With High Plains Gas Inc.'s failure to come up with a $6.8 million bond, Wyoming's state oil and natural gas regulator on Tuesday seized close to 3,000 idle coalbed methane (CBM) wells, essentially doubling an ongoing effort to plug all of the abandoned oil/gas wells (see Daily GPI, Dec. 11, 2013).
The move by the Wyoming Oil/Gas Conservation Commission (WOGCC) and supervisor Mark Watson means the state will pull nearly $8 million in bonds that High Plains already had in play with the state. Officials indicated those funds will be applied toward the cost of plugging the High Plains wells. Company officials were unavailable for comment.
Watson told NGI on Tuesday that High Plains had been given 120 days to find additional bonding. He told reporters state officials have worked with High Plains, but the company ultimately failed to meet the terms of an order issued by the WOGCC in the summer.
Among the High Plains wells, there are 2,200 fee and state wells that the WOGCC is responsible for plugging, Watson said. There are 46 injection wells under the jurisdiction of the Wyoming Department of Environmental Quality and 721 federal wells. He said the state would “begin plugging these wells after the original 1,200 orphan wells are plugged.”
Bruce Hinchey, president of the Petroleum Association of Wyoming (PAW), said after repeated efforts by the state to give High Plains more time, officials said, "that's it." PAW supports the statewide effort to plug abandoned wells and for members pay a tax to support the effort (see Daily GPI, May 14). "We definitely support the ongoing tax until all of these wells are plugged,” he said.
In kicking off the program earlier this year, Gov. Matt Mead warned that the state's total of idle or abandoned wells could climb to 5,700 as an outgrowth of a boom-bust in CBM, Mead's plan set an initial $3 million to begin addressing the problem. The plan calls for at least 305 wells to be plugged annually over the next four years.
State officials have said there is no definitive data on how much, if any, methane leakage has occurred at the idle wells.