Oil and Gas at Your Door? (2005 Edition) - Earthworks

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Legal and Regulatory Issues REGULATIONS AND SURFACE OWNER PROTECTIONS Bankrupt Companies Walk Away from Oil Wells in Texas In 1996, the Ginco Operating Company walked away from more than 500 wells in Texas, when the company filed for bankruptcy. At that time, the state held less than four thousand dollars in financial assurance from the company. The maximum the state could have required was a $250,000 blanket bond. By 1999, the agency responsible for the orphan sites, the Texas Railroad Commission (TRC), had spent more than $500,000 plugging and reclaiming some of Ginco’s wells, with hundreds more yet to be plugged. In Texas, as of 2002, the state has 17,000 orphan wells to plug at cost of $4,500 per well. The state does not collect enough money in bonds to cover the cost of plugging the wells if the companies walk away. The Ginco case was by no means an isolated one. As of 2002, the state has 17,000 orphan wells to plug, at a cost that the state estimates at $4,500 per well. 418 The reality is that the state does not collect enough money in bonds and other forms of financial security to cover the cost of plugging wells if companies walk away. In 1997 alone, the TRC Oil Field Cleanup Program spent $12.7 million to plug and reclaim wells, and was reimbursed only $82,691 by operators - about 65 cents for every $100 spent, according to state records. 419 An article in the San Antonio Express newspaper relates the story of a landowner affected by the Ginco bankruptcy. 420 By the time Ginco bought the wells on Milton Brehm’s property, most of the oil had been removed. According to Brehm, the wells “just weren’t producing that much no more and they didn’t take care of them. . . They let them run down.” Before Ginco declared bankruptcy, its workers removed the pump jacks and ripped out hundreds of feet of tubing. Eventually, a slow trickle of oil began flowing out of the well and onto the ground. According to Brehm, the oil “would run into the creeks and that would worry the Railroad Commission.” The Texas Railroad Commission, the state agency responsible for the wells, plugged the wells in 1996. Even though the wells are plugged, Brehm is left with areas in his wheat fields where nothing will grow. These areas are often referred to as “kill zones,” and are found around many leaking wells. As well, a tank battery, a number of 55-gallon drums and a large 200-barrel storage tank remain on his property. “Why is the landowner responsible for all this stuff after they run off and leave it?” Brehm asked. Note: As of 1999, the TRC has been taking steps toward changing the bonding requirements for the oil and gas industry. A backgrounder on the rationale for the changes that have been made can be found on the Texas Railroad Commission web site. http:/www.rrc.state.tx.us/divisions/og/p5overview.html II-20
Other Protections Statutes and regulations provide other stipulations that may serve to protect a surface owner’s interests. Below are just a few examples of other surface owner protection provisions. Again, to find out what other provisions might be available in your state, consult with individuals, organizations or attorney’s who are familiar with your state’s laws. REGULATIONS AND SURFACE OWNER PROTECTIONS FIGURE II-9. PROVISIONS THAT PROVIDE ADDITIONAL PROTECTIONS 421 Filing Grievances and Complaints There are a few options for surface owners who believe their surface rights have been ignored. If a specific law has been broken (e.g., a company fails to notify you of their drilling activities, even though there is a law that requires them to do so), the surface owner may file a complaint with the appropriate government agency. It is not always clear which state agency deals with complaints. A good place to start is with the state’s Oil and Gas Commission (if the state has one). Also, consult the list in Chapter V for some of the state agencies involved in oil and gas regulation. If you don’t have the right agency or department, a staff person with one of the agencies should be able to direct you to the proper official. • In Colorado, complaints may be filed with the Colorado Oil and Gas Conservation Commission (COGCC). They have a toll-free complaint line: 1-888-235-1101. If the COGCC enforcement process does not adequately address a surface owner or tenant complaint, an application can be filed for a Commission hearing. • In the case of Montana, the Board of Oil and Gas and the Department of Environmental Quality are the state agencies responsible for permitting, defining reclamation terms, and enforcement in the case of non-compliance. These agencies should be contacted when companies are not living up to their responsibilities. • The U.S. Bureau of Land Management and U.S. Environmental Projection Agency are the federal agencies most involved with oil and gas regulations and enforcement for federal minerals. II-21
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Oil and Gas at Your Door? A Landown
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About the Oil & Gas Accountability
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Table of Contents Introduction What
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Chapter III, Tips for Landowners Wh
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Introduction Oil and gas developmen
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For the oil we need, unless we choo
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With the recent boom in extraction
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Do you own the minerals associated
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Chapter I Oil and Gas Development a
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TERMS AND CONCEPTS When natural gas
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STAGES OF OIL & GAS DEVELOPMENT In
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STAGES OF OIL & GAS DEVELOPMENT •
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STAGES OF OIL & GAS DEVELOPMENT FIG
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STAGES OF OIL & GAS DEVELOPMENT Sur
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STAGES OF OIL & GAS DEVELOPMENT pan
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STAGES OF OIL & GAS DEVELOPMENT Nex
