Zurik: Orphan wells and the deadbeats who leave them - FOX 8 WVUE New Orleans News, Weather, Sports, Social

Zurik: Orphan wells and the deadbeats who leave them

SHREVEPORT, LA (WVUE) - -

Almost 4,000 abandoned oil and gas wells dot Louisiana's landscape and waters, from Oil City to Golden Meadow and beyond. Many of them have been deteriorating for decades; some of them are leaking.

And year to year, just as the state cleans up scores of orphan well sites, hundreds more are abandoned by their operators.

One of those wells sits in Rickey Jordan's backyard in Shreveport, as close as 10 feet from the house where his daughter and grandchildren sleep.

"Pretty close for comfort," Jordan tells us.

Well serial #22697 runs about a mile deep, and it's spewing gas at the top - hydrocarbons, likely methane.

"You can hear it," Jordan says, as he pours a little bottle of soapy water onto the wellhead.

Little bubbles rise from a small needle valve. "That's gas that's coming out of it," he tells us.

Jordan bought the house about 10 years ago. "That's not something that you'd expect to be in your back yard," he says, but, "for 78 years, it's been sitting here."

His real estate agent and property records disclosed nothing about the abandoned oil well from the 1930's.

"I'm thinking that, back in 1939, when the well wasn't producing any more, the state of Louisiana just told them to abandon the well," Jordan says. "They just walked away from it without plugging it. And Statewide Order 29-B states that the well should be cut at least two feet below plow depth. There shouldn't be anything on top of the ground that you can see."

Records show Harry Fotiades' oil company walked away from that well at Jordan's home, located less than a half-mile from Shreveport's Cross Lake.

When Jordan first noticed the well, he thought it was an abandoned sewage line. But once he realized what it really was, the backyard has become off-limits to his grandchildren.

"We keep them in the house all the time because it's not safe," he tells us.

The state of Louisiana lists 3,979 oil and gas wells as orphans, as of October 2017. They're everywhere: on the water, in backyards and in fields around Shreveport, Lake Charles, Baton Rouge and New Orleans.

Derek Segars is just one of the people who have made money off these now-abandoned wells. His company, Segars Operating in Monroe, has the fourth most abandoned wells on the state's list at 66.

Segars, in an unscheduled interview with FOX 8, says he doesn't feel bad for leaving those wells unplugged.

"If you don't have the clout to go out and borrow money, to go bankrupt to do it, there's no sense in doing it," he says.

Segars should have plugged all 66 wells, but he walked away instead, leaving it to the state to pay the costs for plugging the wells and cleaning whatever mess their operators have left behind.

"About $6,000 a piece to plug," Segars says of the small wells he operated. "They're stripper production. I didn't drill them in the first place... And you know, you never will make enough money to plug them."

Segars acknowledges that he knew going into the effort that he might never plug them. When we ask him if he feels that was right, he responds, "No, but... it happens everywhere."

The language regarding these wells can be confusing. The Department of Natural Resources defines an abandoned well as "a well no longer in use, whether dry, inoperable or no longer productive, and the previous operator has intentionally relinquished its interest in the well."

Orphans, though, are those abandoned wells that "require cleanup activities" or otherwise are "not in compliance with applicable laws and regulations."

The state has a fund that pays for plugging abandoned wells. That fund is replenished by a quarterly fee on oil and gas operators; the more oil and gas they produce, the more they pay into the fund.

But Segars tells us his own contribution to the fund "was in the pennies. It's a fractional tax... It might have been like $5 or $7 a month, total," over the years he was operating the wells - not quite $200, by his own estimate.

Last year the state plugged 43 wells.  But they can't get ahead of this potential environmental hazard.

That's because, in the same year, they declared at least 583 wells abandoned. And the Office of Conservation, tasked with monitoring these wells, acknowledges that some of them are potential safety and environmental hazards.

"I'm sure there are some out there that are not safe, yes," says Brent Campbell, the Office of Conservation's engineering regulatory director.

The Office of Conservation has little teeth to go after these operators. "We do what we can with what we have right now, the money that we have coming in," Campbell says.

