Zurik: State’s abandoned oil well dilemma ‘a crying damn shame’
NEW ORLEANS (WVUE) - A retired U.S. Army general says Louisiana lawmakers are stuck on stupid. And that stupidity, he says, has helped businesses leave costly pollution in their wake.
"To put it mildly," Lt. Gen. Russel Honore, U.S. Army (Ret.) says, "I think it's a crying damn shame."
This retired Army officer - commander of the U.S. military response to hurricanes Katrina and Rita - rarely speaks mildly.
"This is the biggest scam in the state," he tells us. "It pisses me off to no end."
He's talking about the almost-20,000 unplugged, inactive oil and gas wells lying In the water, off highways and even in backyards across the state of Louisiana.
"It's not right," the general insists. "But it's Louisiana."
The state classifies almost 4,000 of those wells as "orphaned". You might call them something else.
"A well is not orphaned, it's abandoned," Honore says. "And the way the legislators in the State Capitol, the ones we have there now, have shaped this legislation over the years is to allow the deadbeats to abandon the wells and get away with it, and talk about it as a business right that they have."
Shoreline Southeast and one of its sister companies, Shoreline Offshore, have the third-most abandoned wells, 118 at last check of the state's well data. The companies' parent, Shoreline Energy LLC, went bankrupt in 2017 and walked away from those wells, leaving the state with the mess - and most of the cleanup costs.
It's not right, it's not fair and it's destroying our environment.
We travelled to Lafayette, where Shoreline Southeast had its office at spacious Park Tower on E. Kaliste Saloom Road. There's another company there now - but they're quite familiar with Shoreline.
"Is Mr. Hurley in?" we asked a staffer at the office.
"No, he is not," she told us.
"When do you expect him back?"
"I'm not sure."
"OK, we sent him a letter to..."
"Yeah, we received it," the staffer informed. "There won't be any comment."
We were looking for Daniel P. Hurley, the owner and CEO of Shoreline Energy. Hurley shuttered Shoreline and abandoned its subsidiaries' unproductive wells.
Back in November, the state's Office of Conservation insisted that someone like Hurley would not be able to walk away from such orphans and still operate wells in Louisiana.
"If they ever want to operate in the state of Louisiana again, then they do because we don't allow them... neither their company nor their officers to become part of another company to operate in the state of Louisiana," said John Adams, the Office of Conservation's senior attorney.
It appears the law has loopholes.
Shoreline went away. It does not exist anymore. It went through bankruptcy and dissolved. There is no Shoreline.
After Shoreline abandoned many of its wells, that new company, Marquis Resources, took over the rest. Marquis works out of the same office as Shoreline did, down to the street and suite numbers on E. Kaliste Saloom.
The owner and CEO of bankrupt Shoreline, Daniel P. Hurley, is now the CEO of Marquis Resources. According to La. Secretary of State records, a group of investors actually owns the company; technically, he works for them. And Marquis picked up the leases for some of Shoreline's wells.
"We are Marquis Resources," the staffer at Park Tower told us. "We are not affiliated with Shoreline."
"You used to be, though," we replied.
"Shoreline went through bankruptcy and it's no longer in existence," she insisted.
We asked her to confirm that Hurley is at Marquis Resources now.
"A lot of us here were," she responds. "But we're not affiliated with Shoreline at all. Shoreline went away. It does not exist anymore. It went through bankruptcy and dissolved. There is no Shoreline."
We asked Patrick Courreges, communications director for the Department of Natural Resources, whether Hurley and Marquis Resources are skirting the state's rules, jumping from one company to the next after abandoning oil wells and still doing business here. "It doesn't appear so," he says.
DNR, under which the Office of Conservation operates, acknowledges that Hurley was an officer with Shoreline; when the company went belly up and "orphaned" some of its wells, the person in charge of Shoreline went to another company, which operates wells in Louisiana.
"But we didn't have an issue with him being a bad operator, as far as not keeping up wells," Courreges explains. "He's not an officer of the new company."
As for such a company as Marquis having the same officers and even the same employees as an orphan well operator, he says, "We see that commonly."
So, Marquis Resources has the same office as Shoreline Southeast; the companies have the same staff, same CEO. But since La. Secretary of State records don't list Daniel Hurley as an owner of Marquis Resources, the state says Marquis can operate and own wells.
Lt. Gen. Honore calls it a major weakness in state law. "Hello!" he exclaims. "That is a scam! When are the lawyers and Louisiana citizens going to wake up to see how we're being screwed? Because, eventually, they walk away from these wells."
When Marquis bought some of Shoreline's wells last year, the company received 71 wells that are classified by the state as "Shut-In/Future Utility" - they're inactive, but not yet plugged and abandoned.
It's often the case that such wells are shut down temporarily as production wanes, but left available for future development. It's also the case that today's "future utility" wells could become tomorrow's "orphaned" wells.
"There is that possibility," Courreges says. "It's pretty well established, the longer they stay that way, future utility, the more likely it is nobody's going to ever do anything with it."
And this brings up a larger problem in Louisiana.
Marquis has a small slice of the future utility wells in the state. A map of Louisiana helps tell the story.
The red dots indicate all orphan wells; the purple, those future utility wells. All totaled, the state has at least 14,000 unproductive wells that could be orphaned or abandoned soon.
In fact, 2,100 have been unproductive for at least a decade. A few dozen were first producing in the 1930's, 40's and 50's - wells that haven't been operational in decades but have yet to be declared "orphaned" or abandoned.
Altogether, the state's 20,000 inactive wells could cost billions of dollars to remediate. And the state doesn't have that money.
It's a problem that Lt. Gen. Honore says should never have gotten this bad. "Don't be stuck on stupid," he advises, recalling a phrase he made famous in the aftermath of Hurricanes Katrina and Rita.
Honore, now a leading activist against industrial pollution, says the state is setting itself up for another potential disaster.
"It's not right, it's not fair and it's destroying our environment," he says.
The retired military commander co-founded Green Army, a coalition of environmental activists. He tells us they're pursuing a legislative agenda that would toughen laws regarding operators.
- Click here and here for more in Lee Zurik's "Left for Dead" investigation.
- You can find an extended interview with Lt. Gen. Russel Honore at this link.
Copyright 2018 WVUE. All rights reserved.