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Published: Wednesday, 9/15/2010

Interior: Idle wells in Gulf must be plugged

ASSOCIATED PRESS

WASHINGTON — The Obama administration said Wednesday it will require oil and gas companies operating in the Gulf of Mexico to plug nearly 3,500 nonproducing wells and dismantle about 650 production platforms that are no longer used.

Interior Secretary Ken Salazar said a formal notice to leaseholders should make energy production in the Gulf safer and prevent potentially catastrophic leaks at wells that in some cases have been abandoned for decades.

Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, and other officials said the initiative was under consideration long before the April 20 explosion of the Deepwater Horizon rig, which killed 11 workers and led to the spill of more than 200 million gallons of oil from an undersea well.

More than 27,000 abandoned oil and gas wells lie beneath the Gulf of Mexico, and more than 1,200 oil rigs and platforms sit idle. An Associated Press investigation showed that many of the wells have been ignored for decades, with no one checking for leaks.

The order issued Wednesday requires operators to plug wells that been inactive for the past five years. Production platforms and pipelines must be decommissioned if they are not being used for exploration or production, even under an active lease.

The order addresses what is known in the oil and gas industry as “idle iron” : wells, platforms and pipelines that are no longer used for production or exploration and do not serve a useful economic function.

Federal regulations require idle structures to be decommissioned — a process that involves plugging wells and dismantling and removing platform structures and pipelines — within one year of the lease's expiration date.

Historically, oil and gas producers have asserted that certain idle platforms, wells and pipelines were still valuable, because they might one day be used to support other active wells nearby. Oil companies have been reluctant to plug the wells and remove the infrastructure until the associated lease expired — sometimes years after the structures were out of use.

“As infrastructure continues to age, the risk of damage increases. That risk increases substantially during storm season,” said Bromwich, adding the new order was expected to significantly reduce such hazards.

An Associated Press investigation in July found that federal regulators do not typically inspect plugged wells or monitor them for leaks.

About 50,000 wells have been drilled in the Gulf over the past six decades, with about 23,500 permanently abandoned, the AP found. Another 3,500 are classified by federal regulators as “temporarily abandoned,” with sealing procedures that are not as stringent as those for permanent closures.

Some of the “temporarily abandoned” wells have been left that way since the 1950s, without the full safeguards of permanent abandonment.

Petroleum engineers say that even in properly sealed wells, the cement plugs can fail over time and the metal casing that lines the wells can rust. Even depleted production wells can repressurize over time and spill oil if their sealings fail.

Current federal regulations require that wells be permanently plugged and structures be decommissioned within a year after a lease is terminated. The order issued Wednesday directs that this process must be initiated if the wells are no longer being used for exploration or production, even under a current lease.



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