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Feds aren't inspecting 4 in 10 higher-risk wells

Tuesday - 6/17/2014, 5:32am  ET

This photo taken June 9, 2014 shows a horse named Primo grazing in front of the home of local resident Joann Aramillo, with an oil and gas rig on a well pad visible a few hundred yards away, top right, in New Castle, a small farming and ranching settlement on the Western Slope of the Rockies, in Colo. Four in 10 new oil and gas wells near national forests and fragile watersheds or otherwise identified as higher pollution risks escape federal inspection, unchecked by an agency struggling to keep pace with America's drilling boom, according to an Associated Press review that shows wide state-by-state disparities in safety checks. (AP Photo/Brennan Linsley)

HOPE YEN
Associated Press

NEW CASTLE, Colo. (AP) -- Four in 10 new oil and gas wells near national forests and fragile watersheds or otherwise identified as higher pollution risks escape federal inspection, unchecked by an agency struggling to keep pace with America's drilling boom, according to an Associated Press review that shows wide state-by-state disparities in safety checks.

Roughly half or more of wells on federal and Indian lands weren't checked in Colorado, Utah and Wyoming, despite potential harm that has led to efforts in some communities to ban new drilling.

In New Castle, a tiny Colorado River valley community, homeowners expressed chagrin at the large number of uninspected wells, many on federal land, that dot the steep hillsides and rocky landscape. Like elsewhere in the West, water is a precious commodity in this Colorado town, and some residents worry about the potential health hazards of any leaks from wells and drilling.

"Nobody wants to live by an oil rig. We surely didn't want to," said Joann Jaramillo, 54.

About 250 yards up the hill from Jaramillo's home, on land that was a dormant gravel pit when she bought the house eight years ago, is an active drilling operation that operates every day from 7 a.m. until sometimes 10:30 p.m. Jaramillo said the drilling began about three years ago.

Even if the wells were inspected, she questioned whether that would ensure their safety. She said many view the oil and gas industry as self-policing and nontransparent.

"Who are they going to report to?" she asked.

Government data obtained by the AP point to the Bureau of Land Management as so overwhelmed by a boom in a new drilling technique known as hydraulic fracturing, or fracking, that it has been unable to keep up with inspections of some of the highest priority wells. That's an agency designation based on a greater need to protect against possible water contamination and other environmental and safety issues.

Factors also include whether the well is near a high-pressure formation or whether the drill operator lacks a clear track record of service.

Sen. Edward Markey, D-Mass., a member of the Senate Environment and Public Works Committee, on Monday said he will press Interior Secretary Sally Jewell to explain what the department will do to increase well inspections in light of the AP report.

"The fines Interior Department inspectors can levy on oil and gas companies who violate drilling safety requirements amount to a slap on the wrist -- they are nowhere near a sufficient financial deterrent to ensure that companies put safety ahead of speed. Now there is increasing evidence that potentially dangerous wells go uninspected altogether," he said. "We need to ensure that the oil industry is paying its fair share to drill on public lands."

BLM's deputy director, Linda Lance, said the current rate of inspections "is simply not acceptable to us."

"No one would have predicted the incredible boom of drilling on federal lands, and the number of wells we've been asked to process," she said. Since fracking reached a height in 2009, about 90 percent of new wells on federal land are drilled by the process, which involves pumping huge volumes of water, sand and chemicals underground.

The agency oversees 100,000 oil and gas wells on public lands, 3,486 of which received the high priority designation.

According to BLM records for fiscal years 2009 to 2012, 1,400 of those high priority wells, spread across 13 states, were not federally inspected. Wyoming had the most, 632, or 45 percent. South Dakota had 1 out of 2 wells uninspected, and Pennsylvania had 1 out of 6.

All the higher-risk wells were inspected in six states -- Alabama, Michigan, Mississippi, New York, Ohio and Texas.

Many more wells are located on private lands, where state officials take the lead in ensuring they comply with environmental laws, with mixed results. Nationwide, there were nearly 500,000 producing gas wells in 2012, according to Energy Information Administration data. More than 1,800 new wells were being drilled in March alone.

Dennis Willis, a former BLM field officer in Price, Utah, says he routinely provided input on oil leasing and drilling decisions on federal land before his retirement in 2009. He described a situation of chronic underfunding dating to at least the early 2000s, when BLM management made clear that issuing new permits would be a priority over other tasks, according to a 2002 memorandum from supervisors in Utah to field officers. At the time, fracking was becoming more widely used.

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