Share
Environment

# Louisiana Audit Finds Number of Orphaned Wells Increased by 50%, Could Cost State Millions

## The Louisiana agency overseeing oil and gas drilling has seen a 50% increase in orphaned wells the state must pay to plug because they’ve been abandoned by their operators, according to a new audit by the Louisiana Legislative Auditor’s Office.

The Louisiana agency overseeing oil and gas drilling has seen a 50% increase in orphaned wells the state must pay to plug because they’ve been abandoned by their operators, according to a new audit by the Louisiana Legislative Auditor’s Office.

The audit also said the Department of Natural Resources Office of Conservation also is behind in forcing operators to plug disused wells that are yet to be abandoned and has failed to conduct required reinspections of hundreds of out-of-compliance wells.

The report says the conservation office actually has made dramatic improvements since a scathing 2014 audit that warned the state’s fees were inadequate to pay for the regulation of wells in use or the cleanup of abandoned wells.

But it concluded the state remains at significant risk of having to spend millions to shut in hundreds of abandoned wells because officials have not been able to require energy firms to provide enforceable closure agreements.

In a letter to state lawmakers, Legislative Auditor Daryl Purpera warned that the conservation office’s improved regulatory practices actually resulted in a 50% increase in the number of orphan wells for which the state will be financially responsible. As of 1 January 2020, the state had 4,295 orphaned wells, which the conservation office estimates will take $128 million and nearly 20 years to plug properly. That estimate was based on an average cost of$30,000 to plug a well and the average $6.5 million each year that goes into the state’s orphan well fund from fees. However, the audit also pointed out that the estimate does not take into account costly emergency actions, such as two orphaned wells that "posed both environmental and public safety risks" that the state spent$8.8 million to plug last year.

And a dozen financial institutions that were supposed to back company financial security instruments had not paid \$5 million owed the state for well closures as of February.

The orphan well problem could become even worse because of rock-bottom oil prices, which could force more struggling firms out of business, said Patrick Courreges, a spokesman for the Department of Natural Resources.