Watchdog: Government isn’t sufficiently tracking costs from ‘orphaned’ oil, gas wells

Costs to the government from dealing with “orphaned” oil and natural gas wells on federal land are likely increasing, the Government Accountability Office (GAO) said.

But the Bureau of Land Management (BLM) doesn’t track the costs of dealing with such in an effective, agencywide way, the GAO concluded in a Tuesday report.

“Precisely how the agency’s actual reclamation costs and potential liabilities have changed is unclear because BLM does not systematically track them at an agency-wide level,” GAO auditors wrote in their report.

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“BLM headquarters officials we interviewed told us that they did not have any information on actual costs incurred to reclaim orphaned wells and stated that BLM’s data systems were not designed to track incurred reclamation costs,” the auditors wrote.

Orphaned wells are old oil and gas wells whose driller is unable to pay to reclaim them, usually due to bankruptcy.

Auditors gathered data from 13 of the BLM’s 33 field offices to try to get their own estimate of orphaned well costs.

That exercise found that those offices spent about $2.1 million between 2010 and 2017 on orphaned wells. The average cost were well was $267,600, compared with a $171,500 per well cost when GAO examined the issue in 2010.

The total cost of reclamation for orphaned wells those offices knew about was $46.2 million.

The GAO also found that the number of known orphaned wells across BLM lands has increased to 219 in 2017, from 144 in 2010.

Rep. Raúl Grijalva (Ariz.), who requested the report in his role as the top Democrat on the House Natural Resources Committee, said it shows the need for better regulation of industry and for the BLM to better track wells.

“Oil and gas drillers shouldn’t be able to pass their cleanup costs on to the public,” he said in a statement.

“Despite what Republicans keep telling us, the fossil fuel industry isn’t being regulated into the ground. Too often, it’s freeloading off the American people, and this report tells us we don’t even know how much it’s costing us.”