BEFORE THE OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
IN THE MATTER OF EXPENDITURES FROM THE OIL AND GAS ) CAUSE NO. 1E
CONSERVATION AND ENVIRONMENTAL RESPONSE FUND FOR )
THE COLORADO OIL AND GAS CONSERVATION COMMISSION ) ORDER NO. 1E-9
REPORT OF THE COMMISSION
The Commission Finds as follows:
1. The Colorado Oil and Gas Conservation Commission’s (“COGCC”) annual Plugging and Well Reclamation (“PAWR”) line item budget for fiscal year ending June 30, 2011 has nearly been exhausted. Including change orders, a total of $104,210.30 was encumbered for the earthwork and reclamation phase of the De Beque Orphans Plugging and Abandonment Project (“DOPAP”). Including change orders currently being processed for completed work, the total amount to be encumbered for the plugging and abandonment phase of the DOPAP will be $115,378.25. Both phases of the DOPAP project will result in a total encumbered amount of $219,588.55. The annual PAWR budget is $220,000.00. Findings 2 through 10 below describe remaining work required to plug and abandon two (2) wells included in the DOPAP, for which complications developed during the planned scope of work. Both wells are associated with landowner complaints, and COGCC Staff recommend that the work be completed during the current fiscal year ending June 30, 2011.
2. Two orphaned wells in northwest Colorado are leaking fluids to surface. COGCC Staff propose to complete plugging and abandonment of these wells to mitigate current and ongoing threats to the environment. Existing conditions and proposed actions for the Buckeye #1 Well are described below in Finding No. 3 through Finding No. 6. Existing conditions and proposed actions for the DB Orphan Pasture #1 Well are described below in Finding No. 7 through Finding No. 10.
3. The Buckeye #1 Well is located in the NE¼ of the SW¼ of Section 27, Township 8 South, Range 97 West, 6th P.M., Mesa County, Colorado. COGCC has no historical records for this well. COGCC Staff have confirmed that the well was drilled prior to establishment of the COGCC in the 1950’s.
4. A consultant contacted COGCC Staff on behalf of the landowner in February 2009 to inform COGCC Staff that the Buckeye #1 Well was leaking water and gas and had been leaking water and gas for many years. At that time, COGCC Staff added the Buckeye #1 Well to the PAWR project list.
5. COGCC Staff commenced plugging and abandonment work using PAWR funds on three other nearby gas wells in November 2010. When COGCC staff moved onto the Buckeye #1 location, COGCC’s contractor began excavation where bubbling water and gas was obvious at ground level. Based on COGCC Staff’s observations during the excavation work, it appeared that the original gas well operator either removed all casing that was used in the construction of the well or substantial corrosion had occurred to the point that the casing could no longer be located. The total depth of the excavation was approximately 13 feet when the work was suspended. A temporary construction fence was erected to limit access to the open excavation. Because of the unforeseen complexity and the increased cost associated with plugging and abandoning the Buckeye #1 Well, COGCC staff decided to resume work on the three other PAWR plugging and abandonment projects that were already underway.
6. COGCC Staff propose to drive conductor pipe into the ground over the obvious leaking area of the Buckeye #1 Well in an attempt to consolidate the leak to within the conductor casing. Soils will be backfilled around the conductor pipe to establish a stable platform for the workover rig. The conductor pipe will then be used to attempt to re-enter the original wellbore, clean out the well to its total depth, and cement the well from total depth to surface. The estimated cost to re-enter and plug the Buckeye #1 Well is $90,000.
7. The DB Orphan Pasture #1 Well is located in the NW¼ of the NE¼ of Section 28, Township 8 South, Range 97 West, 6th P.M., Mesa County, Colorado. COGCC has no historical records for this well. COGCC Staff suspect that the well may have been drilled prior to establishment of the COGCC in the 1950’s.
8. A consultant contacted COGCC Staff on behalf of the landowner in July 2008 to inform COGCC Staff that the DB Orphan Pasture #1 Well was leaking gas to the atmosphere and had been leaking gas for many years. At that time, COGCC Staff added the DB Orphan Pasture #1 Well to the PAWR project list.
9. In November 2010, COGCC’s contractor re-entered the DB Orphan Pasture #1 Well, pumped mud in an attempt to kill the well’s gas flow, and filled the well from 550 feet to surface with cement. While a majority of the gas flow had been eliminated, on November 17, 2010 COGCC Staff discovered that a channel had developed in the cement, and the channel is still allowing some gas to leak to the surface.
10. COGCC Staff propose to re-enter the DB Orphan Pasture #1 Well, drill out the existing cement, continue drilling out the well to its total depth, circulate a heavy mud sufficient to kill the gas flow, and pump cement in the well with additives that will decrease the potential for channeling. The estimated cost to re-enter and re-plug the DB Orphan Pasture #1 Well is $90,000.
NOW, THEREFORE IT IS ORDERED, that in accordance with §34-60-124(7), C.R.S., the Colorado Oil and Gas Conservation Commission hereby authorizes the expenditure of One Hundred Eighty Thousand Dollars ($180,000.00) from the One Million Five Hundred Thousand Dollars ($1,500,000.00) Emergency Response line item for the investigation of significant adverse impacts to public health, safety, welfare, and the environment that may be associated with the conduct of oil and gas operations.
IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.
IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend, or repeal any and/or all of the above orders.
IT IS FURTHER ORDERED, that under the State Administrative Procedure Act the Commission considers this order to be final agency action for purposes of judicial review within thirty (30) days after the date this order is mailed by the Commission.
IT IS FURTHER ORDERED, that an application for reconsideration by the Commission of this order is not required prior to the filing for judicial review.
ENTERED this day of November, 2010, as of November 29, 2010
OIL AND GAS CONSERVATION COMMISSION
OF THE STATE OF COLORADO
Carol Harmon, Secretary
Dated at Suite 801
1120 Lincoln St.
Denver, Colorado 80203
November 29, 2010