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Audit Finds that Regulation and Inspection of Oil and Gas Wells is Inadequate

Posted On behalf of Simien & Simien on Jun 04, 2014 in Oil And Gas

An audit of Louisiana oil and gas wells, including orphaned wells, has found that regulation of the wells by the Louisiana Department of Natural Resources’ Office of Conservation (OC) is falling short in several areas. The Louisiana Legislative Auditor has recommended new/increased producer fees that could improve well inspection practices.

Overall, the OC has not effectively regulated these wells, including failing to require operators to provide financial security which could be used by the state to plug a well if it becomes abandoned.

Additionally, even when financial security is provided, it is often not enough. According to the report, this situation could create an incentive for operators to abandon wells instead of plugging them.

The report also revealed that OC inspections of wells are often late and sometimes are not even conducted at all. More than half of all wells inspected between 2008 and 2013 were inspected late; 25 percent of wells were not inspected at all. When violations were noted, they were not addressed in a consistent or timely manner and the agency found that approximately $471,000 in penalties were not assessed between 2011 and 2012.

As of 2013, there were nearly 2,000 orphaned wells that had not been plugged and only 42 actually had been which was about one-quarter of the numbers of wells plugged in 2010.

The oil damage lawyers at Simien & Simien have responded to these findings.

“The state’s program has a huge backlog and is woefully underfunded and is dealing with thousands of wells needing to be addressed. There is a long history of polluted land and a state program incapable of fixing the problem as well as oil and gas exploration companies leaving the bag behind for individuals and the state to hold.

The abandoned wells program could be a case study in what land owner of oil producing lands may face if they don’t act within statute of limitations and fail to seek legal counsel. Land holders also could find themselves holding the bag with a state “abandoned wells” program incapable of responding, land with contaminated oil retention pits that were not properly remediated, brine or other wastes waste being improperly re-injected to the wrong subsurface levels possibly resulting in contaminated aquifers, etc.”

Has your land been damaged due to oil or gas wells? Contact Simien & Simien at 1-800-374-8422 for more information on how an attorney can help you fight for your right to compensation for property damage.