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https://www.kvpr.org/post/dormant-risky-new-state-law-aims-prevent-problems-idle-oil-and-gas-wells

Idle Wells are a Major Risk

Designating a well as “idle” is a temporary solution for operators, but comes at a great economic and environmental cost to Californians 

Idle wells are oil and gas wells which are not in use for production, injection, or other purposes, but also have not been permanently sealed. During a well’s productive phase, it is pumping and producing oil and/or natural gas which profit its operators, such as Exxon, Shell, or California Resources Corporation. When the formations of underground oil pools have been drained, production of oil and gas decreases. Certain techniques such as hydraulic fracturing may be used to stimulate additional production, but at some point operators decide a well is no longer economically sound to produce oil or gas. Operators are supposed to retire the wells by filling the well-bores with cement to permanently seal the well, a process called “plugging.”

A second, impermanent option is for operators to forego plugging the well to a later date and designate the well as idle. Instead of plugging a well, operators cap the well. Capping a well is much cheaper than plugging a well and wells can be capped and left “idle” for indefinite amounts of time.

Well plugging

Unplugged wells can leak explosive gases into neighborhoods and leach toxic fluids into drinking waters. Plugging a well helps protect groundwater and air quality, and prevents greenhouse gasses from escaping and expediting climate change. Therefore it’s important that idle wells are plugged.

While plugging a well does not entirely eliminate all risk of groundwater contamination or leaking greenhouse gases, (read more on FracTracker’s coverage of plugged wells) it does reduce these risks. The longer wells are left idle, the higher the risk of well casing failure. Over half of California’s idle wells have been idle for more than 10 years, and about 4,700 have been idle for over 25 years. A report by the U.S. EPA noted that California does not provide the necessary regulatory oversite of idle wells to protect California’s underground sources of drinking water.

Wells are left idle for two main reasons: either the cost of plugging is prohibitive, or there may be potential for future extraction when oil and gas prices will fetch a higher profit margin.  While idle wells are touted by industry as assets, they are in fact liabilities. Idle wells are often dumped to smaller or questionable operators.

Orphaned wells

Wells that have passed their production phase can also be “orphaned.” In some cases, it is possible that the owner and operator may be dead! Or, as often happens, the smaller operators go out of business with no money left over to plug their wells or resume pumping. When idle wells are orphaned from their operators, the state becomes responsible for the proper plugging and abandonment.

The cost to plug a well can be prohibitively high for small operators. If the operators (who profited from the well) don’t plug it, the costs are externalized to states, and therefore, the public. For example, the state of California plugged two wells in the Echo Park neighborhood of Los Angeles at a cost of over $1 million. The costs are much higher in urban areas than, say, the farmland and oilfields of the Central Valley.

Since 1977, California has permanently sealed about 1,400 orphan wells at a cost of $29.5 million, according to reports by the Division of Oil, Gas, and Geothermal Resources (DOGGR). That’s an average cost of about $21,000 per well, not accounting for inflation. From 2002-2018, DOGGR plugged about 600 wells at a cost of $18.6 million; an average cost of about $31,000.

Where are they?

Map of California’s Idle Wells


View map fullscreen | How FracTracker maps work

The map above shows the locations of idle wells in California.  There are 29,515 wells listed as idle and 122,467 plugged or buried wells as of the most recent DOGGR data, downloaded 3/20/19. There are a total of 245,116 oil and gas wells in the state, including active, idle, new (permitted) or plugged.

Of the over 29,000 wells are listed as idle, only 3,088 (10.4%) reported production in 2018. Operators recovered 338,201 barrels of oil and 178,871 cubic feet of gas from them in 2018. Operators injected 1,550,436,085 gallons of water/steam into idle injection wells in 2018, and 137,908,884 cubic feet of gas.

The tables below (Tables 1-3) provide the rankings for idle well counts by operator, oil field, and county (respectively).  Chevron, Aera, Shell, and California Resources Corporation have the most idle wells. The majority of the Chevron idle wells are located in the Midway Sunset Field. Well over half of all idle wells are located in Kern County.

Table 1. Idle Well Counts by Operator
Operator Name Idle Well Count
1 Chevron U.S.A. Inc. 6,292
2 Aera Energy LLC 5,811
3 California Resources Production Corporation 3,708
4 California Resources Elk Hills, LLC 2,016
5 Berry Petroleum Company, LLC 1,129
6 E & B Natural Resources Management Corporation 991
7 Sentinel Peak Resources California LLC 842
8 HVI Cat Canyon, Inc. 534
9 Seneca Resources Company, LLC 349
10 Crimson Resource Management Corp. 333

 

