The WOGCC has 41 full-time employees, an Assistant Attorney General, and a contracted hydrogeologist.

Transcription

1 Wyoming Oil & Gas Conservation Commission Strategic Plan Update: January 1, 212 through December 31, 212 Quality of Life Result: Wyoming s natural resources are managed to maximize the economic, environmental and social prosperity of current and future generations. Contribution to Wyoming Quality of Life: (functions) This agency contributes to Wyoming s quality of life by encouraging the beneficial and environmentally responsible development of the state s oil and gas resources to generate revenue for the general fund which supports other agencies and the benefits they provide. One goal is to protect human health and the environment by avoiding contamination of the soils and underground and surface water at drilling and producing locations. A second goal is to insure those locations are properly reclaimed at the end of production activities so that the land can be returned to beneficial use. The Commission is charged with preventing waste of hydrocarbons beneath our state s lands and protecting correlative rights as well as maximizing the state s resources. Basic Facts: The WOGCC has 41 full-time employees, an Assistant Attorney General, and a contracted hydrogeologist. Our total budget for the biennium was $9,78,39 and the budget for the biennium is $1,816,45, none of which comes from the general fund. Our revenue is derived from the conservation tax. This is a tax on oil and gas sales paid by oil and gas operators, not the public at large. We have been granted primacy by the Environmental Protection Agency for the regulation of underground injection class II wells. We received a grant reimbursement from the EPA for FY 211 and 212 of $391, and will receive approximately $2, for FY 213 and 214. Our website is an extraordinary customer outreach tool. The website is accessed by other government agencies, the public and industry representatives seeking information about wells, production, mapping, and a myriad of other types of information. Six of our most important programs and/or functions are: 1. Permitting and maintaining records on wells regulated by WOGCC 2. Field Inspections 3. Underground Injection Control Program 4. Matters set for hearing by the Commission or Examiners 5. Orphan well plugging 6. Website These programs and/or functions ultimately affect the entire state s population.

2 Performance #1: Permitting and maintaining records on wells regulated by WOGCC. 12.% 1. Percent of Drilling Permits approved within 3 days of receipt from 1/1/2 through 12/31/212 1.% 8.% 6.% 4.% 2.%.% Our goal is a self-imposed target to approve a permit within 3 days of its receipt. The percentage of permits approved in that time frame has decreased each year since 21 because staff must check the drilling and completion plans that accompany the permits with regard to fracture stimulations, check to see if the well is in the sage grouse area, also approving horizontal drilling permits in the eastern part of the state requires more time for review plus pre-site inspections prior to approval. The number of permits to drill horizontal wells has steadily increased since 21. In that calendar year (CY) we approved 341 permits; in CY 211, we approved 768; in 212, 1,26 were approved and for the first six months in 213 we have approved 555 horizontal permits. The following figures include the numbers mentioned in the prior sentence. From January 1, through December 31, 211, we received 5,17 permits, approved 4,764, denied 64, had 279 left to approve, which were subsequently approved, and 4,265 or 83.5% were approved or denied within 3 days. From January 1, through December 31, 212, we received 3,847 permits, approved 3,59, denied 65, had 192 left to approve, and 2,99 or 77.7% were approved or denied within 3 days. From January 1, through June 3, 213, we received 1,916 permits, we approved 1,62, denied 18, had 296 left to approve and 1,142 or 59.6% were approved or denied within 3 days The Commission is considering modifications to its procedures which will allow staff more time to approve permits.

