Abandoned gas well equipment on private property near Ruston.
If there was still any lingering doubt after the passage of SB 469 that Gov. Bobby Jindal and the Louisiana Legislature are in an unholy alliance to give big oil carte blanche to rape the landscape while pillaging the state’s resources, that doubt should be erased with the release Monday of a state audit of the Office of Conservation, Louisiana Department of Natural Resources.
The audit report, released by Legislative Auditor Daryl Purpera, reveals that:
- Current Office of Conservation regulations, unlike other states, do not require that all oil and gas drilling operators provide financial security on their wells;
- Financial security amounts outlined in agency regulations are insufficient to cover the cost of plugging most wells;
- The office did not inspect 53 percent of oil and gas wells in accordance with timeframes established by the commission over a six-year period and did not inspect 25 percent at all;
- The office has failed to develop an effective enforcement process to “sufficiently and consistently” address noncompliance which might deter operators from committing subsequent violations;
- Violations were not identified or addressed in a timely manner when identified nor did it conduct re-inspections to determine if fines were in order;
- Approximately $471,000 in penalties were not assessed in fiscal years 2011 and 2012;
- Current procedures do not effectively identify inactive wells and because operators are not required to report actual production by well, individual well production amounts cannot be verified;
- The Office of Conservation did not consistently ensure that inactive wells were plugged within 90 days as required by state regulations.
- During fiscal year 2008 through 2013, the office did not issue compliance orders to plug 416 (86 percent) of 482 wells designated as having no future utility;
- Because of insufficient regulations, 5,239 of 11,269 wells (46.5 percent) were found to be inactive for more than 10 years and are at risk of becoming orphaned.
Orphan wells are abandoned oil and gas wells for which no responsible operator can be located or such operator has failed to maintain the well site in accordance with state regulations, the audit report said.
The laissez-faire attitude of enforcement on the part of the state has given rise to ever-growing numbers of abandoned wells throughout Louisiana and the Office of Conservation has neglected to conduct required inspections of orphaned wells. Of 270 wells orphaned from September 2010 to April 2013, the office failed to inspect 124 (46 percent) of those within the required 90 days and 87 of those 124 (70 percent) were not inspected at all as of July 2013. “Conducting inspections is important to ensure that wells are appropriately prioritized for plugging and that conditions at the sell site do not pose a risk to the environment,” the audit report said.
The Office of Conservation has recovered only $3.6 million from 13 previous operators who abandoned wells since 1993, the audit said. Lax enforcement of standards for which penalties for violations can run as high as $5,000 per day resulted in the collection of only about $900,000 for the six-year period of 2008 through 2013.
This lack of enforcement has had two results: millions of dollars are left uncollected for violations and operators are reluctant to take corrective measures even when cited. Accordingly, Office of Conservation enforcement does not deter operators from experiencing subsequent violations, the report said.
In fact, the audit report said, the Office of Conservation cannot even identify the actual number or type of violations cited on inspections.
Meanwhile, as of July 2013, there are 2,846 unplugged orphaned wills scattered across the state with the heaviest concentration in northwest Louisiana and along the Louisiana coast.
In management’s response to the audit, Commissioner of Conservation James Welsh said his office “takes the job of regulating the oil and gas industry seriously” and that his office is already in the process of addressing several of the concerns listed in the report.
“Conservation staff and management have been diligent in working to resolve these issues and will continue seeking a means to do so that does not create unintended consequences such as sharply increasing the rate of wells having to be declared orphaned,” he said.
Welsh, in his eight-page management response, agreed with all 21 recommendations of the audit report.
But with the honeymoon between the administration and big oil rolling blissfully along, it is doubtful that things will really change. Why should they?
On the one hand, operators have no incentive to clean up after themselves because of the practice by the Office of Conservation of winking and looking the other way when operators walk away from wells. There are few inspections and even fewer violations, and compliance orders are practically non-existent, so why bother?
On the other hand, just in case some rogue state agency like the Southeast Louisiana Flood Protection Authority-East (SLFPA-E) decides to take it upon itself to seek redress from 97 oil, gas and pipeline companies for the carnage they have wreaked on our coastal waters, all they have to do is throw money at the legislators and Gov. Bobby Jindal to be sure that such efforts are thwarted before they get out of the starting gate.
Altogether, the 144 current legislators and Jindal have raked in about $6 million in campaign contributions from big oil.
Yes, that’s a chunk of change but for the oil companies—ExxonMobil’s 2013 fourth quarter earnings (net profit) were $8.35 billion (That’s just three months)—it’s chump change.
Had that lawsuit by SLFPA-E been allowed to go forward, God forbid, even if the oil companies prevailed, they would have spent in legal fees alone far in more than the $6 million that they invested in those campaign contributions as a hedge against such an inconvenience.
Had they lost the lawsuit, however, the cost would have been in the billions of dollars, so what’s $6 million among friends? A mere pittance.
So now the legislators and Jindal can continue to accept big oil’s money, take smug satisfaction in their illegitimate marriage for the welfare of their benefactors and slap each other on the back for their brilliant legislative maneuvers. The oil companies now have a free pass to continue to destroy the Louisiana marshes and landscape and everyone, as my grandfather used to say, is happy as a dead pig in the sunshine. Everyone, that is, except the losers.
Oh, that’s the citizens of Louisiana but who gives a crap about them?
The next election is more than a year away and their memories are so short.