Oil industry must plug old oil, gas wells

3,500 nonproducing wells will be dismantled

In an effort to boost environmental protections and the safety of offshore energy protection the Obama administration has launched plans to plug old oil and gas wells in the Gulf of Mexico.

The plans were launched on Wednesday in an effort to clean up ‘idle iron' - dried up wells and rigs that have been left since oil excavation was complete. The mandate will affect nearly 3,500 nonproducing wells and require the decommissioning of about 650 unused oil and gas production platforms.

"We have placed the industry on notice that they will be held to the highest standards of planning and operations in developing leases," said Interior Secretary Ken Salazar.

The number of redundant rigs, platforms and offshore oil and gas wells has long been a thorn in the paw of environmental groups and industry analysts, who have been highlighting the problem of ‘idle iron' in an effort to get a resolution.

Since the Macondo well leak, and subsequent spill of 206 million gallons of oil into the Gulf of Mexico, fresh scrutiny has cast on well safety and have spurred concerns that the aging infrastructure poses environmental risks, especially during hurricanes
Michael Bromwich, the director of the new Bureau of Ocean Energy Management, Regulation and Enforcement, said the rule responds to that threat.

"This initiative is the product of careful thought and analysis," he said, "and requires that these wells, platforms and pipelines are plugged and dismantled correctly and in a timely manner to substantially reduce such hazards."

The previous rule required companies to dismantle used wells within one year after their individual offshore oil and gas leases expire.

But the "notice to lessees" issued by the Interior Department Wednesday would require the decommissioning of any well that has been idle for the past five years, along with any associated platforms and pipelines - even if they are part of an active offshore lease.

Under the rule, current offshore lease owners will have four months to outline their plans for breaking down and securing the facilities.

"These structures are not producing resources or creating jobs by just sitting there," and the risk of leaking, abandoned facilities "is something we've overlooked long enough," Grijalva said. "This announcement should put thousands of laborers back to work in short order cleaning up the Gulf," said Rep. Raul Grijalva, D-Ariz., who had pushed for such a cleanup of offshore drilling debris, said the rule will benefit the environment and the economy.

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