How Montana Is Cleaning Up Abandoned Oil Wells
How Montana Is Cleaning Up Abandoned Oil Wells
By Ray Levy-Uyeda, Yes!, August 13, 2020
Oil wells pollute even after the drilling and pumping stop, so this work could help prevent thousands of tons of potent greenhouse gases from contaminating air and water.
A farmer for most of his life, Sam Stewart bought farmland in Montana about 35 years ago. Since then, he’s planted and harvested his wheat and other crops around 16 open oil wells on this land, which he estimates were dug in the 1920s.
Maneuvering around the wells is not an arduous process, per se, but it requires seeding the same area twice, which is wasteful and can slow his process. The real nuisance is the invisible methane wafting into the air—a greenhouse gas with an impact 10 times that of carbon dioxide. “You don’t want loose gas being just emitted,” Stewart says.
Unplugged wells in Montana and across the country leak thousands of metric tons of greenhouse gases each year. They can also leach toxins into groundwater and surface water systems, contaminating aquifers. More often than not, these wells simply aren’t being cleaned up. That’s in part because a lack of funding and political will has stymied the state’s cleanup efforts, and in part because there’s uncertainty around ownership. “I didn’t know they were actually abandoned,” Stewart says of the multiple orphaned wells on his property. “I thought the oil company was responsible.”
A foundation formed in 2019 could finally help clean up some of these abandoned oil wells, including those on Stewart’s property. “The operator who is responsible is long gone,” says Curtis Shuck, founder of the Well Done Foundation. “Our focus is doing the right thing, leaving it better than the way we found it.”
Abandoned wells
The first oil wells in Montana were drilled at the turn of the century, and the industry experienced its first boom in the 1920s. Energy demands of World War II spurred a second boom; between 1942 and 1945, oil production in the Elk Basin region increased from 16,000 to 940,000 barrels annually. When those wells no longer produced oil, companies could just leave. The Oil and Gas Conservation Commission of Montana, tasked with identifying and plugging abandoned wells, wasn’t created until 1954, and by that time an untold number of wells had already been drilled, produced, and abandoned.
As more companies moved into Montana, oil and gas production grew into an increasingly important part of local and state economies; by 2015, it made up 5.6% of the state’s general fund. But the industry that once was a cornerstone of Montana’s economy is now in a nosedive: a yearslong decline in global oil production and demand compounded by the pandemic-induced economic slowdown has produced some of the worst oil production conditions in recent years.
In 2016, the most recent year for which he was able to provide data, 4,713 oil and gas wells were in operation in the state and 204 had been abandoned, according to Allen Olson, executive director of the Montana Petroleum Association, a trade organization that works on behalf of the businesses. But that’s a fraction of the tens of thousands that have been drilled in Montana in the past century.
Data on abandoned wells remain incomplete, which further complicates cleanup efforts. Plus, state legislatures have drastically different policies on how to address abandoned wells. One thing remains certain: The issue is enormous and far-reaching. A 2018 report from the Environmental Protection Agency estimated that the country has 3.2 million abandoned oil and gas wells.
Abandoned wells in Montana—left by companies that filed for bankruptcy, for example, default to the state. Theoretically, a state-run fund pays for well adoption and closure, but even under state control, the wells often lay unplugged, because plugging abandoned wells and restoring the surface land is expensive. Olson believes that the “state regulatory agency here is doing an excellent job staying on top” of plugging wells. But the state’s plugging plan doesn’t explicitly address the issue of abandoned oil wells, and also neglects to lay out a time-bound plan for plugging wells.
It’s not just that states like Montana don’t have a legislative apparatus to hold corporations accountable, says Mitch Jones, the climate and energy program director at Food & Water Watch, a nonprofit that pushes for corporate and government accountability. He says that the lack of governmental action is by design. When wells are abandoned, Jones says, “the costs of doing business are passed on to the public instead of being paid by the shareholders in the industry.”
Top, the well-plugging crew at Big West Anderson #3 well. Bottom, a crew member testing the emission of methane gas from the well during the plugging process. Photos from Well Done Foundation.
Nationwide, the federal government’s own agency in charge of plugging abandoned wells, the Bureau of Land Management, has openly acknowledged that it doesn’t have the financial resources to tackle the issue of plugging wells on federal land. There was no federal nationwide bond requirement to cover the cost of reclaiming wells until the 1950s, and the required value for bonds has not increased since then.
That’s right: the amount required to cover the cost of cleanup has not been increased or adjusted for inflation for nearly 70 years, so the federal amount is woefully ineffective. Bond standards of a couple thousand dollars often don’t address wells that cost tens of thousands to plug, another cause for wells to be abandoned.
Jones believes that extractive companies are harming the environment and then escaping culpability by declaring bankruptcy. “Not pointing fingers isn’t really an option in order to win this fight against climate change,” he says. Identifying the sources of harm holds polluting industries accountable for supporting solutions and provides a pathway for legislation that protects the planet, Jones says. The House Select Committee on the Climate Crisis, for example, just proposed a $2 billion remediation program for orphaned wells in June, though given the political climate, that legislation has a rocky future.
A boost or a burden?
