Abandoned oil well plugging to begin mid-July
AMY R. SISK Jun 19, 2020 bismarcktribune.com
Work is slated to begin July 16 to plug the first of North Dakota’s abandoned oil wells under a new program approved by regulators Friday that's considered a potential model for other states.
The state plans to use $66 million in federal coronavirus aid to plug and clean up at least 239 abandoned wells and other oilfield sites. Regulators expect to return 2,200 acres to agricultural use, primarily in the older northern oilfields of Bottineau, Renville and Ward counties, but also in western North Dakota.
“Our goal by the end of the year is to have topsoil on every one of these sites, either ready for crops to be seeded in spring or native grasses already seeded and ready for the fall rains,” State Mineral Resources Director Lynn Helms told the Industrial Commission Friday. “It’s going to be an enormous process.”
The three-member commission, chaired by Gov. Doug Burgum, approved a number of orders Friday to plug the sites, which are operated by 50 oilfield companies. The commission also authorized grant money for a carbon capture and storage project at Blue Flint Ethanol in McLean County.
Other oil-rich states, meanwhile, are eyeing North Dakota’s abandoned well program. Helms said a bill is in the works to disperse $1.8 billion in federal dollars to states to plug old, nonproducing wells whose owners have shirked their cleanup responsibilities. The Canadian government, meanwhile, is funneling $1.7 billion to three provinces for similar work.
Attorney General Wayne Stenehjem said he already fielded a call from Oklahoma’s attorney general, who was curious about North Dakota’s efforts.
“I told him I would tell him all about it as long as he didn’t try to steal any of our employees from up here,” Stenehjem said with a laugh.
Between the plugging and reclamation portions of the program, North Dakota officials hope to keep about 1,000 oilfield workers employed full time for six months, Helms said, adding that about 9,500 workers in the oil and gas sector have filed for unemployment this spring. More job losses are expected in the weeks ahead as dollars run out from the federal Paycheck Protection Program, an effort to keep workers on the payroll amid the pandemic.
The state will start accepting bids for the work on Monday and plans to require significant documentation to show to any federal auditors looking into how coronavirus relief aid was used by the states. More wells could be added to the program down the road. One final approval is needed from state lawmakers, who next week will decide whether to approve spending more than $400 million in federal coronavirus aid. Included in that amount is $33 million for the cleanup work once the wells have been plugged.
Should federal aid for the coronavirus be used to plug "orphan wells"? It's not just North Dakota tax payers footing that bill, it's all US tax payers. I find it more than a little disturbing that other states are interested in doing the same. Soon we may all be paying to plug and abandon wells that are the proper responsibility of the industry.
I can't imagine how this fits in with the relief bills, other than it will create some local jobs.
I suspect we would all be upset if we knew how all of the states are spending those TRILLIONS OF DOLLARS from those relief bills.
I'm all for creating jobs as part of an orphan well plugging and abandoning program but the proper funding for that needs to come from the industry in the form of fees and penalties. Eventually we may find out where all the COVID relief funds went and I predict we will not be happy with the findings. And to think some thought that DC was a swamp before this administration. If other states follow the lead of ND, the general public should be up in arms over the corruption.
From 2008-2018, the state of North Dakota collected $18 billion dollars from oil production taxes. To my understanding, they collected a little over a 10% rate from oil revenues.
That would put oil companies making around $180 billion dollars during that time period. (Profit?) I think they should be responsible for any clean-up cost.