Jun 24, 2014|
Louisiana's regulation and inspection of oil and gas wells, including 'orphaned' wells, is inadequate, Legislative Auditor finds. Garland was joined by Karen LeBlanc, Performance Audit Manager with the LA legislature Auditors Office.
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Automatically Generated Transcript (may not be 100% accurate)
Welcome back we've done mini show notes and followed the controversy over the proposed lawsuit. Against all the gas companies to force them to pay for the destruction of wetlands than they did and they -- Basically -- while we wanted them to we want. The low prices of ball we won't bring you accessibility. To energy and more. -- -- is we can't. But the problem -- they reached in his -- the numbers of Gregory fifty to a hundred billion dollars. We're gonna need to over the next fifty years and so. To keep us from uploading again. And and and that sounds like just the -- way conversation but it's Pittsburgh week. The fourteen billion dollar wall borrowings of -- brown does. Is much better than what we and but it's still in the 100 years -- gore. It's not the 500 year or elect and problems. The 101000. Were still looms in the football fields of land below is a breed. And as. The golf moves closer to us agreed to all kind of problems the biggest thing. The law. Of -- but it's always -- to real possibility. And as you you probably know via and the governor and and people who bribes and -- in the legislature. Killed that doe lawsuit although. There's still didn't you've been going for more understand. But one almost gone and Brooks from reading true with me and one of them had this headline. Louisiana's regulation and inspection. For own guests well those including or from wells at worlds have been banned and is inadequate according to actually let's just. And one I've read about it as some blues on. A police cells and that put. As -- anything can change. And thankfully we've got somebody. Wrong -- a regional legislative auditor's office. To help me better -- stay in this and it's a terrible book -- are appreciative to have very much. The problem Harry doing good doing it abuse if you don't mind numb and read from sections. All of the report itself. I'm anything you can comment on. I appreciated knew that -- nodding your expertise. Don't comment on napoleon's stay in the just appreciate each calling up one of the thing it says. That Texas Oklahoma California number of the State's. Only record 25%. On tour. Leading we'll get production states like Texas. Oklahoma California. Louisiana has only record 25%. States. 57000. Plus wells. To be properly covered by a financial security agreement in -- about the State's financial security team ball or what is that. Well financial security is financial and demand a certificate of deposit are another type of financial assurance that operators. Put up before they -- well. To finance and it's kind of like insurance that kind of insurance that -- stay in and that well and the future. That the state can go back and take GAAP financial security and -- that actually one. The -- well so below we found is that in Louisiana where. One -- the where actually the only state that doesn't require financial security on all of our oil and gas well. We allow exemptions for certain operators and a lot of well all of the other pretty high producing states. Required on all their wealth and even for the well that we do require financial security on which like he's at a point point 5% well. Financial security is lower than other states and it's not sufficient to actually cover the cost of the -- that well. And it serves as security law itself things took effect in 2000. Right 181000 wells have been grandfathered in because of the long and you guys have found no author. 24000. Will meet the exemption criteria. So -- Bible. Louisiana actually set up there in laws a little bit later than most states a lot of other states Paramount in the forties and activities we didn't -- -- up until. People out and then we grandfather built the don't well that our party drilled in at that time about what we have a lot of -- exemptions. How can we get an abandoned oral or putting well is it. Private property owners that their only access to the well or is -- oil company news. Yeah it skipped all companies that drill on private property. And if it's man operator an irresponsible operator abandon that well in the state has taken over it becomes an orphaned well. They've taken off picnic and -- operators well if they don't take care there now what they have a lot of compliance issues in violation they'll take Everett that well as a as well. There's two ways that a welcome to come or send them. There have always stood very candidly admitted that I'm Pro Bowl oh -- on battery alone in the room to room. Fighting the lawsuit against or companies all the would review of the lawsuit. I grew up the board was then called holy war okay down while withdrawal routes about -- that. And I think that we were asking for all we intend to go and wondered cheap and we -- -- plentiful but. I've looked at the permit so I've seen dude the wall. And -- oil companies the majority of whom were required to rebuild wetlands and hardly tried to and after the torrents -- and -- And and we're facing a fifty to a hundred billion dollar bill. In an attempt. Not to -- bill museums coastline that's always. -- statement. In order to attempt to halt the -- wreaths and a law. Well in the meantime we've read this from -- regional legislative auditor. Who says in the meantime regulation inspection of oil and gas well it's. In this state in particular or from well. What the companies to walk away from the welds or in that group would just not -- in the and we don't look back the reporter and looking and says as -- about 2013. 