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Wyoming May Act to Plug Abandoned Wells as Natural Gas Boom Ends
New York Times ^ | 24 December 2014 | Dan Froshch

Posted on 01/04/2014 2:38:42 PM PST by Lorianne

Hundreds of abandoned drilling wells dot eastern Wyoming like sagebrush, vestiges of a natural gas boom that has been drying up in recent years as prices have plummeted.

The companies that once operated the wells have all but vanished into the prairie, many seeking bankruptcy protection and unable to pay the cost of reclaiming the land they leased. Recent estimates have put the number of abandoned drilling operations in Wyoming at more than 1,200, and state officials said several thousand more might soon be orphaned by their operators.

Wyoming officials are now trying to address the problem amid concerns from landowners that the wells could contaminate groundwater and are a blight on the land.

This month, Gov. Matt Mead proposed allocating $3 million to pay for plugging the wells and reclaiming the land around them. And the issue is expected to be debated during next year’s legislative session as lawmakers seek to hold drilling companies more accountable.

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy; Government; US: Wyoming
KEYWORDS: natgas; wyoming
Why didn't they get up front assurances (and money to back it up) that the companies would plug the wells once they were done?
1 posted on 01/04/2014 2:38:42 PM PST by Lorianne
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To: Lorianne

It’s like saying you can keep your doctor.


2 posted on 01/04/2014 2:49:31 PM PST by DIRTYSECRET (urope. Why do they put up with this.)
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To: Lorianne

I wonder if it’s legal - to buy land with an abandoned natural gas well operation on it, then build your own house on the land and restart the gas pumping, using it for energy/fuel just for your own home???


3 posted on 01/04/2014 3:06:58 PM PST by Wuli
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To: Lorianne
Why didn't they get up front assurances (and money to back it up) that the companies would plug the wells once they were done?

They did. Each operator had to post a $75000 bond per well.

If you read the whole article, it's evident that the Times is attempting to build a mountain from a molehill.

In addition to the bonding, the state has an ongoing conservation tax on the oil & gas industry for exactly this purpose. The state's Petroleum Association is cooperating and has agreed to a temporary increase.

The only problem is that so many wells were abandoned over such a short-period of time, so that it's going to take several years for the clean-up to catch up.

But the state and the Petroleum Association appear to have everything under control.

For its part, the Times is engaged in its characteristic anti-drilling propaganda.

4 posted on 01/04/2014 3:11:16 PM PST by okie01 (The Mainstream Media -- IGNORANCE ON PARADE)
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To: Lorianne

Natural gas prices have doubled since most of these wells were drilled.


5 posted on 01/04/2014 3:12:16 PM PST by wideawake
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To: Lorianne

Since 2008, the price of NG has dropped from about $12 to as low as $3.50 about 2 months ago.

However, today, NG is $4.25, and is sitting close to a 2 year high.

I’ll guess the massive cold spell on Sunday will bump that price up some more.


6 posted on 01/04/2014 3:12:29 PM PST by zeestephen
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To: Wuli

Depends on whether the minerals have been severed from the land. If the drillers just leased from the landowners,and the lease has expired, then the minerals would go with the land.

As for using gas straight out of the ground, I’d refer you to this:

http://en.wikipedia.org/wiki/New_London_School_explosion


7 posted on 01/04/2014 3:13:40 PM PST by PAR35
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To: okie01

Top notch post.


8 posted on 01/04/2014 3:15:15 PM PST by wideawake
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To: Wuli

Yep, if you own the mineral rights.


9 posted on 01/04/2014 3:22:31 PM PST by biff (WAS)
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To: PAR35

“As for using gas straight out of the ground, I’d refer you to this”

1. I am sure the standards have changed quite a bit since the 1930s. 2. Just because the house might be built on the same set of acres that the well is part of would not mean that the house would be built next to the well or the pummping operation at the wellhead. Just like residential natural gas in a city, there’d be a pipeline from the pumping station to the house, and applying the same safety standards as a commercial operation.


10 posted on 01/04/2014 3:23:52 PM PST by Wuli
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To: biff

“Yep, if you own the mineral rights.”

Good. Now I just need to win the Lotto and hire someone to locate the suitable property. /LOL

Just daydreamin today.


11 posted on 01/04/2014 3:26:17 PM PST by Wuli
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To: Wuli

You would need separators on it to take water and other impurities out and you should inject the odorant that makes it stink in case of a leak.

