Big Backlog of Oil, Gas Well Inspection

Monday, September 21, 2015 @ 04:09 PM gHale

The ultimate safety scare: There are insufficient resources to inspect high-risk oil and gas wells on federal land as a drilling boom continues in Wyoming, Colorado and other states, Interior Secretary Sally Jewell said last week.

The Obama administration proposed a fee on oil and gas drillers that would allow the Bureau of Land Management to hire more than 60 inspectors, but the proposal has not gained traction in Congress.

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The bureau has a “major backlog of inspections” as it tries to keep pace with a drilling boom that has sharply increased domestic oil and gas production in recent years, Jewell said.

“We do not have the resources necessary to do the job,” Jewell said. The inspectors’ mission is to protect the environment and prevent potential health hazards caused by leaking wells, she said.

Last year 40 percent of new wells on federal and Indian land with a higher pollution risk did not get an inspection from 2009 to 2012.

Asked if the situation had improved, Jewell said no, adding: “We are under-resourced.”

While the proposed fee has stalled in Congress, Jewell said it remains the agency’s best option to whittle its inspections backlog.

“It makes no sense not to match supply and demand,” she said, adding if the drilling boom slows or fizzles, the need to charge a fee would go away.

Jewell lamented a practice in which energy companies “flare” or burn off vast supplies of natural gas as they drill for oil. A report by the Government Accountability Office said 40 percent of the gas burned or vented could end up captured economically and sold.

The bureau has not completed updated guidelines on flaring, but Jewell said a proposed rule could release for public comment later this year. Even without federal rules, Jewell urged energy companies to rethink their practice of flaring natural gas in the pursuit of higher-priced oil.

“It’s crazy to vent natural gas into the atmosphere when natural gas is a fuel that can produce electricity at a much lower carbon footprint than other (energy) sources like coal,” Jewell said.

Meanwhile, Jewell said she is confident updated rules for oil and gas drilling on federal lands nationwide will end up upheld, despite a court challenge by four states and two industry groups. The Bureau of Land Management has delayed implementing the rules until a federal judge in Wyoming decides on the case.

Jewell said the rules “are based on common sense and science,” although she acknowledged they may end up needing to make some changes.

The rules, announced in March, would require oil and gas developers to report the chemicals they pump underground during hydraulic fracturing. The drilling procedure, known as fracking, involves pumping huge volumes of water mixed with fine sand and chemicals underground to crack open deposits and boost flows of oil and gas.

The federal rules would require pressure testing of newly installed wells.

The petroleum industry argues the rules would be costly to oil and gas developers. Officials in Wyoming, Colorado, Utah and North Dakota claim the rules would damage their economies by causing energy companies to move off federal lands to regions where oil and gas reserves can end up exploited from private land, where the federal government has less oversight. Two industry groups, the Western Energy Alliance and Independent Petroleum Association of America, joined the lawsuit.

Six environmental groups have sided with the Obama administration, saying the government needs strong rules for oil and gas drilling to protect water, wildlife and other resources on federal land.