EARTHWORKS

REGULATION: How many wells per inspector? In some states, answer is elusive

E&E | Ellen Gilmer

July 25, 2012
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Figuring out the number of wells each oil and gas inspector must handle in North Dakota is pretty simple. In Pennsylvania, easy. In Oklahoma? Not so much.

A recent overview of state shale gas regulations showcases major gaps in data available to compare, state by state, the force of oil and gas agencies. Oklahoma, for one, doesn't know how many producing wells it has.

The analysis, released earlier this month by environmental think tank Resources for the Future (RFF), uses maps to illustrate states' regulatory force, broken into categories such as site development and wastewater storage. But jumping out from one map that depicts the number of gas wells per inspector are the many states shaded solid brown, meaning no data are available.

This lack of data comes at a time when understanding the workload of state inspectors has become crucial as states grapple with booming shale development and often shriveling budgets.

"If it's not caught and it's not recorded, it can't be remediated and measures can't be taken to keep it from happening again," said Nadia Steinzor, an organizer for Earthworks who recently studied the frequency of well inspection in New York.

Among the data-less states on RFF's maps are hydrocarbon heavyweights like Texas, Oklahoma and North Dakota. Further review finds that some of those do have statistics handy -- but in others, it's a tricky task to nail down even a close approximation.

In Oklahoma, learning staffing numbers is easy enough: The Oklahoma Corporation Commission, the agency charged with regulating oil and gas activity, employs 62 inspectors, a recent increase from 58. But the number of wells each inspector must handle is a statistic followed by seemingly endless asterisks.

In 2010, the state estimated it had 180,000 "active" wells -- 65,000 for natural gas and 115,000 for oil, according to an annual report. That number has since increased to as many as 190,000 active wells. But "active" is a loose term and doesn't indicate production. Spokesman Matt Skinner explains that the number of producing wells is tough to determine for a few reasons.

First, there are lease complexities: If an oil and gas company has one producing well on a lease, all other wells on that leased parcel are considered to be "held by production." That is a regulatory term that essentially means the state cannot order the company to plug the wells (unless there is a safety risk), and the company can choose to restimulate them at any point. So, many wells may be idled but still counted as active.

The second cause for obscurity in Oklahoma's well count is the state's long history in oil and gas production and its incomplete record keeping in the early 1900s. There are old, plugged wells that do not have their paperwork in order, so the state will continue listing them as "active" until plugging records are found. And that's a heavy lift for state regulators.

"We are in the process of searching out any documents for all wells in order to make sure our database is as up-to-date as possible," Skinner said in an email to EnergyWire.

"Bottom line -- we are working the paperwork and other data to come up with a producing well number," Skinner added in a follow-up, "but we won't be done anytime soon."

Many wells, fewer inspectors

It is a different story in North Dakota, where Department of Mineral Resources spokeswoman Alison Ritter says regulators know where every last well is. The oil-rich Bakken Shale has yielded a surge in development there over the past couple of years, prompting the state to hire more inspectors.

But Ritter explains that it is difficult for the state to recruit enough qualified hires. Professionals with expertise in oil and gas standards get scooped up quickly by energy companies offering hefty paychecks.

"There is a great need for workforce in our area right now," Ritter said.

Statewide regulation of hydraulic fracturing

States have selected markedly different policies in some cases for regulating fracking operations. Here are state actions on four key benchmark issues, compiled by Resources for the Future as of July.

State

Requirement for pre-drilling water well testing

Rule on cement barriers protecting water aquifers (depth below water table)

Rule on fracking fluid disclosure

Liners required for fluid storage pits

Ariz.

No

100 feet

Yes (CV)

Yes

Calif.

No

No*

No

Pits prohibited

Colo.

No*

50 feet

Yes

Yes

La.

No

No*

Yes (CV)

Yes

N.D.

Yes

No**

Yes

Pits prohibited

N.M.

No

No**

Yes (V)

Yes

N.Y.

Yes

75 feet

Yes*

Yes

Ohio

No*

No**

Yes (V)

No

Okla.

Yes

50 feet

Yes (V)

Yes

Pa.

No

50 feet

Yes (CV)

Yes

Texas

No

No**

Yes

No

W.Va.

Yes

30 feet

Yes (C)

Yes

Wyo.

No

120 feet

Yes**

Yes*

 

*Zone- or well-specific requirements

*State sets minimum casing lengths but not levels below water tables

**Well-specific depths

*N.Y. regulations were being developed when RFF report was prepared.