Kirk Panasuk, a lifelong Montanan, farmer, and member of the Northern Plains Resource Council’s Oil and Gas Task Force, remembers growing up with oil wells on his grandparents’ farm. Panasuk says “once you’ve leased the land you’ve lost control.” An oil company would lease the mineral rights—not the surface land but the profitable oil below. That lease might expire, the company would leave, and another company would come in to start the process again.
Agriculture is a difficult industry, and Panasuk says what seems like “free money” at the outset can lead to problems down the road. Water systems are connected, which means that an oil leak in Montana has the potential to leach chemicals into bodies of water such as the Yellowstone River that flows into other states through the Missouri River, a river crucial to municipal, industrial, and agricultural function.
Panasuk now volunteers with the NPRC to lobby state legislators on practices that would hold resource extraction companies accountable by mandating water testing and treatment. He admits that he’s made money off of these companies by leasing mineral rights to oil producers who then sell the oil at market. Despite the environmental fallout, Panasuk believes that oil companies’ leasing of land actually “saved a lot of small farms from failure [and] bankruptcy.”
Olson of the Montana Petroleum Association says that in 2019, when oil was $60 per barrel, a company might produce 100 barrels per day and pay a royalty fee of 12.5%, which could garner a farmer $750 per day for leasing their land. Today, with prices and production down, the payoffs look different. In April, oil prices went into the negative, and in August, they’re hovering around $30 per barrel.
While an oil lease might benefit a farmer initially, Jones says that oil companies are well-versed in this practice. “The oil and gas industry takes advantage of the inequities in our agriculture system to prey upon farmers and get them to sign leases for drilling on their land,” Jones says, which can “undermine agricultural activity that’s taking place.”
In other farming communities around the country, where oil and gas companies produce natural gas through hydraulic fracturing, farmers and members of the local community often bear the brunt of water pollution. Not to mention that farming is dependent on a predictable and healthy climate, which is being threatened by resource extraction.
A foundation is formed
In early 2019, Curtis Shuck was in the northern town of Shelby, about 15 miles south of the Canadian border, meeting with farmers about agricultural transportation. More than three decades in the oil and gas industry hadn’t prepared him for what he saw—abandoned, methane-leaking, unplugged oil wells.
He walked the area with the farmers and learned how they worked around the wells, most of which had stopped producing oil decades earlier. What was left were remnant pipes strewn across the fields and a sulfuric stench like rotten eggs.
On his journey home to Bozeman, Shuck couldn’t stop thinking about what he had seen, knowing that each open well was responsible for tons of emissions. On that drive, the idea for the Well Done Foundation was born.
Just over a year after that first trip north, the Well Done Foundation plugged its first three wells and expanded beyond the Montana pilot program into dozens of other states. Shuck says that he hopes the foundation can also gather the concrete data that the government lacks, such as the number of orphaned wells and their emissions, which makes it difficult to develop solutions.
Shuck says he can acknowledge the state’s shortcomings in their cleanup efforts while building relationships with those who make regulatory decisions. The “state fund is grossly underfunded,” Shuck says, but “why should the public bear the burden of this orphaned well issue?”
The Well Done team identifies abandoned oil wells around the state, and then posts a financial bond to the state’s Oil & Gas Conservation Commission, a way for the state to track and partially fund the plugging. In doing so, the state is holding up its end of the bargain, but without this push from Well Done, it might take the state years to accomplish what the Foundation does in months.
The foundation researches individual well emissions for about nine months as well as studying the construction of a well, how deep it goes, and the materials that are required to plug it. Shuck says it’s important that the foundation does its due diligence to identify wells that have collapsed in on themselves or have an obstruction that needs to be addressed before plugging.
Then the foundation works with county commissions, private entities, and those who own the surface land to develop and execute a “plugging plan,” which so far has been funded by private or anonymous donors. The actual plugging of the well takes only a few days, and then the Foundation works to restore the surface land to its “pre-drilling condition,” which allows a farmer to seed the land and grow crops.
Shuck is adamant that the foundation’s work is not about fighting corporations, but about taking responsibility for one’s community. The foundation has built partnerships with both conservation organizations and oil and gas companies. Shuck says that abandoned wells are a “bit of a black eye to the industry,” so plugging the orphaned wells demonstrates their environmental responsibility and develops a partnership that may come in useful as the industry quickly changes.
“There are plenty of folks that want to blame Big Oil, little oil, or oil in general,” he says. But the work, to him, is not about pointing fingers. Neither the left’s demonization of fossil fuels nor the right’s push for energy independence are relevant to the work, in Shuck’s view.
In late April, the foundation successfully plugged its first well—a 96-year-old well called Big West Anderson #3 in Toole County that it had “adopted” by taking over legal responsibility from the state. The well, which hadn’t produced oil since the 1980s, had been releasing 6,600 metric tons of carbon dioxide per year. For comparison, one car on the road releases about 4.6 metric tons of carbon dioxide per year.
Just one day after the foundation plugged Big West Anderson #3, its greenhouse gas emissions were nonexistent.
Shuck says, “What’s exciting about this is that we can make an impact one well at a time.”
