Stimulus funding related to the coronavirus pandemic is kickstarting an effort to plug abandoned oil and gas wells in North Dakota and return the land to agricultural use.
About 400 well sites in western and north-central North Dakota will be restored through a program funded primarily with $66 million of the $1.25 billion the state received in CARES Act funding.
Using coronavirus relief aid to plug abandoned oil wells is questionable. The responsibility for restoring abandoned well sites should lie with the companies that own them.
But in many cases, the wells were drilled in the 1950s, '60s and '70s, before North Dakota had rules to ensure the sites would eventually be cleaned up. Often the neglected oil wells and saltwater disposal sites are transferred from company to company, with owners unwilling or unable to pay for their upkeep or restoration.
In addition to the stimulus funding, the state is seizing bonds from five companies due to past complaints about abandoned wells. Those dollars will also go toward the cleanup effort, which is more appropriate than a taxpayer bailout.
While the source of funding will continue to face criticism, the well plugging program will be beneficial to North Dakota. It will stimulate the economy by keeping about 1,000 oil workers employed through 2020. It is projected to return about 2,000 acres of oil sites, gravel well pads and roads to farmland.
Benefits to the environment include reducing emissions and spills. Abandoned wells are known to cause a significant source of emissions, including methane, a potent greenhouse gas that contributes to climate change. Equipment failures cause spills, which can have devastating consequences for landowners.
There is no quick fix for restoring the land, particularly sites that have been contaminated by brine, a waste byproduct of oil production.
Director of Mineral Resources Lynn Helms estimates that 40% of the sites will require longer-term remediation because of extensive contamination. The CARES Act money must be spent by the end of 2020. Even if the state gets permission to prepay companies to continue work in 2021, it’s clear that remediation will be needed long after this program is complete.
The stimulus funding is a start, but restoring land used for oil and gas production needs to be part of a long-term commitment by the state. This includes sufficient bonding requirements for companies, stricter oversight when a well is transferred to a new owner and adequate personnel so regulators can inspect sites and enforce existing regulations.
North Dakota ought to take additional steps to make sure it doesn’t require taxpayer funds to clean up after the oil industry in the future.
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