**Specific chemicals subject to regulation

V: Volume only

C: Concentrations only

CV: Both

*Required only under certain conditions

North Dakota currently has 20 field inspectors for 7,188 producing oil and gas wells, or 359 wells per inspector. The department has funding for two more positions now, and when the number of wells reaches 9,300, another three inspectors can be hired, for a total of 25. That would be an average of 372 wells per inspector.

Pennsylvania, by comparison, has 83 inspectors for its 32,035 producing oil and gas wells. That is about 386 wells per inspector.

So, where does Oklahoma fall in line? With the many caveats to the Sooner State's well count, it is hard to say. But using the annual report figure of 190,000 active wells and 58 inspectors -- statistical shortcomings aside -- the state would have roughly 3,276 oil and gas wells per inspector.

That's not unheard of. New Mexico has 12 field compliance officers for 51,472 active oil and gas wells, or more than 4,000 wells per inspector, according to data provided by the state Energy, Minerals and Natural Resources Department.

But without more precise and updated numbers in Oklahoma, for example, the wells-per-inspector figure is no more than a rough guess. Skinner, the spokesman, says the comparison is flimsy anyway, because Oklahoma wells vary dramatically in frequency of inspection.

"Some wells are inspected every month because of issues," he said. "Others may go much longer between inspections, and whether they are in active production is only one variable in determining how often they are inspected."

Similar variances exist in Texas. The state has 245,893 producing oil and gas wells and 153 oil and gas inspectors. That would be 1,607 wells per inspector. But Gaye Greever McElwain, spokeswoman for the regulating agency, the Texas Railroad Commission, explains that inspections are scheduled for oil and gas leases, not individual wells. Gas leases hold one well each, but oil leases can hold many. In 2011, Texas inspectors conducted about 115,000 field inspections.

Fraught calculations?

Are wells-per-inspector ratios inherently fraught with inconsistencies, or is there a better way? That's part of a broader question regulators, industry and observers have struggled with for years.

"How do you measure the effectiveness of a state regulatory program on the ground where the rubber hits the road?" asked Ohio Oil and Gas Association President Tom Stewart, who is also vice chairman of the State Review of Oil and Natural Gas Environmental Regulations, or STRONGER.

Another frequently used metric is the number of violations a state issues during a given year of oil and gas regulation. But that comes with its own share of problems, as some debate whether more citations is indicative of vigilant regulators or of a reckless industry. Plus, the states differ greatly in how they issue, track and classify violations, making state-to-state comparisons even further from reach (Greenwire, Dec. 14, 2011).

"So, the number of inspectors you have out there -- it depends on the characteristics of your state's oil and gas program," Stewart said.

It also depends on the characteristics of the well. Older wells and low-producing wells don't need as much attention from inspectors, Stewart argues. In Ohio, for example, there are a multitude of wells that generate just, say, 3,000 cubic feet of gas a day.

"Should you have someone go out and look at that every day? Is that worthwhile and in the public interest?" he asked. "I would say no.

"In Ohio, the regulatory agency's time is better spent looking at how a well's being drilled in the front year of a well's life," Stewart added.

But the stakes are different in other states, he said. In Alaska, for example, wells draw from massive reservoirs of gas and oil. There, a single well might be a higher priority.

Stewart summed it up: "It's been a very interesting debate over the years."

Strong litmus tests or not, inspection statistics will likely remain visible indicators of the strength of states' oil and gas regulation. Just last week in New York, environmentalists expressed outrage at Steinzor's Earthworks report showing that the state's inspectors examined a quarter of active, traditional wells in 2010. If a state moratorium on hydraulic fracturing and horizontal drilling is lifted, industry critics argue, the oversight will fall further behind.

"No matter how strong the statutory or regulatory standards for oil and gas development, inadequate enforcement of those standards guarantees irresponsible development," Earthworks wrote in the report.

Steinzor acknowledges that states have limited resources for the effort.

"A lot of these regulatory agencies are very strapped," she said last week. "But they're not keeping up with the expansion of the industry. Some states have just not made the investment to convert to databases and tracking."

And assessing enforcement depends on reliable data.

"No one's minding the store really anywhere," Steinzor said. "There's a lot happening on the ground, which either never gets inspected or recorded, or both."

Tagged with: regulation, natural gas, enforcement, drilling

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