2008 and 46 orphaned well holds have not been plugged just since then. And apparently the coal produced some -- called state financial security law. Word plunged in a reputable companies you know putting up a whole lot of money. On the -- -- securities. And part of the report says deaths. The insufficient financial security. Made provide an incentive for operators orphaned well it's instead of plugging. -- the financial security of moments too low. Operators may have been -- the well for that the financial security. Because it's cheaper to abandon the borrow and pay the actual cost blood. And as always it will Ingrid reed reports whether -- be in the news or PDF file. We try to get -- experts and we -- Karen will be long performance audit manager. With a -- legislative auditor's office get from what I just read news is is that correct. Right. Like a better player -- security amounts are pretty land. Does financial security is based on how -- the well was drilled. And ours is one dollar term reflect pleasantly accountancy. We've found other states have higher amount. And viking dad in the financial security amounts too low an operator may just abandon the well instead of paying in higher cost associated with plugging the well. So our report made recommendations. Related to requiring that all operator -- I'll have that financial security and that the financial security requirement to be raised to cover an actual cost applaud the. Greg we've plugged -- and actually there's several of these notes and pro in the -- department that appropriate sort of thing called for the soup I don't I don't. They've fielded inspector. But a -- large percentage while ago as well -- that thing was over. 50% is that correct. That's track we also looked at how the opposite of -- -- -- which regulating them all in gas wells that were predicting and not predicting. Well that are not pretty -- more likely to become more and -- were trying to make sure that they are actually doing all there. Regulatory responsibilities related to active as well. And what we've found is that about 53% -- well for not inspected at least once every three years which is there. Requirement we also found that about 25% of wealth were not expected at all ever figure period. And conducting inspections is important to make sure that well turn out leaky and that passed. And then also with the state. I don't think they require the or company news. Two blue when they see you will is not being used they're not reports say whether it's showed in orphan or or continued to. Right when a well becomes an active as the icon they either have the operator at this specify whether. That well has that future utility meaning that it can be put back into. Khatami's and the future or it has no -- utility it has no future credibility then operators supposed to plug that well within ninety day. Without that they did not do that. On the other side of the future utility well we found that there was no timeframe for how long -- couldn't spit in -- ability. So we found I think about 50% of wealth that or. There were classified as future utility had been there -- 10%. So what we've recommended this that day specify how long these wealth can be -- -- utility to make sure that operators aren't just hiding there abandoned well and that -- And and a -- the number of four from worlds could grow in the future because you'd guns and unplug. Overdo things -- Kelsey wells that can be considered at risk of being north. Life those and as an active well that area either refugees Hillary Hernan future utility haven't been plugged. -- or these regulations through these laws. These are regulations that opposite constellation. I guess they're most of their regulatory authority through regulations. And is regulation back is from regulation backed by a ball. I think that the -- of the commissioner of cooperation broad authorities. And that authority is to develop regulations to regulate the industry so the -- and the authority to do that that doesn't specify exactly. The regulations are more detailed and end and what they're -- today -- and how they regulate. One final -- from one. Happens to this kind of report down here Sydor on the shelf somewhere action the. Well actually. If you look at. The conference in response they agreed with popular recommendations and their party started implementing some of them actually mallet and a couple of weeks ago. And over kind of what their approach is going to be implementing the recommendations of the hopefully. -- happen. Remember them did they give any reason as to why they've been so it'll actually and that he. Authorities that they have. I think a lot of it is acting and resource issues. As for other reasons I'm not offshore. All right Karen thank you so much show period and called him -- -- jumped on talking about -- a little bit complicated the cute boy did were I can. Thank you so much for calling. -- Our Liberia but what we're talking about a -- dual fuel windows. -- a lot of controversy. In this city in this state. Concerning oil destined for me and they built -- and continued to do this. Wooden -- Anymore probably. They saved it and -- -- trade show do. A lot of cherry trees lot of benefits of win every year or funded law. They pay a lot of taxes we get royalties. But it it's we've we've hit a point. Where we've been southern part of who we unit is going way at football field and our. Keep reporting broke. Saying keep repeating that. He is because it's so hard to believe but it's true that it's document. We got satellites which can walk through the regular news is being going on productive. And it's just common cents. As the grown. UP goes way. And the -- it's closer. The threat. By the flooding from storm. Literally losing the land that towns built on and corrupt society. Become. Much much higher percentages. But it may happen. In the oil industry would always felt like we were partners with him. And if they've got thousands of oil wells and gas wells that they're abandoning. Because our state financial security ball. Unlike Texas Oklahoma California of the State's. Doesn't require them to put open up -- money. -- -- for the closing of that. And it's cheaper for them just a walk away from wouldn't pay a fine. Just don't PR war is communication lines. Can that take some bloody bits roiling idea that understands the benefits and says. And we -- -- in the ink pearl. The lady just said that probably one of the reasons we have so many. -- burn up resources. Conservation. Office. Doesn't have the money for the inspections. So if we do war and thousands of -- abandon. All the -- museum that means we pay