November 2020, Vol. 247, No. 11


Bakken Restart: Back to Basics with Idle Wells

By Richard Nemec, Contributing Editor          

Since the coronavirus pandemic shut the U.S. economy, oil and natural gas field activity slowed perceptively with idle wells outnumbering new wells being drilled. Prices and production plummeted. In California, state officials in early September said in the first half of 2020 well abandonments were twice the number of new wells. 

Among the jobs hit hardest in the industry was that of skilled pipeline welder.

In the first half of this year, California’s largest producer, California Resources Corp. (CRC), saw both the number of drilled wells and overall production decrease.

An independent former part of Occidental Petroleum Corp., until a spinoff six years ago, CRC accumulated a growing backlog of drilling permits in the first half of 2020, nearly six times as many as during the same period in 2019. There were 73 wells drilled the first six months this year, compared to 99 for the same period last year.

When asked about operations in the pandemic, CRC Vice President Margita Thompson indicated that the company’s growing permit inventory is an offshoot of ongoing work CRC is doing with a set of joint venture partners that were pieced together in the last three years.

“Year-over-year, the number of drilled wells and our production have both decreased, independent of our drilling permit inventory,” Thompson said. “Californians need an increasing amount of energy, and we can produce more locally. Under the state’s current policies, any decrease in local production is replaced fully by increasing imports from other countries that do not share California’s values. These state preferences for imported energy delegate environmental leadership to other countries that do not apply California’s strict safety, labor, human rights and environmental standards.”

Nationally, the Interstate Oil and Gas Compact Commission (IOGCC) has studied idle and orphan oil and gas wells for decades, and since 1992 it has published periodic reports, with its most recent ones in 2019-20. The latest includes data from 30 states and five Canadian provinces. Approved idle wells totaled 294,734, or 15.6% of the total number of documented wells that have been drilled and not plugged.

So-called orphan wells for which the operator is unknown or insolvent are documented by states and provinces and prioritized for plugging. Most states have zero to 100 orphan wells, although one reported 13,266, while provinces reported a total of 3,818. In 2018 the states and provinces combined plugged 3,356 orphan wells.

According to IOGCC’s surveys, most states and provinces have established funds for plugging orphan wells with the money coming from a combination of taxes, fees or other assessments on the oil/gas sector. Sixteen jurisdictions have annual authorized expenditure targets, and 21 have access to funds for emergency remedial actions. Single well bond requirements vary from $1,500 to $500,000 per well. 

“Through the decades, states and provinces have made considerable progress in plugging orphan wells and reducing the likelihood of additional wells becoming orphaned,” IOGCC said in its 2019 report.

In a supplemental report released this year, IOGCC notes that a “large majority” of documented orphan wells occur on private lands with far fewer numbers on state and federal/tribal lands. While all states cover wells on private and state lands, not all of them do the same on federal/tribal lands, according to IOGCC. In 2018 and 2019, based on 26 and 23 states, respectively, 92% of orphan wells were on private lands, 5% on state land and 3% on federal/tribal property. In the 24 states that provided data for both years, total orphan wells numbered 4,879, or a 13% increase year-over-year, primarily due to a big jump in California (16 in 2018 to 4,844 in 2019).

In August, Canada’s government in the resource-rich province of Alberta launched a long-range campaign to make oil and gas companies pay for cleaning up a growing backlog of 96,969 depleted and inactive wells, representing 21% of Alberta’s 456,000 licensed wells over the past 106 years. 

The provincial energy minister imposed a stiffened polluter-pay policy requiring producers to develop five-year cleanup plans and act on them under supervision by the Alberta Energy Regulator (AER). The policy grants landowners the right to nominate discarded wells on their property for prompt cleanups. Oil and gas firms would have to justify postponing action on the requests.

Under a totally different system than faced by U.S. producers, Alberta, at times, has a conflicting split-title property regime, and about four-fifths of the province oil/gas resources are Crown or provincial government-owned. Industry access to leased drilling targets has priority over surface rights owners, who have had little or no control over wells and some cleanups.


Back in the United States in the prolific Bakken Shale play in North Dakota, an industry-state government initiative under a statewide task force sketched out responses to the economic fallout from the coronavirus pandemic. After a decade of steady oil/gas production growth, oilfield activity was grinding to a halt and thousands of oilfield workers were laid off in the first half of 2020. At times, oil prices reached unimaginable low prices, according to Lynn Helms, director of the state Department of Mineral Resources (DMR).