Table 2. Idle Well Counts by Oil Field
Oil Field Count by Field
1 Midway-Sunset 5,333
2 Unspecified 2,385
3 Kern River 2,217
4 Belridge, South 2,075
5 Coalinga 1,729
6 Elk Hills 958
7 Buena Vista 887
8 Lost Hills 731
9 Cymric 721
10 Cat Canyon 661

 

Table 3. Idle Well Counts by County
County Count by County
1 Kern 17,276
2 Los Angeles 3,217
3 Fresno 2,296
4 Ventura 2,022
5 Santa Barbara 1,336
6 Orange 752
7 Monterey 399
8 Kings 212
9 San Luis Obispo 202
10 Sutter 191

 

Risks

According to the Western States Petroleum Association (WSPA) the count of idle wells in California has increased from just over 20,000 idle wells in 2015 to nearly 30,000 wells in 2018! That’s an increase of nearly 50% in just 3 years!

Nobody knows how many orphaned wells are actually out there, beneath homes, in forests, or in the fields of farmers. The U.S. EPA estimates that there are more than 1 million of them across the country, most of them undocumented. In California, DOGGR officially reports that there are 885 orphaned wells in the state.

A U.S. EPA report on idle wells published in 2011 warned that existing monitoring requirements of idle wells in California was “not consistent with adequate protection” of underground sources of drinking water. Idle wells may have leaks and damage that go unnoticed for years, according to an assessment by the state Department of Conservation (DOC). The California Council on Science and Technology is actively researching this and many other issues associated with idle and orphaned wells. The published report will include policy recommendations considering the determined risks. The report will determine the following:

  • State liability for the plugging and abandoning of deserted and orphaned wells and decommissioning facilities attendant to such wells
  • Assessment of costs associated with plugging and abandoning deserted and orphaned wells and decommissioning facilities attendant to such wells
  • Exploration of mechanisms to ameliorate plugging, abandoning, and decommissioning burdens on the state, including examples from other regions and questions for policy makers to consider based on state policies

Current regulation

As of 2018, new CA legislation is in effect to incentivize operators to properly plug and abandon their stocks of idle wells. In California, idle wells are defined as wells that have not had a 6-month continuous period of production over a 2-year period (previously a 5-year period). The new regulations require operators to pay idle well fees.  The fees also contribute towards the plugging and proper abandonment of California’s existing stock of orphaned wells. The new fees are meant to act as bonds to cover the cost of plugging wells, but the fees are far too low:

  • $150 for each well that has been idle for 3 years or longer, but less than 8 years
  • $300 for each well that has been idle for 8 years or longer, but less than 15 years
  • $750 for each well that has been idle for 15 years or longer, but less than 20 years
  • $1,500 for each well that has been idle for 20 years or longer

Operators are also allowed to forego idle well fees if they institute long-term idle well management and elimination plans. These management plans require operators to plug a certain number of idle wells each year.

In February 2019, State Assembly member Chris Holden introduced an idle oil well emissions reporting bill. Assembly bill 1328 requires operators to monitor idle and abandoned wells for leaks. Operators are also required to report hydrocarbon emission leaks discovered during the well plugging process. The collected results will then be reported publicly by the CA Department of Conservation. According to Holden, “Assembly Bill 1328 will help solve a critical knowledge gap associated with aging oil and gas infrastructure in California.”

While the majority of idle wells are located in Kern County, many are also located in California’s South Coast region. Due to the long history and high density of wells in the Los Angeles, the city has additional regulations. City rules indicate that oil wells left idle for over one year must be shut down or reactivated within a month after the city fire chief tells them to do so.

Who is responsible?

All of California’s wells, from Kern County to three miles offshore, on private and public lands, are managed by DOGGR, a division of the state’s Department of Conservation. Responsibilities include establishing and enforcing the requirements and procedures for permitting wells, managing drilling and production, and at the end of a well’s lifecycle, plugging and “abandoning” it.

To help ensure operator liability for the entire lifetime of a well, bonds or well fees are required in most states. In 2018, California updated the bonding requirements for newly permitted oil and gas wells. These fees are in addition to the aforementioned idle well fees. Operators have the option of paying a blanket bond or a bond amount per well. In 2018, these fees raised $4.3 million.

Individual well fees:

  • Wells less than 10,000 feet deep: $10,000
  • Wells more than 10,000 feet deep: $25,000

Blanket fees:

  • Less than 50 wells: $200,000
  • 50 to 500 wells: $400,000
  • 500 to 10,000 wells: $2,000,000
  • Over 10,000 wells: $3,000,000

With an average cost of at least $31,000 to plug a well, California’s new bonding requirements are still insufficient. Neither the updated individual nor blanket fees provide even half the cost required to plug a typical well.

