On June 19, 2020, the North Dakota Industrial Commission approved orders from the state’s Department of Mineral Resources to confiscate abandoned wells in North Dakota.
On the plus side, this action can be seen as part of the restoration economy, whereby oil and gas workers who have lost their jobs can use their skills to restore some of the environmental damage done by their earlier activities.
On the negative side, this can be seen as yet another example of corporate socialism, whereby fossil fuel companies make huge profits extracting publicly-owned natural resources, and then stick the public with the cleanup bill. This has been going on unabated for the past century, since those profits enable them to buy or rent the politicians needed to perpetuate this parasitic system.
A hearing was held on June 10, 2020 to review and consider confiscation and plugging of over 350 wells in the state. At the hearing more than 70 additional
wells were identified as likely to be orphaned by mid-July.
This decision is the result of the Bakken Restart Task Force’s efforts to support North Dakota’s oil and gas workforce during this unprecedented time of low oil and gas activity while investing in projects that would provide long-term benefits to the state.
The Industrial Commission secured approval in May from the North Dakota Emergency Commission and legislative Budget Section of $33.2 million in federal CARES Act coronavirus relief funds.
These initial funds provided to the Department of Mineral Resources are specifically designated to be used for plugging of abandoned wells. This work is projected to maintain 500-600 oil and gas service sector jobs.
The next step will be to receive the Budget Section’s final approval for an additional $33 million that was allocated from CARES Act funding during the June 18 Emergency Commission meeting. This additional funding is to be used for the reclamation of confiscated well and facility sites that is projected to maintain
300 additional oil and gas service sector jobs to complete the work.
The Department of Mineral Resources will be putting bid packages together for the plugging and reclamation work. More details about these bid packages will be available at www.dmr.nd.gov/oilgas.
CARES Act funds are to be used by states, territories, and tribal governments for expenditures incurred due to the public health emergency with respect to COVID-19 in the face of revenue declines.
The North Dakota Industrial Commission comprises North Dakota Governor Doug Burgum, Attorney General Wayne Stenehjem, and Agriculture Commissioner Doug Goehring.
Photo (courtesy of the Occupational Safety and Health Administration) shows a North Dakota oil rig still smoldering the day after a 2011 explosion.