Idle and Orphan Well Program
In 1976, the Division of Oil, Gas, and Geothermal Resources was authorized to plug and abandon certain hazardous and idle-deserted wells (see Article 4.2 of the PRC (PDF)). Most wells that fall into this category are orphan wells. From 1977 to 2010, the Division plugged 1,307 orphan wells at a total cost of $23.7 million.
Currently, the Division is authorized to spend up to $1 million per year to plug orphan wells. A list of prospective well abandonment contractors (Excel file) is maintained and companies on the list are sent bid packages whenever the Division needs their services.
The Public Resources Code (PDF) defines an idle well as a well that has not produced oil and/or gas or has not been used for fluid injection for six consecutive months during the last five years. To track the number of idle wells in the state, the Division maintains an idle-well inventory that may be downloaded in Acrobat PDF or Excel formats. The Division program encourages operators to reactivate or plug and abandon idle wells.
Operators of idle wells must do one of the following:
File an annual fee based on the length of time a well has been idle ($100 for 5 years, $250 for 10 years, or $500 for 15 years or more).
Establish an escrow account (PDF) of $5,000 for each idle well, funded at the rate of $500 per year.
File a bond (PDF) of $5,000 per idle well.
Operators of idle wells are required to test them periodically to ensure that no damage is occurring to oil and gas reservoirs or groundwater. An idle-well test may be as simple as a fluid-level survey or may be a more complicated well-casing mechanical integrity test.
An orphan well is a well that has been deserted and has no viable operator or owner. The Division maintains a list of orphan wells that are available for adoption under the "adopt a well" program. The well list may be downloaded in Acrobat PDF or Excel formats. This program allows prospective operators to enter into a three-way agreement (PDF) to test an orphan well for up to 90 days without incurring any liability for plugging the well. If the test is successful, the prospective operator can adopt the well by posting a bond and becoming its permanent operator. If the test is unsuccessful, the prospective operator can walk away from the agreement with no liability incurred.