Oilfield Site Restoration (OSR) Program
ORPHAN WELLSITE LIST
CURRENT OSR BIDS
NEWLY ORPHANED WELLS
FREQUENTLY ASKED QUESTIONS
The Louisiana Oilfield Site Restoration Program was created in 1993 within the Department of Natural Resources to address the growing problem of unrestored orphaned oilfield sites across the State. Orphan wells are abandoned oil and gas wells for which no viable responsible party can be located, or such party has failed to maintain the wellsite in accordance with State rules and regulations. The specific focus of the Oilfield Site Restoration Program is to properly plug and abandon orphan wells and to restore sites to approximate pre-wellsite conditions suitable for redevelopment.
Oilfield site restoration projects range in size and scope from the repair of small wellhead leaks and the removal of exploration and production related trash and debris to the plugging of wells and removal of associated facilities and structures. Orphan wells are found throughout the State in all areas where there has been historic oil and gas activity. These sites deteriorate over time due to neglect from the operator of record and therefore become susceptible to releasing oil, gas, and saltwater to the surrounding area. The Program has addressed sites near schools and public buildings, in sensitive coastal wetland areas, and near residential areas.
Orphan wellsites are prioritized to direct available funding to those sites that pose the greatest threat to public safety and environment. However, in order to also economically decrease the total number of orphaned wells in the State, lower priority sites located near a proposed project area are often included in the project scope of work to increase cost-effectiveness by lowering overall individual well plugging costs. Project design and oversight is handled by in-house petroleum engineering staff while all other restoration-specific tasks are contracted to approved oilfield contractors. Project bids are solicited in accordance with the State bid law and projects are awarded to the lowest qualified bidder.
Revenue for the Program is entirely generated from a fee on oil and gas production in the State of Louisiana which is paid quarterly by Louisiana oil and gas operators. These flat-rate fees are deposited to the oilfield site restoration fund (Fund) which is dedicated by statute to fund the operation of the Program. No tax-payer dollars are utilized. The fee consists of one and one-half cents ($.015) for every barrel of oil and condensate produced, and three-tenths of one cent ($.003) for every thousand cubic feet of gas produced. This currently equates to roughly $4 million dollars a year to be utilized by the Program for orphan oilfield site restoration projects.
Recovery of Restoration Costs
The operator of record for an orphan wellsite is in all cases the primary party required to restore an oilfield site once it becomes unusable. This responsibility remains whether or not a site specific trust account has been established for this purpose. Should a site be restored using monies from the Fund, and a site specific trust account has not been created for the site, former operators and their working interest owners may then also have some liability in addition to the responsible party for repayment of the monies spent from the Fund.
The process of recovery of site restoration costs of orphaned oilfield sites from the responsible party and others who may share in this liability is addressed in LSA-R.S. 30:93. The Secretary of the Department of Natural Resources is empowered by law to recover all costs incurred by the Program resulting from orphan site restoration operations. The procedures to be utilized in this matter are dependent on the specific cost of site restoration activity and whether or not a site specific trust account has been established for the site restored. For a site without a site specific trust account, the Secretary is authorized to collect only from the responsible party (i.e. the last operator of record and his working interest owners) unless the cost of the site restoration exceeds $250,000.00, at which time all former operators and working interest owners become liable for the entire restoration cost in inverse chronological order.
Site Specific Trust Account
In accordance with the provisions of the Oilfield Site Restoration Law (LSA R.S. 30:80 et seq), when a transfer of ownership interest of an oilfield site occurs, either party of the transfer can elect to file an application to establish a site specific trust account (SSTA) to cover future site restoration costs. To the extent permitted under the law, once established and fully funded, a SSTA will release from liability the Transferor and all prior responsible parties for site restoration costs for the transferred oilfield site. Thereafter, the Transferee will be considered the responsible party for the purposes of site restoration. For more information, please see the document entitled 'Establishing a Site Specific Trust Account (SSTA)' or contact Program staff.
The following forms related to SSTAs are also available:
The Oilfield Site Restoration Commission
The Program is domiciled within the Engineering Division of the Office of Conservation of the Department of Natural Resources. Program oversight is provided by an Oilfield Site Restoration Commission which consists of ten members. The Secretary of the Department of Natural Resources serves as chairman of the Commission, while the Commissioner of the Office of Conservation serves as vice-chairman. The remaining eight members of the Commission are appointed by the Governor from a list of nominees submitted by various industry and environmental groups. The Commission meets quarterly in Baton Rouge.
Oilfield Site Restoration Commission Members
- Thomas Harris, Chairman - Secretary of DNR
- Richard P. Ieyoub, Vice-Chairman - Commissioner of Conservation
- Cynthia G. Dupree - Louisiana Land Association
- Don Briggs - Louisiana Oil & Gas Association
- Steve Maley - Louisiana Oil & Gas Association
- Elizabeth "Lisa" Creasman - Nature Conservancy
- Barney Callahan - LWF, Sierra & Audubon Societies
- John T. Connolly - At Large
- Tyler Gray - Mid-Continent Oil & Gas Association
- Grant Black - Mid-Continent Oil & Gas Association
Recent OSR Activity
Monroe, Oakland, and Truxno Fields, Union Parish. This project includes the plugging of 26 wells and the removal of 3 production facilities. Pictured below is an orphan well location prior to plugging and abandonment activities, and the site after the project was completed.
Section 28 Field, St. Martin Parish. This bid project consisted of the plugging and abandonment of 30 orphan wells and the removal of 3 facilities completed April 16, 2010.
The following pictures depict a matted orphan location which allows the contractor to access the site during wet conditions and some of the equipment utilized during plugging activities.
For Prospective OSR Contractors
Only those contractors on the list of contractors approved by the Oilfield Site Restoration Commission as of the first public notice of a bid solicitation are eligible to participate in the bid solicitation process. (Reference: Louisiana Oilfield Site Restoration Law, R.S. 30:80 et seq., ACT 404 of 1993). A notice to bidders is mailed to eligible contractors. Pre-registration and completion of a Mandatory site visit are typically required to be eligible to submit a bid.
Applications are reviewed by OSR staff for completeness and then presented by staff at the next quarterly OSR Commission meeting for approval. Contractors are eligible to bid on projects once approved by the OSR Commission. Contact OSR staff for dates of upcoming quarterly meetings.
Oilfield Site Resoration Section Contact Information
617 North Third Street
LaSalle Building, 9th Floor
Baton Rouge, Louisiana 70802
P.O. Box 94275
Baton Rouge, Louisiana 70804
Fax (225) 342-2584
Phone (225) 342-6089
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