3 Performance #2: Field Inspections 3 2. Number of Inspections for Bond Release 1/1/22 through 12/31/ The agency requires a bond in satisfactory form which is held by the State of Wyoming on the condition that wells be operated and maintained in such a manner as not to cause waste or impact the environment and upon permanent abandonment, be plugged in accordance with the regulations. Annually, field inspectors performed thousands of inspections of drilling locations, seismic projects, producing well locations, facilities about which we received complaints, and well plug and abandonments. Before a well site is released from the operator s bond, pits must be closed and reclamation of the surface must be completed in accordance with reasonable landowner s wishes, and/or to resemble the original vegetation and contour of the adjoining lands. Drilling inspectors check locations of all plugged and abandoned wells for compliance with these requirements. Other inspections include a review proposed wells for which the drilling permit has expired to ensure locations were not built and pits were not constructed. In calendar year 212, field inspectors provided 2,476 well site inspections for bond release and completed a total of approximately 7, inspections. The WOGCC will continue inspections making it a priority activity. Develop and implement a thorough tracking system to better account for all inspections conducted. Currently the required tracking system covers only plugged and abandoned (P & A), mechanical integrity test (MIT), and Underground Injection Control ( UIC) inspections with individual field personnel tracking other inspections with variable effectiveness.

4 Wells Tested % Not Witnessed Performance #3: Underground Injection Control Program 3. Total Wells Tested vs. % Not Witnessed 1/1/22 through 12/31/ Year Total Wells Tested % Not Witnessed 3. The purpose of Underground injection control regulations is to protect underground sources of drinking water. The Class II program was delegated to the Commission by the United States Environmental Protection Agency (EPA) in Regulations provide that injection and disposal wells must be constructed and maintained in a manner that limits fluids from entering any interval other than one that is hydrocarbon bearing or contains water that is not fresh or potable. A new injection or disposal well must demonstrate that it does not have leaks in the casing, tubing or packer (demonstrate that it has mechanical integrity) prior to operation and at least once every five years thereafter. Our commitment to EPA is that field personnel will witness in excess of 25% of all MITs run. Historically, we have witnessed in excess of 9% of the tests on injection wells. The majority of the tests are scheduled on existing wells which are being retested on five-year cycles, but operators are required to call in for testing to be witnessed when new conversions are ready for testing. In calendar year 212, field inspectors performed 1,112 site inspections of injection wells independent of UIC MITs. There were 1,22 UIC MITs conducted with approximately 99% witnessed. In calendar year 212, MITs were conducted on 267 idle producing wells with 91% of those being witnessed by WOGCC staff. Continue to witness as many of the UIC wells and idle oil and gas well mechanical integrity tests possible with current resources.

5 Performance #4: Matters Set for Hearing 7 4. ANNUAL DOCKET COUNT 1/1/22 through 12/31/ HEARD BY COMM. SHOW CAUSE HEARD BY EXAMS. ADMINISTRATIVE APPROVALS x The Commission holds monthly hearings to consider requests by operators for amendments or exceptions to existing rules, to create drilling and spacing units and enhanced recovery units; to approve injection and disposal wells; or to approve of pit or water treatment processes. The Commission also hears show-cause matters prepared by staff to address violations of the rules by the operators. All cases have to be noticed in relevant county and statewide newspapers prior to the hearings. A total of eight employees plus the assigned staff attorney general are involved in the hearings on a regular basis and eighteen others have participated in the show-cause hearings. The exploration for and development of new oil and gas producing formations using horizontal drilling and completion techniques has resulted in an increase in the number of spacing order applications submitted by the industry in the last few years. We have added Administrative Approvals to the chart this year to reflect the staff s workload. These applications are reviewed by staff and if it meets the conditions set forth in the rules and regulations, it can be administratively approved unless there is a protest, then it becomes a matter heard by the Commission. Commission staff will continue to provide documentation and reference specific rules to ensure the Commission s decisions and subsequent orders are not appealed. Note that any hearing decision can be appealed. The Commission staff will review numerous rules for revision including rules used to address which applications require full Commission approval or are heard by Commission staff examiners and which ones can and should be administratively approved. Changes will be considered

