Oilfield Site Restoration (OSR) Program
The Louisiana Oilfield Site Restoration Program was created in 1993 within the Department of Energy and Natural Resources to address the growing problem of unrestored "orphaned" oilfield sites across the State. Orphan sites are oil and gas wells or production facilities for which no viable responsible party can be located, or where such party has failed to maintain the site in accordance with State 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 sites 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 general fund tax dollars are utilized. The fee for full-rate wells 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 $8 million dollars a year to be utilized by the Program for orphan oilfield site restoration projects.
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' or contact Program staff.
The basis for SSTA minimums has been updated per the August 2021 memorandum from Commissioner Ieyoub. Acceptable funding mechanisms are provided in the June 2023 memorandum from Commissioner Edwards. Please direct any questions regarding these updates to OSR Manager Roby Fulkerson.
The following documents and forms related to SSTAs are also available:
|Funding Policy (8/2021)
|Acceptable Funding (6/2023)
|Qualified Cost Spreadsheet
|Qualified Cost User Guide
|FORM 9604 - Site Specific Trust Account
|FORM 9604-1 - SSTA Reassessment
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 if a fully-funded site specific trust account does not exist 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 Energy and 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.
For purposes of cost recovery, the program considers a single site to be all wells and facilities for an operator in a field.
The Program is operated by the Office of Conservation Engineering Regulatory Division within the Department of Energy and Natural Resources. Program oversight is provided by an Oilfield Site Restoration Commission which consists of ten members. The Secretary of the Department of Energy and Natural Resources serves as chairman of the Commission, while the Commissioner 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, Chair - Secretary of DENR
Monique M. Edwards, Vice-Chair - Commissioner of Conservation
Timothy Allen - Louisiana Landowners Association
Steve Maley - Louisiana Oil & Gas Association
Stephen Hennigan - Louisiana Oil & Gas Association
Elizabeth "Lisa" Creasman - Nature Conservancy
Barney Callahan - LWF, Sierra & Audubon Societies
Vacant - At Large
Vacant - Mid-Continent Oil & Gas Association
Vacant - Mid-Continent Oil & Gas Association
Monroe, Oakland and Truxno Fields, Union Parish. This project includes the plugging of 26 wells and the removal of 3 production facilities.
Orphan well location prior to plugging and abandonment activities.
Matted orphan well location- allows the contractor to access the site during wet conditions.
Equipment utilized during plugging activities.
Location upon completion of plugging and abandonment activities.
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.
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). 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.
617 North Third Street
LaSalle Building, 9th Floor
Baton Rouge, Louisiana 70802
P.O. Box 94275
Baton Rouge, Louisiana 70804
Fax (225) 342-2584