Natural gas and oil producers in Payette County recently performed work on the Fallon 1-10 Well near the Payette River, not to abandon it, but to prepare it to be linked with another well. It is the intention of oil and gas producer AM Idaho to link it to the nearby Barlow well as work progresses toward starting oil and gas production.
Work on this and other wells throughout the county was one of several items discussed at the Idaho Department of Lands’ town hall meeting at the Payette County Courthouse in Payette on Nov. 6. Written and verbal questions were addressed by Mick Thomas, Department of Lands Oil and Gas Division administrator and Oil and Gas Conservation Commission secretary.
Fruitland resident Julie Fugate asked about activity at the site of the Fallon well on Nov. 4. According to Thomas, a cement truck and on-site mixing machine were being used to lay cement around the well head.
The Idaho Oil and Gas Conservation Commission reports eight wells in active production and seven wells in the process of being plugged and abandoned as of press time.
Some residents expressed concern about oil and gas vapor making it into the air as water is removed from it. Thomas responded that only water content is allowed to evaporate.
One of the the most common threads at Wednesday’s meeting was property rights. Questions surrounded rights to royalties, public safety and whether operators were subject to current regulations. Thomas reassured those in attendance that all who extract oil and gas in Idaho must comply with current law.
“When a well stops producing … we say, you have to plug and abandon that well.”
Thomas pointed out that the State of Idaho imposes bonds per well to cover the costs of plugging wells not plugged by operators. “You still have deadlines and they pay it,” Thomas says.
However, when it comes to recouping losses associated with any disasters oil and gas extraction may cause, Thomas said that insurance and state bonds don’t typically cover these.
“Litigation is the process that we use,” he said.
Capping the Fallon well didn’t start until months after the state was notified of intent.
According to public information officer Sharla Arledge with the Department of Lands, the work in progress is remedial work.
“While the operator noticed the department about their intent in July, High Mesa ultimately chose to delay the work until crews were on hand to begin plug and abandon work on seven wells in the field,” said Alredge. “There was some prep work for the Top Job done last week on the Fallon 1-10. Department of Lands staff was on site for the entire time and will continue to monitor operations closely.”
Shelley Brock, President of Citizens Allied for Integrity and Accountability had a lot to say about the well going into the meeting, including the well’s proximity to the Payette River.
“It is drilled directionally to go under the river and the bottom hole is right under Fruitland city’s water intake which has been a concern of ours all the time and, in fact, was mentioned by our attorney. There’s also a number of mobile home parks there with elderly retired people living in them that are really close to that well, and so they’re going to be exposed to the emissions and stuff if they ever start producing.”
Not ‘the most trusted company’
Several residents expressed concerns about the trustworthiness of Alta Mesa, one-time subsidiary AM Idaho and newcomers High Mesa Holdings. Thomas said he agreed with them about Alta Mesa’s dealings, stating the company “Isn’t the most trusted company.”
As to the company’s financial condition, however, he declined comment, stating that he wasn’t given that information. Alta Mesa filed for bankruptcy on Sept. 12, and Thomas said that the producer had divested itself of its Idaho operations before then.
CAIA’s Attorney James Piotrowski says that the idea that AM Idaho is immune to the financial difficulties of its former parent company is absurd.
“If AM Idaho creates liabilities for itself, such as by having a pipeline leak, or a failure at a well, it will be bankrupt also, and the people of [Southwest] Idaho and Eastern Oregon will be stuck cleaning up (and living with) any mess they create. This is exactly the wrong kind of business partner for the people of Idaho.”
AM Idaho has had three class-action lawsuits against them in the last year and a half.
Having inquired with AM Idaho’s attorney to no avail, Piotrowski says it raises questions about the legal status of the well.
“I have inquired of AM Idaho’s lawyer, and he has told me that he also has no idea what work they were doing as he is ‘not in that loop.’”
Brock remains dissatisfied with Thomas’ answers about Alta Mesa’s dealings.
“Really no excuse for him not to know that the Payette River and highway that dissect AMI’s current integration application (as well as every application that has been submitted so far over the past nearly 5 years), have been leased by Alta Mesa and have been instrumental in them garnering their 55 percent threshold. He is either incredibly uninformed or being deliberately dishonest.”
Despite the high volume of questions he had to addressed, Thomas showed patience to those present.
“I want to come out and give you guys what I know, and answer questions,” he said. “I’m not trying to build support for the industry. I want you all to understand that you’re paying me to at least do this every quarter, and come out and answer your questions.”