Exploration and Production Technologies
Technology’s Impact on Production: Developing Environmental Solutions at the State and National Level

DE-FC26-06NT15567

Goal 
The goal of the project is to assist State governments in the effective, efficient, and environmentally sound regulation of the exploration and production of natural gas and crude oil through specific project efforts to address current issues. The issues addressed are national in scope. However, significant regional differences among States make “one-size-fits-all” programs unacceptable. One of the strengths of IOGCC is its ability to address these national issues while maintaining more local flexibility. There are two basic thrusts of these efforts: 1) research and 2) transfer of findings to appropriate constituencies. IOGCC is carrying out three projects consistent with the overarching strategies:

  • Task 1—Orphaned wells program guidelines. The plugging initiative will include an outreach component designed to inform the constituencies most impacted: State officials, Federal officials, the general public, and industry at several levels.
  • Task 2—Evaluate the impact of new technologies on environmental protection. This study will identify barriers to the use of technology in environmental protection and areas for State and Federal collaboration in improving regulatory programs.
  • Task 3—Assess technology issues associated with wells nearing the end of their productive life. The work under this task will include identification of cost factors in plugging operations, alternative materials, more effective techniques, regulatory barriers to new technologies and perhaps an examination of State bonding requirements.

Performer 
Interstate Oil and Gas Compact Commission, Oklahoma City, OK, 73105

Collaborators
IOGCC Member and Associate Member states

Background 
In 1992, IOGCC conducted a study entitled Produce or Plug: The Dilemma over the Nation’s Idle Oil and Natural Gas Wells. With this publication and the discussions it generated, IOGCC assumed leadership in exploring the role of government in the issue of orphaned wells and environmental protection. As part of its recent update of this publication, IOGCC developed guidance for regulatory programs to assist States in developing a plugging prioritization schedule that ensures that those wells at highest risk to the environment are plugged first. This project is designed to accomplish multiple goals and will be the most comprehensive approach to addressing this century-old problem.

In the early 1990s, the U.S. Environmental Protection Agency undertook a study of the States’ efforts in regulating the disposal of wastes associated with oil and gas exploration and production. Since then, there have been a number of developments involving the States and other stakeholders that have resulted in improvements in environmental protection. These efforts can be quantified and the resulting data communicated through IOGCC’s communications network to expose all stakeholders to the value of technologies and voluntary initiatives in bolstering environmental protection in oil and gas E&P operations. IOGCC’s study would also help document States’ efforts to regulate E&P wastes.

As a separate but related study, this initiative could be helpful in determining more cost-effective methods of preparing for the eventuality of well plugging. Questions need to be answered regarding the permanence of traditional well plugging techniques and materials, as well as those regarding the condition of existing wells plugged many years ago

Impact 
Benefits accruing from this project include results that will assist State and Federal governments in effectively and efficiently managing regulation of the exploration and production of oil and natural gas in the United States in an environmentally sound manner. The net benefit to the Nation will be increased oil and gas reserves and production, thereby reducing America’s dependence on foreign energy sources—with the economic benefits that follow—while minimizing the environmental impacts of those operations. The project will also prove useful in documenting efforts by the States to regulate wastes. A separate benefit of this study will be to identify barriers to the use of technology in environmental protection and areas for State and Federal collaboration in improving regulatory programs.

Accomplishments 
Published in 2008, Protecting our Country’s Resources: the States’ Case documents the current state of orphaned and abandoned wells in the nation. The IOGCC has been studying orphan wells and the costs and regulations associated with managing these wells since 1992. Over the years, states have been the leaders in implementing innovative programs related to orphan well management. Most oil and gas producing states have established plugging funds derived from taxes on production, fees or other assessments to plug orphan wells. However, while states have established plugging funds, those funds are insufficient to address timely cleanup of the remaining orphan wells. Therefore, it’s essential to establish innovative programs to plug existing orphan wells.

The IOGCC Orphan Well Task Force [external site], comprised of representatives from member states, developed this model prioritization schedule and fund disbursement framework in order to address the requirements related to Section 349 of the Energy Policy Act of 2005, which provides for the establishment of a program to provide technical and financial assistance to oil and gas producing states to facilitate remediation of environmental problems caused by orphaned or abandoned oil and gas exploration or production well sites on State or private land.

Research assessing emergent technology issues associated with wells nearing the end of productive life. Research will provide a 360-degree evaluation of the issues surrounding these wells including: (a) the location of orphaned and abandoned well sites; (b) well site remediation; (c) plugging materials; (d) plug placement; (e) the current regulatory environment; and (f) the identification of emergent technologies affecting end of life wells.

Current Status (January 2010) 
The IOGCC evaluation of the scope of orphan wells is complete and has been submitted to the U.S. Department of Energy (DOE) as a separate topical report. Protecting Our Country’s Resources: the States’ Case has been published and distributed to members of Congress, state oil and gas officials, state agencies, IOGCC member state governors and state oil and gas legislative committees and environmental representatives. A “micro-site [external site]” has been developed to specifically address orphaned and abandoned wells and continue to communicate the results of the study as well as future results. Both the model prioritization schedule and the model framework for fund disbursement have been completed and published on “Groundwork”.

State regulators are adapting technologies for their own use, but they are also working to adapt regulations for the new technologies used in exploration and production. Most states are working to modify oil and gas rules that were instituted 20-30 years ago to account for new knowledge and technologies that make it possible to produce more oil and gas from fewer wells than ever before and to accommodate production from unconventional sources that have recently become technologically and economically viable. This report will identify the technologies and regulatory processes that protect the environment and produce energy that the nation demands.

This project has been completed and the final report is available below under "Additional Information".

Project Start: June 29, 2006
Project End: June 28, 2009

Anticipated DOE Contribution: $647,716 
Performer Contribution: $177,000 (25% of total)

Contact Information 
NETL – Virginia Weyland (virginia.weyland@netl.doe.gov or 281-494-2517) 
IOGCC – Gerry Baker (gerry.baker@iogcc.state.ok.us or 405-525-3556x112)

Additional Information

Final Project Report [PDF-6.94MB]

 
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