Conclusions

Strategies for the managed decline of the fossil fuel industry are necessary to make the proposal a reality. Requiring the industry operators to shut down, plug and properly abandon wells is a step in the right direction, but California’s new bonding and idle well fees are far too low to cover the cost of orphan wells or to encourage the plugging of idle wells. Additionally, it must be stated that even properly abandoned wells have a legacy of causing groundwater contamination and leaking greenhouse gases such as methane and other toxic VOCs into the atmosphere.

By Kyle Ferrar, Western Program Coordinator, FracTracker Alliance

Cover photo: Kerry Klein, Valley Public Radio

Photo by Pat Sullivan/AP https://www.houstonchronicle.com/news/houston-texas/houston/article/Fracking-research-hits-roadblock-with-Texas-law-6812820.php

California regulators need to protect groundwater from oil and gas waste this time around

By Kyle Ferrar, Western Program Coordinator, FracTracker Alliance

California’s 2nd Largest Waste Stream

Every year the oil and gas industry in California generates billions of gallons of wastewater, also known as produced water. According to a study by the California Council on Science and Technology, in 2013, more than 3 billion barrels of produced water were extracted along with some 0.2 billion barrels of oil across the state. This wastewater is usually contaminated with a mixture of heavy metals, hydrocarbons, naturally occurring radioactive materials, and high levels of salts. Yet, contaminated wastewater from oil-field operations is exempt from the hazardous waste regulations enforced by the Resource Conservation and Recovery Act (RCRA).

Operators are, therefore, not required to measure or report the chemistry of this wastewater. Even with these unknowns, it is legally re-injected back into groundwater aquifers for disposal. Once an aquifer is contaminated it can be extremely difficult, if not impossible, to clean up again. Particularly in California, where water resources are already stretched thin, underground injection of oil and gas wastewater is a major environmental and economic concern.

Regulatory Deficiency

Under the Underground Injection Control program, wastewater is supposed to be injected only into geologic formations that don’t contain usable groundwater. However, a loophole in the Safe Drinking Water Act allows oil and gas companies to apply for what’s called an aquifer exemption, which allows them to inject wastewater into aquifers that potentially hold high-quality drinking water. To learn more about aquifer exemptions, see FracTracker’s summary, here.

The California department responsible for managing these aquifer exemption permits – the Division of Oil, Gas, and Geothermal Resources (DOGGR) – has for decades failed in its regulatory capacity. In 2015, for example, DOGGR admitted that at least 2,553 wells had been permitted to inject oil and gas waste into non-exempt aquifers – aquifers that could be used for drinking water. Independent audits of DOGGR showed decades of poor record-keeping, lax oversight, and in some cases, outright defiance of the law – showing the cozy relationship between regulators and the oil and gas industry. While 176 wells (those that were injecting into the cleanest drinking water) were initially shut down, most of the rest of the 2,377 permits were allowed to continue injecting into disputed wells through the following two years of the regulatory process.

The injection wells targeted by the Environmental Protection Agency (EPA), including those that were shut down, are shown in the map below (Figure 1).

Figure 1. Map of EPA-targeted Class II Injection Wells


View map fullscreen | How FracTracker maps work | Map Data (CSV): Aquifer Exemptions, Class II Wells

The timeline of all this is just as concerning. The State of California has known about these problems since 2011, when the EPA audited California’s underground injection program and identified substantial deficiencies in its program, including failure to protect some potential underground sources of drinking water, a one-size-fits-all geologic review, and inadequate and under-qualified staffing for carrying out inspections. In 2014, the Governor’s office requested that the California EPA perform an independent review of the program. EPA subsequently made a specific remediation plan and timeline for DOGGR, and in March of 2015 the State finalized a Corrective Action Plan, to be completed by February 2017.

Scientific Review of CA Oil and Gas Activities

Meanwhile, in 2013, the California Senate passed SB-4, which set a framework for regulating hydraulic fracturing in California. Part of the bill required an independent scientific study to be conducted on oil and gas well stimulation, including acid well stimulation and hydraulic fracturing. The California Council on Science and Technology organized and led the study, in collaboration with the Lawrence Berkeley National Laboratories, which combined original technical data analyses and a review of relevant literature, all of which was extensively peer-reviewed. The report argues that both direct and indirect impacts of fracking must be accounted for, and that major deficiencies and inconsistencies in data remained which made research difficult. They also recommended that DOGGR improve and modernize their record keeping to be more transparent.

Figure 2. Depths of groundwater total dissolved solids (a common measure of groundwater quality) in five oil fields in the Los Angeles Basin. Blue and aqua colors represent protected groundwater; the heavy black horizontal line indicates the shallowest hydraulically fractured well in each field. In three of the five wells (Inglewood, Whittier, and Wilmington), fracking and wastewater injection takes place directly adjacent to, or within, protected groundwater.