Problem is if you choked it down enough to just supply your house with gas it might be enough to just kill the well. Then you are sitting there looking like the village idiot.


12 posted on 01/04/2014 3:37:07 PM PST by biff (WAS)
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To: PAR35
***As for using gas straight out of the ground,***

In 1956, we lived in a natural gas co campground in NW New Mexico. The entire camp was supplied with wellhead gas by the company.

One morning, our trailer blew up with us in it, caused by a leaking underground pipe. Our mom was horribly burned but survived thanks to medical care in Farmington NM at that time.
Our lives went into a tailspin for years.

A few years ago, one of our co-workers had a sister burned to death in NE Oklahoma when wasps plugged a vent line from their water well. A spark caused by an electric motor in the well house set off a blast and killed her.
This was a buildup of natural gas from her water well. No fracking has taken place anywhere near here.

There is an oudorant placed in natural gas for a reason as well head gas has no odor.

13 posted on 01/04/2014 3:47:44 PM PST by Ruy Dias de Bivar (Sometimes you need 7+ more ammo. LOTS MORE.)
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To: okie01

Bump!


14 posted on 01/04/2014 3:56:08 PM PST by SunTzuWu
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To: biff

“Problem is if you choked it down enough to just supply your house with gas it might be enough to just kill the well.”

Let me see if I understand you.

I’m guessing.

The gas comes out at the well head because opening the underground well of gas acts like a “pressure relief” operation. If you “choke” how much (the rate at which) you want to release that pressure, to control how much gas you are getting, to a minimum, you may create a pressure issue in your pumping operation - in the line down into the well or somewhere.

Is that the kind of thing you mean??


15 posted on 01/04/2014 4:01:58 PM PST by Wuli
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To: wideawake
Y'know, it's really, really offensive that the Times has become such a blatent and shameless propagandamonger.

What's even more offensive, though, is that there are several million Americans who are so uninformed and unknowing that they don't recognize such propaganda for what it is.

Even worse, the Times' audience is disproportionately composed of graduates from our "elite universities" and are supposed to be among "Our Best and Our Brightest". Yet, they swallow twaddle like this...and ask for more.

16 posted on 01/04/2014 4:06:52 PM PST by okie01 (The Mainstream Media -- IGNORANCE ON PARADE)
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To: okie01

It doesn’t seem like there is enough in the kitty to cover the cost of plugging the wells (if you take the numbers in the article to be accurate).

Why is the taxpayer on the hook?


17 posted on 01/04/2014 4:21:39 PM PST by Lorianne (fedgov, taxporkmoney)
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To: Lorianne
Why is the taxpayer on the hook?

Read it again. The "conservation tax" is levied on and paid by the oil & gas industry.

18 posted on 01/04/2014 4:23:55 PM PST by okie01 (The Mainstream Media -- IGNORANCE ON PARADE)
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To: Wuli

Long time back I recall reading about some farmers in Oklahoma that heat their chicken houses with the gas from abandoned stripper wells on their property.


19 posted on 01/04/2014 4:43:30 PM PST by Rebelbase (Tagline: optional, printed after your name on post)
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To: Wuli

One of the biggest enemies of a gas well is produced water out of the same formation that is producing gas. The gas “rushing” to the surface carries along with it the produced water. Shut the well in and it may water up so much it will never flow again(killing it), as well, reducing the flow down to the volume you would need for your house may let enough water into the bore hole that it would gradually fill up and kill the well.

Hard and expensive to get one flowing again. Sometimes never.

So, the moral to the story is you flow a well enough not to let it water up but not so much you gut the producing formation leading to a non producer.


20 posted on 01/04/2014 4:55:03 PM PST by biff (WAS)
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To: okie01

The article states that the taxpayers will be asked to make up the difference


21 posted on 01/04/2014 5:13:06 PM PST by Lorianne (fedgov, taxporkmoney)
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To: Lorianne
The article states that the taxpayers will be asked to make up the difference

Where? I have now re-read the story three times and can find no such assertion.

However, from the article:

"The money would come from a conservation tax that oil and gas companies pay."

What are you seeing that I'm not?

22 posted on 01/04/2014 5:33:22 PM PST by okie01 (The Mainstream Media -- IGNORANCE ON PARADE)
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To: okie01
"The state’s Oil and Gas Conservation Commission already budgets $1 million a year to plug abandoned wells. And under the governor’s proposal, the commission would appropriate another $3 million over the next four years in an effort to restore property value and reduce the risk of contamination."