Over a three-week period in August, Helms distributed a three-part series on how North Dakota intended to implement recommendations from the Bakken Restart Task Force to respond to the unemployed and the many shut-in wells dotting the northern prairie. DMR’s oil/gas division unveiled a $66 million job-creating project for plugging and reclaiming current abandoned well sites. More than 1,000 jobs were created – 600 oil and gas service jobs and 300-500 additional jobs managing reclamation of sites.

“When fully and properly reclaimed, the wells and sites that have already been confiscated as part of the program will return more than 2,000 acres to farming, grazing or personal use for surface owners in the state,” Helms said. “COVID-19 has resulted in oil companies having less financial capacity to dedicate to well plugging and has made it nearly impossible for them to get new well bonds in place, putting at risk an increasing number of abandoned and orphaned wells. Any well out of compliance is troubling to the oil and gas division and our citizens, especially wells categorized as either abandoned or orphaned.”

Abandoned wells have long been a part of the more-than-a-century-old American oil and gas industry, but it is only in the last few decades that both the industry and state regulators have become more thorough in mitigating and remediating these retired well sites. 

The process for addressing this part of the nation’s robust petroleum industry takes on added importance when production, royalties and revenues are at new levels of abundance. And when a pandemic like COVID-19 is thrown in the mix, oil companies with reduced financial wherewithal make it difficult to get sufficient well bonds in place, putting at risk more and more abandoned and orphaned wells.

For North Dakota’s Helms, any well out of compliance is a concern – for the state and its citizens – and especially for wells designated as abandoned or orphaned. In North Dakota, the nation’s second largest oil producer, exceeded only by Texas, a well becomes “abandoned” when all of the production equipment is removed, or it simply fails to produce any more oil or gas. 

“If a well reaches this status, it must be promptly returned to production in paying quantities approved by the state for ‘temporarily abandoned’ status, or it must be plugged and reclaimed within six months,” Helms explains. Failure to meet one of these conditions would require that a given well be placed immediately on a single-well bond in the amount of the estimated cost of plugging and reclamation.

An idle oil pump jack has become a common sight.

For orphan wells in North Dakota, the plugging and reclamation is paid out of a special state-maintained fund made up of fees, forfeiture of bonds, and fines collected from oil/gas operators. Helms maintains that orphan wells historically have not been an issue in North Dakota. 

IOGCC’s supplemental report this year lists zero orphan wells for the state in both 2018 and 2019. That was the case, at least, until the global industry and the United States were hit with the double whammy of oil prices and demand cratering and the coronavirus pandemic blanketing the nation since February.

“These events cumulatively created never-seen-before negative oil prices,” Helms said.

In North Dakota, abandoned wells were very manageable when oil prices were above $50/bbl WTI because most operators had additional capital to finance plans for bringing wells into compliance. Prices so far in 2020 have put many of these wells at risk for becoming orphaned, according to state officials. 

“Only a small number of current abandoned wells in the state would be capable of producing in the foreseeable future at 2020 oil prices, leaving a majority to be plugged and reclaimed,” Helms concedes, adding that 70% of North Dakota’s wells needing plugging/reclamation are non-Bakken conventional wells drilled prior to 1985.

Underpinning North Dakota’s efforts are both federal and state funding along with the Bakken Restart Task Force collaboration among various state agencies and related experts. The federal Coronavirus Aid, Relief, and Economic Security Act (CARES) provided $66 million, and the state Abandoned Well Plugging and Site Restoration Fund kicked in another $10 million. 

The Bakken Restart Task Force submitted two requests for CARES funding. The plugging/reclamation CARES funds are a small part of federal assistance to the state in the wake of the pandemic because there was also $1.9 billion for the state’s small businesses and $200 million for job services.

In a month’s time between March and April this year, North Dakota’s unemployment rate went from 2.1% to 9.4% as more than 10,000 oil/gas workers filed for unemployment by July. The jobs hit the hardest were in the service companies, roustabout crews, truck drivers, wireline and rig crews, tool hands, cementers, rental companies, skilled pipeline welders and other highly trained workers, according to Helms. Oil and gas workers often will go elsewhere to find jobs, so the state sought a way to help keep many of them in North Dakota during the down period.

Helms used blog presentations to outline the finer points of plugging and reclamation work for North Dakota’s citizens and oilfield workers alike. There is no one-size-fits-all for well plugging as the geology, topography and the wells are all different, he stressed. Generally, plugging operations, averaging $75,000 per well, take three to five days and crews of 15-20 workers, meaning that North Dakota employed up to 600 skilled oilfield workers to take on plugging 200-400 wells.