Figure 2*. Depths of groundwater total dissolved solids (a common measure of groundwater quality) in five oil fields in the Los Angeles Basin. Blue and aqua colors represent protected groundwater; the heavy black horizontal line indicates the shallowest hydraulically fractured well in each field. In three of the five wells (Inglewood, Whittier, and Wilmington), fracking and wastewater injection takes place directly adjacent to, or within, protected groundwater.

A major component of the SB-4 report covered California’s Class II injection program. Researchers analyzed the depths of groundwater aquifers protected by the Safe Drinking Water Act, and found that injection and hydraulic fracturing activity was occurring within the same or neighboring geological zones as protected drinking water (Figure 2*).

*Reproduced from California Council on Science and Technology: An Independent Scientific Assessment of Well Stimulation in California Vol. 3.

More Exemptions to be Granted

Now, EPA is re-granting exemptions again. Six aquifer exemptions have been granted, and more are on the docket to be considered. In this second time around, it is imperative that regulatory agencies be more diligent in their oversight of this permitting process to protect groundwater resources. At the same time, the 2015 California bill SB 83 mandates the appointment of an independent review panel to evaluate the Underground Injection Control Program and to make recommendations on how to improve the effectiveness of the program. This process is currently in the works and a panel has been assembled, and FracTracker Alliance will be working to provide data, maps and analyses for this panel.

Stay tuned for more to come on which aquifers are being exempted, why, and what steps are being taken to protect groundwater in California.


Feature image by Pat Sullivan/AP

http://www.bakersfield.com/news/arvin-looks-to-impose-more-regulations-on-oil-gas-operators/article_2beb26d6-cbdc-11e7-ba1a-4b0ac35a0fa8.html

Arvin, CA – a City in the Most Drilled County in the Country – files for a Setback Ordinance

The City of Arvin, with a population of about 20,000, is located in Kern County, California just 15 miles southeast of Bakersfield. Nicknamed ‘The Garden in the Sun,’ Arvin is moving forward with establishing new regulations that would limit oil and gas development within the city limits.

Setback Map

The new ordinance proposes setback distances for sensitive sites including hospitals and schools, as well as residentially and commercially zoned parcels. The proposal establishes a 300-foot buffer for new development and 600’ for new operations.

In the map below, FracTracker Alliance has mapped out the zoning districts in Arvin and mapped the reach of the buffers around those districts. The areas where oil and gas well permits will be blocked by the ordinance are shown in green, labeled “Buffered Protected Zones.” The “Unprotected Zones” will still allow oil and gas permits for new development.

There are currently 13 producing oil and gas wells within the city limits of Arvin, 11 of them are located in the protected zones. Those within the protected zones are operated by Sun Mountain Oil and Gas and Petro Capital Resources. They were all drilled prior to 1980, and are shown in the map below.

Map 1. Arvin, CA Proposed setback ordinance

View map fullscreen | How FracTracker maps work

Information on the public hearings and proposals can be found in the Arvin city website, where the city posts public notices. As of January 24, 2018, these are the current documents related to the proposed ordinance that you will find on the webpage:

Earlier Proposals in Arvin

The proposed 2017 setback ordinance is in response to a previously proposed 2016 ordinance that would allow Kern County to fast track permits for oil and gas activities without environmental review or any public notice for the next 20 years. This could mean 72,000 new wells without review, in an area that already possesses the worst air quality in the country. Communities of color would of course be disproportionately impacted by such policy. In Kern County, the large percentage of Latinx residents suffer the impacts of oil drilling and fracking operations near their homes schools and public spaces.

In December of 2016, Committee for a Better Arvin, Committee for a Better Shafter, and Greenfield Walking Group, represented by Center for Race, Poverty and the Environment, sued Kern County. The lawsuit was filed in coordination with EarthJustice, Sierra Club, Natural Resources Defense Council, and the Center for Biological Diversity.

The Importance of Local Rule

Self-determination by local rule is fundamental of United States democracy, but is often derailed by corporate industry interests by the way of state pre-emption. There is a general understanding that local governments are able to institute policies that protect the interests of their constituents, as long as they do not conflict with the laws of the state or federal government. Typically, local municipalities are able to pass laws that are more constrictive than regional, state, and the federal government.

Unfortunately, when it comes to environmental health regulations, states commonly institute policies that preserve the rights of extractive industries to access mineral resources. In such cases, the state law “pre-empts” the ability of local municipalities to regulate. Local laws can be considered the mandate of the people, rather than the influence of outside interest on representatives. Therefore, when it comes to land use and issues of environmental health, local self-determination must be preserved so that communities are empowered in their decision making to best protect the health of their citizens.

For more on local policies that regulate oil and gas operations in California, see FracTracker’s pieces, Local Actions in California, as well as What Does Los Angeles Mean for Local Bans?


By Kyle Ferrar, Western Program Coordinator, FracTracker Alliance

Feature image by: Henry A. Barrios / The Californian