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Regulators Look To Update Oil And Gas Bonding Requirements

Stephanie Joyce
Wyoming Public Radio

As the list of orphaned wells in Wyoming continues to grow, state regulators are looking to strengthen oil and gas bonding requirements.

Oil and gas companies are required to post bonds before they begin drilling, in order to ensure compliance with regulations during drilling and cleanup. But current bonding requirements have been criticized for failing to discourage abandonment, and for not being sufficient to cover the costs of plugging orphaned wells.

The new rule increases the amount companies have to pay up front from $75,000 to $150,000 for all of their wells on private land.

“Some companies [$150,000] would be more than enough and some companies it wouldn’t be enough to plug all their wells,” said oil and gas supervisor Mark Watson, noting that because reclamation costs vary so much from one well to another, the dollar amount is somewhat arbitrary.

The state also requires operators to post a bond of $10 per foot on wells that aren’t currently producing, but that hasn’t always happened.

Wyoming is currently in the process of plugging almost 4,000 wells that were abandoned by their operators. 

The new rule needs to be approved by the Governor and then will be open to a 45 day public comment period.

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