The California Division of Oil, Gas, and Geothermal Resources (DOGGR) just released a long-awaited report to the California legislature on the underground injection program (UIP) for the oil and gas industry in the State. Under SB 855, passed by the California Legislature in 2010, DOGGR was required to submit an annual report on this program, something it has failed to do since 2011.
The 2011 report filed with the legislature, was eight pages long. Only two pages address any investigative work done by DOGGR; five pages of the report are devoted to discussing SB 855 and some background on the use of injection wells in California, DOGGR’s UIP responsibilities, staffing and budget levels; and one page is the signature page. DOGGR submitted this report in February of 2011, but failed to submit subsequent reports in 2012, 2013, or 2014, so it was with great anticipation that some in the legislature awaited the 2015 report.
This 77-page report focused entirely on District 1, which encompasses the Los Angeles Basin. Unfortunately, the information disclosed was not encouraging. The report cited numerous industry violations, from un-authorized injection wells (323 in 2012), well integrity issues (110 in 2014), operation and maintenance issues (763 in 2013, and 822 in 2014). Equally disturbing was the disclosure of the lack of basic and required documentation relating to drilling and operations. It is obvious from this report that DOGGR’s reliance on self-reporting by the industry has failed.
The report related that as of December 2013, there were 268 injections projects in District 1, of which 154 were active. Their investigation sampled 45 of these projects, reviewing the completeness of the required documentation associated with such projects, what they referred to as the “Area of Review” (AOR). What they discovered was that 78 percent of the sample projects contained incomplete AORs. They then conducted a more in-depth review of the documentation for seven projects, subsets of the 45, consisting of 230 wells to determine whether the wells met required zonal confinement. The review indicated that 37 wells (16 percent) were “bad,” 69 wells were “good” (30 percent), seven were in the “grey” area (seven percent), and 108 wells (47 percent) lacked sufficient information to determine well integrity.
Wells designated as “grey” were those wells that met standards applicable at the time of drilling or abandonment but were not up to current standards. Wells identified as “bad” had partial or direct conduit from the injection zone, meaning the possibility that any fluid injected in the wells could migrate into other areas outside the project or well area. Of these, 16 were identified as plugged and abandoned, 17 were active, two were idled, and two were designated “unknown” status.
By their own admission, DOGGR uncovered systemic problems with oversight of the UIP. Regulations were not being enforced, paperwork was lacking and there appeared to be minimal field verification.
The report cites such problems as, “…lack of organization in the handling and storage of paper files, and project approval letters…insufficient staffing to address increasing regulatory workload… poor recordkeeping on mostly paper forms and the lack of modern data tools and systems, outdated regulations that in some cases do not address the modern oil and gas extraction environment,… insufficient breadth and depth of technical talent, insufficient coordination among fields districts and Sacramento, and lack of consistent, regular, high-quality technical training.”
Of the 207 AOR evaluations scheduled in 2013, 176 were deferred.
It is obvious from this report that increased documentation review and field inspections are needed. As more enhanced oil recovery technologies are deployed, the incident of impacting well integrity is a high risk possibility.
The recent NOAA and NASA studies that revealed methane levels in the L.A. Basin are 61 percent higher than estimated by the EPA, coupled with this DOGGR report, are a red flag on the integrity of the oil & gas operations in the L.A. Basin. The industry needs to address their failure to follow best practices and meet the minimal operational and regulatory requirements of the State.