Office of Conservation

STATE’S CONSERVATION OFFICE REPORTS ON OILFIELD SITES

The state Department of Natural Resources (DNR) has aggressively pursued oilfield site restoration since 1994. Several years ago as Act 404 was established by the legislature, both state government and the oil and gas industry moved into fast-gear to evaluate and identify orphaned or abandoned oilfield sites in Louisiana. It was determined then, that the oil and gas industry’s role would be to provide funding for restoration of such sites.

“Today, the good news is that 1,066 abandoned wells have been plugged across the state,” noted Commissioner of Conservation Jim Welsh. Serving as head of DNR’s Office of Conservation, where the Act 404 program is operated, Welsh oversees a staff of engineers and managers that see to it that the jobs get done. The Oilfield Site Restoration Commission, in turn, is composed of ten members that approve the contractual work awarded to the lowest qualified bidder on each project.

While nearly 80 percent of the abandoned sites were initially identified in north Louisiana, priority sites in the Lafayette area and in the central part of the state were also considered. To date, records show that 1,066 wells have been plugged and 399 pits have been closed. Within the current fiscal year’s budget, an additional 150 wells are scheduled for plugging. The current balance of the trust fund is $3.8 million.

According to the DNR Office of Conservation, revenue for the abandoned oilfield fund is generated from a fee on production. The fee consists of one cent per barrel of oil and condensate, and 1/5 of one cent per MCF of gas. According to the law, when the balance of the fund falls below $6 million, the fee is again collected.

Welsh said that a formal procedure is used for orphaning a well and while the last operator of a closed site may take responsibility, many times there is no responsible party on record. He said properly closing and restoring such sites so there is no danger to the public health and the environment is the program’s goal.

Editors: For more information on this topic and report, please contact the DNR Public Information Office at 225-342-8955.