more. In the anybody else see that that won -- -- currencies the beginning of the -- of the bonds. Between a lot of problems with the oil and gas industry I'm not and to Ohio or yeah a lot of state continued to -- obviously. Lot of our economy is based on them. But over the stone from the of the Dave Bush and -- -- -- believing -- lawsuit against the oil companies. That the governor kill but others that are still prone continued and I told him that I do that group the lawsuit he did not. And it's in the us we want and it's -- -- it's it's probably better than now. But it could -- like if if my house who's actually here in these very close for a and we've helped each other over the years -- -- competency and and I said you know viewed as a -- to cut parts of -- -- part of it. Was so Roma improved finesse that you know be cared for me in the is it -- damaged an additional improvement -- -- coated -- on the roof. And I says it didn't look heaven god in the other way to April pleas to live. -- -- You can can -- help pay for the damage you do. And to me that's that's the situation room Google India companies. We don't have the money to continue living here. I know that sounds strange but we need fifty to a hundred billion dollars. And hear all the debate about how much movement we -- -- more we don't have injury now. Nor can anybody point to. Where the money's coming from win and now. And the closer the gulf gets to office at a football field walls in a real war. The bigger the road all week quote loans are Holtz. And we're asking our -- eight you -- the wetlands -- that permits. The regulations. And help us now with the governor of killed it and now we've got a report from the look these young legislative. Auditor's office. That says we got orphaned well abandoned wells all over the state. And the regulation. In the inspection. By the department of natural resources is inadequate did best. Let me give an example. Latest figures 2013. Twenty eight hundred forties it's wells 2000 it imported since -- Or orphaned in the hadn't been plucked. And because we have some Golden State's financial security law. That took effect back in the 2002001. These wells -- didn't plug because unlike Texas Oklahoma California. That -- acquired their oil companies. To have financial security. So that when they get rid of a lot downer ban didn't close the well. They have the financial security to do it here. It's cheaper for oil companies and breed from new port. Not having sufficient financial security cover the cost of -- well it's provides in in Santa. Although companies orphan the welds and set a plugin. If the financial security of members to -- Operators. Can abandoned well. -- -- the security. Financial security. Deposit. Because it's cheaper. But it would what do you think Lou the Stockton at. -- your own -- appreciative. Are you feeling today. Behind it that world com and I would not -- -- -- an -- Abu. The people out there. -- Com on the record. He's always at war part village simply because I can't say it. Will -- in every week. It put the picture. It. All of recreational. Fish and -- Houses everything out there in. Borrow -- Mary parishes and now the law. Are out of fairly regular -- -- responding to a demand content okay. No one none of the borders asking to do that in fact as planned shows or at least planes. If they tended to back delivery was his turn to mark she wouldn't work. What were asking them to do you -- Andy. And everybody that lives here that's listening. Is gonna end up paying a whole lot. Of property taxes or other taxes. In their attempt. To rebuild or at least build some wetlands so weakened state here. And we're asking them because of the damage they cause to help those with. That's. We're. Glad -- -- al-Qaeda second pot operatives are. Yeah taken a look at -- upbeat select people and compensation. What they had done it all. Right you. Our property actually pays down almost made the sand. Are there is -- -- been -- it's it's actually in saint but. It. It is actually. -- thought. Millions of dollars -- -- and incite an -- We're over I would disagree with -- -- that nobody is allowed to board the sport has been looked at very closely because. After Katrina. We -- qualified people to be there. And the majority of these people engineers scientists. People that understand hydrology. One of the people on the border and the governor got -- Was in charge of all Lebanese and California. He's an expert. Don't get paid. And number of them have trouble long distances here for the meeting it's. I think the composition of the board was blows real. Closely. Looked that. And the governor replaced -- of them at this sport to. So the numbers two and 018. Submarine particular view with the oil and gas companies out there. I'm sure you don't like what I'm saying or call and tell me where I'm wrong incorrectly. Where it's -- thing -- A Terry what do they tell you one thing I learned. And then you call. And you say something that that. Shows that I'm wrong -- -- Were looking for the truth here in -- -- the truth scene should be. Now we've we've always had a ball along with the oil and get those companies for the good they do this state. We've always had a ball and for the benefits we get. Lower gas prices. Acts as energy. Overall Limbaugh. And beat him and I don't think about it you -- -- To -- to follow and a 50000000100. Billion whatever it takes. Not to rebuild the coastline and -- students stabilized. So were ordered in a bigger threat situation than -- already are. And John -- in the rules that lived a lawsuit. Have said openly all ultra and do get the oil companies to be able. To negotiate. The damage that they did. Her their permits. In the we've got -- John Barry enough to blow the authority. But the Louisiana legislative audit Terkel auditor for the legislature. And take a look at all and gas company -- bureau life. An hour ago. And then saying we got four more of orphan wells abandoned wells and other states. In oil companies -- walked and went from. Don't you think that the ball and between that which I think we -- for decades. May get launched bringing the if we. Ever get to the point where -- Williams they -- or believe. That we're gonna put the bill.