Utah’s scourge of uncapped oil wells

Key takeaways from Tribune’s coverage of the dozens of derelict wells abandoned by a Texas company on public lands in Utah

(Brian Maffly | The Salt Lake Tribune) Utah regulators have fined Weststar Exploration Co. up to $200,000 for failing to repair this leaking gas well, one of about 100 the bankrupt Texas company in the Uinta left the pool. This well, photographed August 4, 2022, is located on federal trust land in a field known as Southman Canyon.

According to federal data, 642 oil and gas wells that have not produced for four or more years lie idle on public lands in Utah and are unconnected, while an additional 400 unproductive state and land wells are unconnected. Under state and federal regulations, operators should have shut down or reclaimed these sites, or at least had good reason to take them offline.

[Read more: Texas company acquired 100 oil and gas wells in Utah, then disappeared into bankruptcy]

The worst culprit is Texas oilman Bill Gilmore, whose bankrupt Weststar Exploration Co. is responsible for about 100 derelict wells. Tribune reporters visited several Weststar locations and other locations on federal and state lands. They recorded conditions that appeared to pose a threat to the environment and public safety, with taxpayers holding the pocket for those sites being reclaimed.

At the North Bonanza oil field, 35 miles south of Vernal, puddles of hardened crude oil lie next to corroded storage tanks, the ground around rusting pump jacks is stained black, weeds grow on equipment, the contents of unsecured sheds spill from vandalized doors, rodents inhabit valve boxes. And most ominous is the hissing sound of methane and other gases escaping from cracks in wellheads.

The Big Picture • Despite Gilmore’s previous bankruptcy and non-compliance record, the Bureau of Land Management and the Utah School and Institutional Trust Lands Administration, better known as SITLA, had allowed Weststar to acquire 90,000 acres of oil and gas leases in Utah, according to filings with the bankruptcy court emerges . He was able to get the leases and their wells after posting minimal sureties, barely enough to cover the cost of plugging a single well, let alone £100.

While Gilmore ignored the Tribune’s numerous requests for comment, he testified in the bankruptcy filing that land managers, state regulators and Uintah County’s apathetic workforce were the real causes of problems at his wells.

The problem of “orphaned” wells spans all of the country’s oil and gas-producing regions, but it appears to be particularly acute on the public lands of the West, where the BLM is embarking on a program to plug obsolete, non-producing wells and funds from the bipartisan Infrastructure taps Law, which committed $560 million to plug some of the country’s 10,000 derelict wells.

what is done • That program plugged and rehabilitated 11 wells on public land in Summit, Emery and Grand counties this year at a cost of $1.2 million, according to the BLM.

The federal agency and the Utah Division of Oil, Gas and Mining (DOGM), which regulate wells on state and private land, have acknowledged the magnitude of Weststar’s outage and say they are taking steps to reduce the likelihood of similar problems reoccurring to decrease.

To that end, BLM is increasingly demanding full liability from operators with patchy track records and urging them to “plug or produce” when sitting on idle wells.

Meanwhile, state officials dropped the hammer on Weststar, terminating its SITLA leases, taking control of its 46 wells, revoking its license to operate in Utah, and fined it up to $400,000 for continuing leaks from two wells imposed.

https://www.sltrib.com/news/environment/2022/12/24/utahs-scourge-unplugged-oil/ Utah’s scourge of uncapped oil wells

Justin Scacco

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