Environmental concerns cause Wyoming to plug 316 producing oil wells

A heated discussion over what to do with 316 producing wells took place last week in Wyoming. The Wyoming Oil and Gas Conservation Commission decided Tuesday to plug the wells, which once belonged to BW Oil LLC, and forfeit a $168,000 bond on the field, reports Casper Star Tribune. The company violated a July 2014 order to clean up oil spills and fix inadequately cased wells.

In 2015, the field produced $159,000 worth of oil, but cost $196,000 to operate, according to a third party which manages the field.

“I think the last thing we want is to plug producing wells, (but) putting more oil into these facilities that would not be my highest priority,” said Commissioner Tom Drean, due to the poor condition of the field.

BW Oil was facing fines of $25,000, and a loss of its well bond, if it failed to comply with the 2014 order. Questions were raised Tuesday if the fines should be raised further. They could potentially reach as high as $2 million.

Assistant Attorney General Eric Easton saw little reason to pursue higher fines, as BW Oil has no money with which to pay.

“That would suggest that we shouldn’t have fines,” Governor Matt Mead commented.

Wyoming may plug as many as 662 coal-bed methane wells in 2016 as well

In addition to concerns over the condition of BW Oil’s assets, Wyoming Oil and Gas Conservation Commission also plans to begin plugging some 3,000 wells once owned by now-defunct Patriot Energy, a subsidiary of High Plains Gas Inc., according to the Casper Journal.

Cost estimates have run as high as $30 million for the state to plug all of the wells. The commission was told upwards of 662 coal bed methane wells could be plugged this year, roughly doubling the amount originally planned.

An order was approved last week against Patriot and High Plains declaring its well field equipment abandoned, and forfeited to the state. It will be sold to help cover the costs associated with plugging the wells.

“I am concerned,” said Governor Mead. “We’re dealing with wells that didn’t survive when we had relatively very strong market for oil and gas, and now we have this downturn where even maybe some of your operators who are, in relative terms, pretty well capitalized, I think they’re going to be challenged—so I am worried about it.”

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