Louisiana Proposes Critical Action to Address Wasteful Gas Flaring and Stem Tide of Orphaned Oil and Gas Wells

The Louisiana Department of Natural Resources announced late Tuesday a set of proposed rules to address the issues of routine gas flaring and idled oil and gas wells at risk of becoming taxpayer liabilities.

Natural gas venting and flaring in Louisiana wasted $16 million worth of energy resources in 2019 alone – enough to meet the needs of the entire city of Baton Rouge for a year and a half. This waste costs the state valuable tax and royalty revenue while also contributing to local air pollution.

Louisiana also has over 28,000 oil and gas wells idling under the premise of “future utility,” which are at high risk of becoming orphaned. This would leave the state’s taxpayers with a $2.5 billion clean-up cost.

“Gov. Edwards and the Department of Natural Resources Office of Conservation have taken a critical step to protect Louisiana taxpayers, create jobs across the state and safeguard the health of our families. Solutions to address waste from routine venting and flaring and prevent everyday Louisianans from footing the bill to clean up after industry are commonsense, cost-effective measures we can’t afford not to take.”

• Liz Russell, Louisiana State Director, Environmental Defense Fund

ADDITIONAL BACKGROUND

Venting and Flaring

Venting and flaring are a significant source of gas waste in Louisiana. Recent analysis finds that in 2019 these practices wasted $16 million worth of energy resources. Oil and gas operators avoid paying taxes and royalties on wasted gas, so taxpayers, federal and state governments lose revenue when natural gas is vented or flared.  Because the primary component of natural gas is methane, a super potent greenhouse gas, slowing the rate of climate change is an important co-benefit of preventing waste from venting and flaring.

Stopping waste from venting and flaring is overwhelmingly cost-effective and can help create jobs in the fast-growing methane mitigation industry, which already boasts 32 facilities across the state.

Louisiana’s proposed action on routine venting and flaring is another example of state leadership on methane waste. Other energy states, including Colorado and New Mexico, have already taken action to end waste from routine flaring and demonstrate that it can be done affordably and effectively.

Idle Wells

Louisiana has over 28,000 inactive “idle” oil and gas wells. These are wells that aren’t actively producing but also haven’t been permanently sealed and represent a $2.5 billion taxpayer liability if they become “orphaned” – meaning that they are inactive, unplugged and have no solvent owner of record.

Poorly regulated idled wells pose a serious health risk to the communities forced to live with them given the risk of soil and groundwater contamination, toxic air emissions and reduced property values. Many of these wells have been idle for decades – and the longer that a well remains idled the higher its chance of eventually becoming orphaned.Requiring the oil and gas industry to take responsibility for properly retiring its assets by plugging inactive wells would create thousands of good-paying jobs for Louisianans and leverage skill sets already held by working people in the state.