"Still, given the number of wells already abandoned and the concern that more will soon be deserted, the money is not expected to go far. The state estimated that closing the 1,200 wells already abandoned would cost about $8 million."

"But it is at that point that some companies drift into financial trouble and cannot pay the additional fees, leaving the state to scramble to make up the cost."

23 posted on 01/04/2014 7:04:24 PM PST by Lorianne (fedgov, taxporkmoney)
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To: Lorianne
Er, Lorianne, where does that say that the taxpayers will have to pick up the tab?

What it does say is that the Commission will need more money than usual over the next few years...the producers have already agreed to a conservation tax increase...and it infers that, if even more money is needed, the action can be stretched out over a longer period.

24 posted on 01/04/2014 7:38:41 PM PST by okie01 (The Mainstream Media -- IGNORANCE ON PARADE)
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To: okie01

It seems to me to be saying Wyoming will be paying the shortfall. (The liberal media uses euphamisms like the name of the state in lieu of saying it is the taxpayers of the State who actually pay).

Even the title of the article says “WYOMING May Act to Plug Abandoned Wells as ...

It seems to be saying the conservation fund won’t cover the whole expense, its goal is to get another 3 million, and the article states it will take 8 million to do the job.


25 posted on 01/04/2014 8:03:22 PM PST by Lorianne (fedgov, taxporkmoney)
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To: biff
Problem is if you choked it down enough to just supply your house with gas it might be enough to just kill the well. Then you are sitting there looking like the village idiot.

LOL.

26 posted on 01/04/2014 8:05:42 PM PST by James C. Bennett (An Australian.)
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To: Lorianne
Lorianne, your cynicism is showing.

This is the New York Times! It is a piece of blatent propaganda against the oil & gas industry. It is a bald attempt to scare its readers in the Marcellus Shale about the perils of hosting natural gas drilling.

If the burden was going to end up on the taxpayers -- and not the evil oil & gas companies and their cronies on the Oil & Gas Commission -- don't you think they'd come right out and flat say as much, rather than slyly infer it?

27 posted on 01/04/2014 8:25:37 PM PST by okie01 (The Mainstream Media -- IGNORANCE ON PARADE)
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To: okie01

Either the Wyoming taxpayers will end up paying for the cost or part of the cost of capping these played out wells or they won’t. I guess we’ll have to wait and see what happens.

I don’t think it’s a scare tactic. I think it is just saying to think about all the close out costs more carefully and get money up front in case (as it seems in this article) companies go bankrupt before they can finish the job.

If the article helps other States get the close-out costs paid for in advance, then it is a good thing.

In general taxpayers SHOULD be more cynical and skeptical about all kinds of business ventures (not just oil and gas) that may possibly leave them as the patsy. For example, we’re now seeing this coming up with Obamacare having built in bailouts for the insurance industry.

Yes, I’m probably cynical and see bailouts behind every tree and under every rock. But events of the last 7 years tend to make one think like that.


28 posted on 01/04/2014 9:13:24 PM PST by Lorianne (fedgov, taxporkmoney)
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To: Lorianne

“Why didn’t they get up front assurances (and money to back it up) that the companies would plug the wells once they were done?”

Nowadays it would seem that they would have to have some means of insuring they could remediate the sites (letters of credit required by the municipalities, for instance).


29 posted on 01/05/2014 4:50:18 AM PST by kearnyirish2 (Affirmative action is economic war against white males (and therefore white families).)
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To: biff

“So, the moral to the story is you flow a well enough not to let it water up but not so much you gut the producing formation leading to a non producer.”

It sounds like I’d have a hard time NOT keeping a well in some sort of “commercial level” of production, leading to either:

EVERYTHING, regulation wise, that goes along with selling part of what gets produced, and the tax-regulations not likely letting me simply divert “some” of the gas produced to my home, without a transaction of some sort passing between me as individual-resident and “my company” in charge of selling what I cannot consume;

or, I’d have to produce at some sort of “commercial level” of operation and build a personal “storage farm” (LNG???) on the property of everything produced that I did not need immediately, until the well would not produce any more and/or I could not afford/didn’t want to expand the “storage farm” anymore.

Either way, the idea of buying land that contains a natural gas well that some outfit thinks is no longer commercially viable, and keeping the well running just for a minimal flow to provide energy to my own home/ranch needs on the property, may not be a practical idea after all. Darn.


30 posted on 01/05/2014 12:06:49 PM PST by Wuli
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