Posted on 01/04/2014 2:38:42 PM PST by Lorianne
The article states that the taxpayers will be asked to make up the difference
Where? I have now re-read the story three times and can find no such assertion.
However, from the article:
"The money would come from a conservation tax that oil and gas companies pay."
What are you seeing that I'm not?
"Still, given the number of wells already abandoned and the concern that more will soon be deserted, the money is not expected to go far. The state estimated that closing the 1,200 wells already abandoned would cost about $8 million."
"But it is at that point that some companies drift into financial trouble and cannot pay the additional fees, leaving the state to scramble to make up the cost."
What it does say is that the Commission will need more money than usual over the next few years...the producers have already agreed to a conservation tax increase...and it infers that, if even more money is needed, the action can be stretched out over a longer period.
It seems to me to be saying Wyoming will be paying the shortfall. (The liberal media uses euphamisms like the name of the state in lieu of saying it is the taxpayers of the State who actually pay).
Even the title of the article says “WYOMING May Act to Plug Abandoned Wells as ...
It seems to be saying the conservation fund won’t cover the whole expense, its goal is to get another 3 million, and the article states it will take 8 million to do the job.
LOL.
This is the New York Times! It is a piece of blatent propaganda against the oil & gas industry. It is a bald attempt to scare its readers in the Marcellus Shale about the perils of hosting natural gas drilling.
If the burden was going to end up on the taxpayers -- and not the evil oil & gas companies and their cronies on the Oil & Gas Commission -- don't you think they'd come right out and flat say as much, rather than slyly infer it?
Either the Wyoming taxpayers will end up paying for the cost or part of the cost of capping these played out wells or they won’t. I guess we’ll have to wait and see what happens.
I don’t think it’s a scare tactic. I think it is just saying to think about all the close out costs more carefully and get money up front in case (as it seems in this article) companies go bankrupt before they can finish the job.
If the article helps other States get the close-out costs paid for in advance, then it is a good thing.
In general taxpayers SHOULD be more cynical and skeptical about all kinds of business ventures (not just oil and gas) that may possibly leave them as the patsy. For example, we’re now seeing this coming up with Obamacare having built in bailouts for the insurance industry.
Yes, I’m probably cynical and see bailouts behind every tree and under every rock. But events of the last 7 years tend to make one think like that.
“Why didn’t they get up front assurances (and money to back it up) that the companies would plug the wells once they were done?”
Nowadays it would seem that they would have to have some means of insuring they could remediate the sites (letters of credit required by the municipalities, for instance).
“So, the moral to the story is you flow a well enough not to let it water up but not so much you gut the producing formation leading to a non producer.”
It sounds like I’d have a hard time NOT keeping a well in some sort of “commercial level” of production, leading to either:
EVERYTHING, regulation wise, that goes along with selling part of what gets produced, and the tax-regulations not likely letting me simply divert “some” of the gas produced to my home, without a transaction of some sort passing between me as individual-resident and “my company” in charge of selling what I cannot consume;
or, I’d have to produce at some sort of “commercial level” of operation and build a personal “storage farm” (LNG???) on the property of everything produced that I did not need immediately, until the well would not produce any more and/or I could not afford/didn’t want to expand the “storage farm” anymore.
Either way, the idea of buying land that contains a natural gas well that some outfit thinks is no longer commercially viable, and keeping the well running just for a minimal flow to provide energy to my own home/ranch needs on the property, may not be a practical idea after all. Darn.
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