6 to make the rules protective of all parties rights to notice and an opportunity to object to an application and at the same time streamline the manner in which certain spacing applications are approved. Performance #5: Orphan Well Plugging Total Fee, State & Injection Wells 1/1/22 through 12/ Orphan Wells Plugged 1/2/22 through 12/31/212 wells regulated orphan wells plugged All wells that have reached the end of their productive life must be properly plugged and the surface restored to original condition. When operators go out of business or leave the state, idle wells that remain and that are located on fee or state lands minerals may become orphan wells of the state. If an operator does not exist to plug, abandon and reclaim the orphaned well, the Commission performs the work. Two sources of funds are available to accomplish this work idle well bonds posted by

7 operator of the well which is ordered forfeited by the Commission, and a portion of the Commission s conservation tax that has been set aside as an orphan well fund. During the ten year period shown on Figure 5, the number of fee, state and injection wells regulated by the Commission increased 19.3% from 22,562 in 22 to 26,925 to-date in 213. Orphan well count has increased in the past five years due to the decrease in the natural gas price and the resultant number of bankruptcies experienced by coalbed methane well operators in the Powder River Basin. In 212, WOGCC field inspectors plugged and abandoned 23 orphan wells and continued the environmental investigation and remediation of an orphan field which will be a nearly $1million project at completion. Since January 21, 161 orphan wells have been plugged. Since January 21 the agency has taken a proactive approach to address wells which have the potential to become orphans by meeting with operators annually, at a minimum, to discuss plans for idle wells and to require idle well bonding. An idle well is a well that is inactive or not producing, injecting, or being used for reservoir monitoring. In 28, the Commission increased the idle well bond from $3. per foot to $1. per foot of total depth for each well. As of March 213 there are a total of 9,927 idle fee and state wells in Wyoming. This is down from a total of 11,1 fee and state idle wells in March 211. There are currently approximately 1,2 wells on the orphan well list. The majority of which are coalbed methane wells. The WOGCC is planning a multi-year plugging project whose goal is to plug, abandon and restore the surface of approximately 3 orphan wells per year. The actual field work on the first phase of the initial 3 wells is projected to begin in spring 214. The wells on the orphan list are prioritized by risk to the environment or human health for abandonment with those wells that pose the greatest risk moved to the top of the list for plugging. Performance #6: Website

8 6. The IT department has the electronic filing of forms and reports such as sundry notices, notice to commence drilling (spud), and blow-out preventer protection (BOP) test notices on-line and it has met with good support from the operators. The system was upgraded from Exchange to Google Mail in 211. The Commission upgraded their link to the outside world in 211 by upgrading to a 1 mbps link; this upgrade provides a higher throughput of data incoming and outgoing from the Commission s website. Electronic filing of spill reports was added in 211. The electronic filing, where applicable, greatly streamlines the reporting requirements and aids in more accurate and timely filing of reports by the operators, while decreasing the staff s workload in processing reports, allowing them to concentrate on the issues surrounding the reports and processing more data. Outside requests for data continues to be steady as operators and other entities tighten their focus on oil and gas issues. Often times these requests require custom queries by the IT staff and are evaluated on a case-by-case basis. The Commission and IT department continues to increase the amount of historical data availability, so far we have added historical production, hearing exhibits and feasibility studies to the offering on the websites, with the industry fully embracing these additions. The Commission and various federal agencies, specifically the Reservoir Management Group of the BLM, are continuing to work together and share data. This close working relationship enables not only the two entities to have the data they need at their fingertips, but it also allows industry access to data they need to make critical business decisions. A new version of the GIS/Map Server was brought online in 212 and we continue to bring new features online in that area. In the future the IT Department will continue to add features to the website(s) and the in-house applications as the needs require and justify. The IT department will be upgrading the data servers and back-end database operating system, as well as continuing to enhance the availability and accuracy of the data. The IT department will be bringing additional storage capacity on-line to hold the additional data and electronic images that the commission, industry and other regulatory requirements are mandating. Capturing additional data as it pertains to the proposed Ground Water Baseline Water Well sample testing is an area that we will be working on, it is our intent to enable as much e-filing of these reports as possible in order to streamline the process.