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STAGES OF OIL & GAS DEVELOPMENT One
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STAGES OF OIL & GAS DEVELOPMENT Gat
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STAGES OF OIL & GAS DEVELOPMENT Pro
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STAGES OF OIL & GAS DEVELOPMENT PRO
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STAGES OF OIL & GAS DEVELOPMENT pro
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STAGES OF OIL & GAS DEVELOPMENT Plu
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NON CONVENTIONAL OIL AND GAS FIGURE
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NON CONVENTIONAL OIL AND GAS COALBE
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NON CONVENTIONAL OIL AND GAS Cavita
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NON CONVENTIONAL OIL AND GAS to pro
Page 57 and 58: IMPACTS ASSOCIATED WITH OIL AND GAS
Page 79 and 80: ALTERNATIVE TECHNOLOGIES AND PRACTI
Page 81 and 82: ALTERNATIVE TECHNOLOGIES AND PRACTI
Page 83 and 84: STAGES OF OIL & GAS DEVELOPMENT The
Page 85 and 86: STAGES OF OIL & GAS DEVELOPMENT to
Page 87 and 88: STAGES OF OIL & GAS DEVELOPMENT FIG
Page 89 and 90: Chapter II Legal and Regulatory Iss
Page 91 and 92: Who Owns the Minerals Beneath Your
Page 93 and 94: WHO OWNS THE MINERALS BENEATH YOUR
Page 95 and 96: MINERAL VS SURFACE RIGHTS er, can b
Page 97 and 98: MINERAL VS SURFACE RIGHTS • In th
Page 99 and 100: REGULATIONS AND SURFACE OWNER PROTE
Page 101 and 102: Exploration Before a company can en
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Page 113 and 114: face owner to participate in this o
Page 115 and 116: Chapter III Tips for Landowners WHA
Page 117 and 118: SURFACE USE AGREEMENTS Surface Use
Page 119 and 120: SURFACE USE AGREEMENTS Powder River
Page 121 and 122: SURFACE USE AGREEMENTS operations t
Page 123 and 124: SURFACE USE AGREEMENTS ment payment
Page 125 and 126: SURFACE USE AGREEMENTS Reported Com
Page 127 and 128: SURFACE USE AGREEMENTS Examples of
Page 129 and 130: SURFACE USE AGREEMENTS ed by this A
Page 131 and 132: SURFACE USE AGREEMENTS 12. Dry Hole
Page 133 and 134: SURFACE USE AGREEMENTS 25. Firearms
Page 135 and 136: SURFACE USE AGREEMENTS in whole or
Page 137 and 138: LEASING Annual Reclamation Requirem
Page 139 and 140: LEASING • Within the mineral leas
Page 141 and 142: LEASING • Requiring landowner app
Page 143 and 144: OTHER ACTIVITIES TO CONSIDER Push f
Page 145 and 146: OTHER ACTIVITIES TO CONSIDER analys
Page 147 and 148: FILE LAWSUITS amendment also requir
Page 149 and 150: FILE LAWSUITS Landowners are Winnin
Page 151 and 152: Chapter IV Landowner Stories As has
Page 153 and 154: 1. CBM DESTROYS RETIREMENT DREAM By
Page 155 and 156: has never been a loss of vegetation
Page 157 and 158: Board came. They accused her of pou
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4. COUNTY OFFICIALS SAY RESIDENTS I
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First, why we did not sign a surfac
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Here is part of a description of on
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cases the agents called and visited
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10. ONE RANCH FAMILY’S STRUGGLE W
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shrubs are now roads, drill pads or
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County and the drilling company to
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opment in their backyards. This is
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After reading Colborn’s memo, I t
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17. WYOMING LANDOWNERS FACE CONDEMN
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involved in a private property issu
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Sources of Information Resources on
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Sources of Information Petroleum Te
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Sources of Information East of Huaj
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Sources of Information NONPROFIT OR
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Sources of Information Native Actio
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Sources of Information STATE REGULA
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Glossary of Oil and Gas Terms A aba
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chain of title Recorded transfers (
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egress The act of getting out or le
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H heavy oil Hydrocarbons composed o
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mineral estate The ownership of min
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petroleum A substance occurring nat
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einjection The introduction of prod
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sour gas Natural gas containing sig
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venting release of gases to atmosph
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Endnotes 1 Thomas, K. 2001. Produce
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57 U.S. EPA. October, 2000. p. 38.
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121 Griffiths, Mary and Marr-Laing,
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187 Kuuskraa, Vello A. (Advanced Re
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236 Otsego County Planning Commissi
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287 USGS. 1997. See endnote 284. 28
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354 Trujillo, Shirena. August 27, 2
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Oklahoma: Oklahoma Statutes. 52-4-3
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Financial Assurance - Colorado: Col
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470 Scheider, Keith. “Ax the $Bil
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Index I-31, I-33, I-60, I-63 conven
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Index mitigation I-31, IV-20 monito
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Index I-52, I-65, III-10 treatment
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