Properly plugged wells in North Dakota must have a detailed procedure submitted and approved by the state oil/gas division, which is part of Helms’ minerals department. The state division reviews the plans for each well, examining the depth of the wellbore, casing string data, production zones, perforation depths, cement bond logs, depths of the specific formations to be plugged and any other known wellbore issues for a specific well. 

Helms emphasizes that state procedures “not only isolate oil and gas zones, but more importantly protect our freshwater aquifers and resources.”

Before this Bakken Restart effort, North Dakota had 11,224 plugged wells that have been retired for a combination of reasons, including age, economics, maintenance, environmental and safety risks. And Helms stresses that the process is complicated, equaling the complexity of drilling a new well because the crews are dealing, for the most part, with older subsurface features and equipment. 

Some of the wells are 70 years old, and 70% of them were drilled prior to 1985, which means the plugging crews have to make sure there is enough cement behind the casing.

All the way up until the 1970s, operators weren’t as careful as they are today,” Helms said. “Back in the ’40s, ’50s and ’60s they didn’t run as much casing to protect drinking water.” 

With inactive wells in mid-summer numbering more than 3,500, Helms said the state confiscated 392 of those wells for the plugging/reclamation program. In mid-September, he was hopeful about completing plugging in another week and beginning reclamation before Oct. 1 on the first 52 sites out of the larger batch.

Reclamation is the final restoration, and it is much more complicated than the spreading of topsoil and some seed. As Helms said in his podcast, “It does not happen quickly or naturally on its own.” There is a precise regulatory process customized to each site, and it takes at least six months, and often includes follow-up for months and years.

Proper bonding and planning are reviewed by state oil and gas professionals. “Reclamation requires an understanding of the site’s overall size, geography, land use, past/existing contamination, access roads and any remaining assets tied to the plugged well,” Helms said.

A reclamation plan is then submitted to the state for approval prior to the preliminary work, which includes aerial imagery of the site. Drones are used and the land is scanned for contamination. Once the well has been capped 4 feet (1.22 meters) below grade, all the surface land is surveyed and scrapped.

Sites are checked for soil quality and indicators of additional contamination. “Technologically Enhanced Naturally Occurring Radioactive Material” (TNORM) has to be specially handled and taken to a special landfill in east Montana, Idaho or Colorado. After all solid material is removed, the site is surveyed for contamination. Once that is cleared, the land is put back to its original topography and contours, planted and watched (aerially via drones) for one to two years. If contamination is serious, the process is longer, and the state environmental quality experts are brought in.

Thirty to 40% of the 400 wells in the program have records of multiple spills, so many of the wells may not be finished with reclamation this year, according to Helms. 

“We’ve learned a lot over the past 40 to 60 years; the first oil/gas reclamation act was passed in 1981,” he notes. “The endgame is to make the oil/gas site disappear.”

The entire process is documented and photographed from plugging through reclamation. “Many are small sites, shallow wells all developed in the 1950s and 1960s; ones from 1980 onward are very different.” Early in the plugging, he found that more workers were required, so by the end of this project it may take up to 2,000 workers, rather than the originally estimated 1,000.

In late September, North Dakota’s prolific Bakken Shale play had two extra drilling rigs working after the state’s rig count dropped 80% during this year’s pandemic-driven economic meltdown. The added rigs are on special assignments, exploring the potential for carbon capture and storage (CCS), as well as slurry fracture injections. A rig in Center, N.D., is drilling a well to explore CCS prospects for a major utility cooperative. Another rig in Johnsons Corner is said to be the first in the Williston Basin specifically drilled for slurry fracture injections. 

The pump slurry well underway has about 20% solid waste, which would be injected into the Broom Creek formation about 7,000 feet (2,134 meters) underground. The end result if it proves successful could lead to fewer landfills and avoid trucking oilfield waste out of state. If radioactive waste (TNORM) is found on any of the reclamation sites, it could be disposed of locally since the slurry injection project is slated for completion before the end of this year.

In the CCS drilling, Grand Forks, N.D.-based Minnkota Power Cooperative plans to capture 90% of carbon emissions from its 455-MW unit at Milton R. Young Generating Station to potentially extend the life of the plant another 25 years. Minnkota Power seeks to pump carbon into an underground geologic storage area on land underneath the lignite mine that supplies coal to the plant.

These projects in North Dakota and around North America demonstrate that oil and gas operations can and are being conducted responsibly. And there is a lot more innovation and technology advances waiting to be tapped. Unlikely? Unrealistic? The doubtful and skeptical should talk to Lynn Helms and his colleagues in North Dakota. 

Richard Nemec is a regular contributor and West Coast Correspondent for P&GJ based in Los Angeles. He can be reached at

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