesday Luca sold Patriot Energy to a Sheridan company, High Plains Gas. The state still needs to hold a hearing on whether or not to pull the bonds already paid by Patriot Energy, but commission attorney Eric Easton said the hearing needed to be postponed because much of the information relating to the wells in the sale had been lost.

Mead called the Patriot wells a “concern,” but expressed confidence in the state’s ability to plug abandoned fields large and small.

“Luca Patriot is big, there is a number of wells,” the governor said. “The fact is depending if it’s on your ranchland or your backyard, even if it’s just one well, you may have a concern about it. We’re going to tackle them all.”

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