Louisiana finalizes rules to stem the tide of orphan wells

The Louisiana Department of Natural Resources Office of Conservation has finalized stronger rules in an effort to reduce the state’s orphan well problem. The rule stands to improve the management of the 17,000 future utility, or non-productive oil and gas wells by encouraging their proper closure, an action that will create jobs, raise property values across the state and facilitate new clean energy projects, all while reducing emissions and protecting public health and safety. 

The Future Utility Rule includes incentives for operators to plug their non-productive wells, increases fees once wells have been non-productive for five years or more and establishes more control over extending exemptions for plugging in perpetuity that have historically allowed wells to idle for forty years or more. The fees collected can be used by the Oilfield Site Restoration Program to continue diligent efforts to plug orphan wells, leveraging additional benefits to taxpayers, landowners and communities across the state.

“The jobs and business opportunities created by this rule tap the existing skill sets of Louisiana’s working people,” said Liz Russell, Louisiana State Director at Environmental Defense Fund. “This action will grow our economy while addressing the need to remediate underutilized legacy oil and gas infrastructure.”

The rule is an essential step that Louisiana is making at a critical time before costs for taxpayers balloon out of control. While the state is receiving hundreds of millions of dollars from the federal government to close the orphan wells already in existence, this regulatory update will help stop the creation of tens of thousands of new ones. With this strengthened oversight, Louisiana can work to break the cycle of idle wells becoming orphan wells.

Once wells have been in future utility status for three years or more, only 20 percent of them ever return to service. Of those that do, over 80 percent of their lifetime production will have already happened prior to entering future utility status, speaking to the need to ensure that wells in this program truly have future utility. Additionally, these improved regulations help make Louisiana eligible for up to $70 million more in federal funding to help tackle the statewide challenge of orphan wells, providing benefits to constituents across Louisiana.