California oil and natural gas regulators want to firm up what they consider to be weak requirements for idle wells and are supporting proposed legislation to get the job done.
The Department of Conservation's (DOC) Division of Oil, Gas and Geothermal Resources (DOGGR) made a pitch for the Assembly bill 2729 in announcing late Monday that it has directed an offshore well operator in Ventura County to take corrective actions by June 1 on a number of wells and related equipment.
In two orders, privately held Rincon Island LP (RILP) was ordered to "remediate, repair or replace" some oil wells and other infrastructure on a man-made drilling island, along with conducting tests and inspections on a nearby long-term idle well on the ocean floor offshore Southern California.
DOGGR inspectors in February were onsite at Rincon Island, initially developed by Atlantic Richfield and formerly operated by Berry Petroleum, where they found "numerous" violations related to the condition of valves, pipes and infrastructure that was "severely corroded and in an unsafe state of disrepair and dysfunction.” The first order impacted more than 75 wells, a spokesperson said.
DOGGR head and Oil/Gas Supervisor Ken Harris said the number of long-term idle wells at the marine environment site "is of great concern" to state regulators. "The operator has failed to maintain the facility to regulatory standards."
Harris said it was obvious that "those standards and their application need strengthening,” which is why DOGGR is supporting legislation to ensure idle wells "are properly plugged.”
Separately, DOGGR is moving ahead with regulatory proceedings to enhance the oversight and safety requirements in oil/gas fields statewide, Harris said.
DOC notified authorities, including the California State Lands Commission, which controls offshore oil leases within the three-mile state coastal zone, about the Rincon Island violations. Operators' current ability to maintain an idle well almost indefinitely is likely to change, as AB 2729 is aimed at closing regulatory loopholes and "increasing industry accountability for idle wells,” the DOGGR spokesperson said.
Sponsored by state Rep. Tony Thurmond (D-Richmond) and Das Williams (D-Santa Barbara), the legislation would limit the definition now in effect for "active observation wells," and expand the definitions of "idle well" and "long-term idle well" by no longer excluding active observation wells. For example, the legislation would:
Provide for additional funds to ensure idle wells are properly maintained;
Increase steps to plug and decommission related production facilities or the well, or both, if determined necessary;
Allow for wells to be re-abandoned if they were found to have been insufficiently abandoned; and
By Jan. 1, 2018, increase the amounts of required individual and blanket indemnity bonds; DOGGR would be required by June 1, 2018 to review, evaluate and update as appropriate idle well regulations.
RILP has a $250,000 bond covering all of the wells on file with the state, as well as a separate $5 million bond with State Lands. "However, if permanently plugging all the wells at the facility and cleaning up the attendant infrastructure becomes necessary, the cost may exceed the bond funding," the DOGGR spokesperson said.