State law doesn't allow the office to sue a company unless the clean-up and plugging expenses for a particular well exceed $250,000 per well. Then, and only then, can they go after a deadbeat operator for money.

Consider: If an operator wants to give up on a low- or no-producing well, and it costs anything less than a quarter-million dollars to plug it, there is little or no punitive action to dissuade such that operator from simply walking away from it.

FOX 8, using data from the state, located an abandoned well just outside of Thibodaux. We discovered it was leaking: a dripping wellhead, a hissing sound, an overpowering stench and blackened ground cover up to eight feet from the well provided clear evidence.

Amy Benoit and her family live about 800 feet from that well, just a couple of football fields away. She says it should have been cleaned up a long time ago.

"Where does all our money go?" Benoit asks.

Benoit says the smell can be unbearable - and until recently, the state has done nothing.

"The state don't have any money to deal with these wells," Benoit says.

FOX 8 informed state authorities about the well a few days after our interview with Benoit. The following day, crews from the Office of Conservation were at the site of that well, planning to fix the leak.

Back in Shreveport, we brought a leading environmental scientist, Wilma Subra, to the leaking well site.

"This one is a huge environmental problem," she told us. "This is so many wells, spread throughout the state, in residential areas and commercial areas. And there's not like a sign over one of these wells, 'Danger'."

Subra says no agency has studied the environmental impacts of these abandoned wells. For his part, the Office of Conservation confirms it has done no such studies.

T & M Production of Houston, Texas has the most abandoned wells in Louisiana at 330 as of Oct. 20, when the office last updated its orphan wells list.

Drum Energy of Monroe has the second most, 194. That company is still active with the La. Secretary of State's office - but they refuse to answer correspondence from the Office of Conservation or a letter that FOX 8 sent last month.

"How do you stop people from walking away from wells? You can't," says Gil Murphy, a Shreveport-based oil-and-gas investor.

Murphy once owned shares in High-Hope Oil and Gas; he says he sold his share in the company shortly before High-Hope abandoned its 41 wells.

"I'm not involved in it anymore," he says. "As ugly as it's going to sound, it's not my problem."

Murphy acknowledges that such operators might have made thousands, even hundreds of thousands from their wells before they walked away. "But the problem is, you take that hundreds of thousands you're making and you spend it elsewhere," Murphy warns. "The smart operator will take the money he makes and set aside for plugging liability; when it comes around, there's the money to do that."

He says much of the problem, from the operators' perspective, comes down to money. Small operators working on thin profit margins don't have the money or savings to cover the plugging costs, which can range from $4,000 to tens or even hundreds of thousands of dollars.

"What a lot of these folks have done is, especially when the price [of oil] fell, they just can't afford to operate them anymore," Murphy says. "So, they just walked away."

Some companies walk away, yet remain in business. In 2015, the state spent $587,000 plugging an offshore well left behind by TriPower Resources of Oklahoma.  TriPower abandoned Louisiana, but it still has active wells in Kansas and Texas.

The office chose not to go after TriPower to recoup money on that well, or a second TriPower orphan that cost an additional $387,000. TriPower owns two of the most expensive wells the state has ever been forced to clean up.

The state only has about $4 million a year to plug wells. And with the downturn of the oil industry, Louisianans may see even more abandoned wells popping up around the state.

"They really ought to be ashamed of themselves, because that's environmental," Benoit notes. "And they should take care of the stuff. When you put something on somebody's property, you should have enough respect to take it off, you know, once you're done with it... That's a lack of respect for everybody around here, oh, yes indeed."

We reached out to all of the operators mentioned in this report; none responded.

The Office of Conservation reports they recovered $3.6 million from 1993 to 2013, from 13 operators who abandoned their wells. After asking on Friday, the office tells us they are still trying to isolate instances after 2013.

---

If you know of an abandoned oil well on your property and want to tell us about it, send a note, photos, etc. to wells@fox8live.com.

Copyright 2017 WVUE. All rights reserved.

Powered by Frankly