C&E Selects Contractors for Federal Orphaned Well Funding

BATON ROUGE – The Louisiana Department of Conservation and Energy (C&E) Secretary Dustin Davidson has announced the selection of two contractors to carry out plugging and cleanup of orphaned well sites in North Louisiana, utilizing at least $30 million in federal grant funding.

C&E has selected Garner Environmental Services, Inc. for the project focused primarily in the Monroe District, and Lemoine Disaster Recovery, LLC for the project focused primarily in the Shreveport District. Contractors were selected following a competitive Request for Qualification (RFQ) process to determine which companies applying for the work scored highest before a C&E-appointed review committee. The work will target areas of North Louisiana, where well populations and numbers of orphaned well sites are most dense – accounting for more than 4,200 of the approximately 6,400 orphaned wells in the state.

Orphaned well sites in Louisiana are wells designated by C&E as not having a responsive operator, either due to the operator going out of business or being unable or unwilling to maintain their sites in compliance with state regulations. Louisiana’s orphaned well count accelerated in recent years due to downturns in the prices of oil and gas that put financial strains on oil and gas companies and their ability to maintain their sites or their businesses.

“One of the biggest problems this administration has inherited is the large and growing population of orphaned wells, primarily due to financial security and bonding policies that were at best inadequate where they are not nonexistent” Davidson said. “We’ve taken steps such as creation of the Natural Resources Trust Authority (NRTA) to better manage the potential number and expense of future orphaned wells, but in the interim, we welcome the boost the funding provides in dealing with the backlog.”

The federal funding is in addition to, and independent from, the funding the state already receives from oil and gas producer fees to plug orphaned well sites through the state Oilfield Site Restoration (OSR) Program. OSR receives $12 million to $15 million a year in funding currently.

Davidson said that splitting the federal funding in the two North Louisiana districts allows C&E to focus the state OSR funding in South Louisiana, giving each of the three districts roughly equal resources. South Louisiana wells, while fewer, tend to be more expensive to plug because of greater depths and pressures.

The two contractors that C&E has selected are now in the process of designing packages of work to address the orphaned wells C&E has listed in the designated areas, each to address at least $15 million worth of site work, to be reviewed and approved by the agency.

The work is to be done in the next three to five years, depending on issues such as weather and availability of equipment and crews. C&E is emphasizing the hiring of in-state companies as sub-contractors.

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