Bismarck — The North Dakota Industrial Commission approved orders today from the state's Department of Mineral Resources to confiscate more than 200 "orphaned" oil wells from contractors and begin the process of plugging and reclaiming them.
This decision follows the approval of $33.2 million in federal CARES Act funds by the North Dakota Emergency Fund in May, also aimed at reclaiming abandoned oil wells. The Department of Mineral Resources is seeking final approval of an additional $33 million in CARES Act funding allocated at a June 18 Emergency Commission meeting.
The well reclamation is meant to function as a jobs program for the oil industry while it's stalled by the coronavirus pandemic. The industry is weathering its largest production drop on record.
The Department of Mineral Resources estimated that the plugging and reclamation process will create more than 550 jobs over the next three to six months.
"We've seen an immense amount of support from the service companies wanting to get their employees back in the field and working. So many of them (are) relying very heavily on the PPP (Paycheck Protection Program) not just because of coronavirus but also because of oil prices," said Katie Haarsager, a public information specialist for the Department of Mineral Resources.
"Orphaned" wells, or wells that do not have a functioning operator, were historically rare in North Dakota. But as oil operators cut back on drilling during the pandemic, the number of "orphaned" wells in the state leapt from none to more than 400.
Most of the oil wells approved for confiscation have already reached the end of their lives, with some dating as far back as 1950. A total of 368 wells were under consideration for confiscation, of which 239 have been approved.
Once abandoned wells have been plugged, contractors will begin the process of reclamation, or converting old oil land back to agricultural land. Haarsager estimated that the nearly 2,200 acres in northwest North Dakota will return to agricultural land as a result of the reclamation program.
The Department of Mineral Resources will collect bids from well contractors over the next few weeks and begin plugging wells in early July. Reclamation work is expected to begin in August.