Recently, environmental groups have called for the removal of Louisiana’s oil and gas industry from its participation on the Oilfield Site Restoration Commission (OSR), the body that oversees the Department of Natural Resources' Orphan Well Program. They claim that an industry presence on OSR represents a conflict of interest, and that oil and gas companies use their status on the board to subvert regulation to avoid responsibility for well cleanup.
I have served as a representative on behalf of the Louisiana Oil & Gas Association (LOGA) in the OSR since 2012. Many of the claims presented by the environmental groups are false or misleading, and I would like to set the record straight.
The Orphan Well Program is run by DNR’s Office of Conservation but is funded by a special, dedicated fee on oil and gas production. The fund also benefits from a fee charged to operators of certain non-producing wells. Overall, the Orphan Well Fund takes in around $10 to $12 million per year, at least 90 percent of that paid directly by LOGA member companies.
The OSR meets quarterly to provide oversight of the Orphan Well Program. Membership is comprised of the Secretary of Natural Resources, the Commissioner of Conservation, plus eight appointed members representing industry, environmental, and landowner interests. The 1993 law that created the OSR limits the role of appointed Commission members to approving vendors, reviewing program performance, and setting general guidelines for well-plugging.
As a producer representative, I’ve tried to ensure that the Orphan Well Fund dollars are used effectively, consistent with the goals of the program. I would like to think my perspective as an oil and gas engineer and manager is valuable in this regard. Is there a responsible party who should be paying to plug this well instead of the Orphan Well Fund? Is that vendor making sufficient progress on his bid package? Why is that rig worker not wearing a hard hat? If you check the meeting transcripts, you will find these sorts of questions being asked by industry representatives.
Does Louisiana need to do a better job with orphan wells? Without a doubt. The oil and gas industry of the 2020s bears little resemblance to that of the 1990s, and the state's effort to address orphan wells should adapt from the original concept. As a state-run initiative, though, the Orphan Well Program is subject to constraints that make change difficult, if not impossible.
In 2020, the Louisiana legislature passed Act 62, establishing CLEER, the Commission for Louisiana's Energy, Environment, and Restoration. CLEER is charged, in part, with making recommendations that will “cause remediation of historical environmental problems”. I am hopeful that CLEER represents a path forward for the industry and state officials to deal more effectively with orphan wells and site remediation. I look forward to taking part in this apparatus and sharing my recommendations with them.
Orphan wells present a significant challenge, one that we need to solve for all Louisiana citizens. Solutions will involve creative and collaborative thinking on the part of the industry’s operations experts, engineers, and managers. Disregarding their input would inevitability make the problem worse by shutting out individuals with first-hand knowledge of oil and gas operations on the ground.
