This story is part of our Quick Hits series. This series will bring you breaking news and short updates from throughout the state.
An oil company claims it’s not responsible for plugging 10 oil wells on the Wind River Reservation and is taking that claim to federal court.
Pioneer Oil & Gas is suing the Northern Arapaho Tribe, the U.S. Department of the Interior and the Bureau of Land Management (BLM) in a case filed in the U.S. District Court for the District of Wyoming in December.
At the heart of the lawsuit is a question of how two separate leases, punctuated by a bankruptcy agreement, impacted the company’s liability for plugging wells that were not continuously operated.
According to the complaint shared by the legal blog Turtle Talk, Pioneer Oil & Gas took over a lease for the Northern Sheldon Dome Oil Field in 1990. The field is located in the northwest corner of the Wind River Reservation, and is on land held in trust by the U.S. government and owned by the Northern Arapaho Tribe.
Pioneer operated 10 wells there for a few years but stopped operation in 1994. It then terminated the lease and filed for bankruptcy in 1997.
Following that bankruptcy filing, the Northern Arapaho Tribe asked for $20,000 in unpaid severance taxes as well as $445,000 for plugging and abandonment and cleanup costs. A year later, the Northern Arapaho Tribe withdrew their claim for payment for remediation.
In 1999, Pioneer Oil & Gas came out of bankruptcy and entered into a new lease for the same field. The new lease contract, as quoted in the court filing, stated that “[Pioneer] agrees to plug securely all wells on the Leased Premises before abandoning the same.”
In the court filing, the company asserts that “the intent of this section as understood by both parties was to require Pioneer to plug all wells that Pioneer developed under the New Lease.”
However, Pioneer Oil & Gas terminated that lease with the Northern Arapaho Tribe in 2001 and didn’t end up operating the oil fields during that period of time.
Nearly 20 years later, the BLM’s Lander Field Office issued an order to the company, requiring that it clean up the 10 wells operated under the old lease.
Pioneer disagreed, with the lawsuit stating that “neither the New Lease nor the Mineral Leasing Act impose on Pioneer a responsibility to remediate operations conducted under the Old Lease, and Pioneer’s liability under the Old Lease had been resolved in bankruptcy."
The court filing is ambiguous on exactly who punched the 10 wells in question in the first place. It states, “Under the Old Lease, Pioneer or predecessors of Pioneer drilled the 10 wells that are the subject of the IBLA Decision.”
Pioneer Oil & Gas appealed the directive to the Wyoming BLM director as well as the Interior Board of Land Appeals. Both entities affirmed the agency’s initial directive.
According to Reid Lambert, an attorney representing Pioneer Oil & Gas, the case is still in its early stages and doesn’t have a hearing date yet. A representative from the Department of the Interior declined to comment, and Pioneer Oil & Gas and the Northern Arapaho Tribe did not respond to requests for comment prior to the publication of the article.