What Should a Developer Consider with Former Oil and Gas Sites?

What Should a Developer Consider with Former Oil and Gas Sites? image
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As profitable as oil and gas fields may have been in their heyday, they can be equally treacherous to current developers seeking to build on these sites.

Particularly in California, as the oil boom slowed in the 1950s, oil-well operators began unsystematically plugging their noneconomic wells with unsuitable materials like telephone poles, soil, broken rock, and rubbish. Other operators followed the plugging regulations in place at the time—procedures that are not acceptable today. Later, many of these wells were paved over, and houses and buildings were built in these newfound neighborhoods.

This lack of improper plugging led to a host of challenges, including the potential for explosive and toxic fumes, which experts link to long-term health problems. One issue associated with deteriorating oil wells is the release of methane—an odorless, highly explosive gas. Methane can build up in the spaces beneath buildings, and if enough accumulates, a small spark can cause a massive explosion. 

The Challenge of Plugging Wells

The California Geologic Energy Management Division (CalGEM)—the agency that regulates and oversees oil activity in the state—dictates the specific steps for proper abandonment, the term for plugging and permanently sealing a well. If a well is not properly abandoned, it can deteriorate and corrode, potentially becoming an environmental and safety concern.

There are 35,000 idle oil wells across the state of California with the potential for health and environmental implications. The federal government’s Orphan Well Program (part of the Bipartisan Infrastructure Law) allowed states to receive up to $25 million to identify and plug orphan wells. The challenge is identifying these old wells before they can be plugged.

While funding exists to abandon these wells, it is often prohibitively expensive—in 2016, CalGEM spent approximately $1.4 million sealing just two of these wells. At this rate, it would take hundreds of years to properly abandon the wells in the Los Angeles area alone.

Affordable Housing Developments

The shortage and need for affordable housing has developers looking at former oil and gas fields as locations for development. Sensing the potential, real estate developers have flooded to these sites to take advantage of affordable housing development incentives and recent legislative changes that allow for an expedited development process.

However, there is a considerable liability involved in developing a former oil or gas site, making detailed evaluation and remediation a necessity. Building housing over these sites could lead to methane migrating into basements and homes, causing vapor encroachment and explosion issues. 

Unfortunately, these situations are more than warnings—they are a reality. In 2017, an abandoned natural gas gathering line in Colorado that had not been properly evacuated and sealed caused an explosion at the site’s housing development that proved fatal.

Ensuring a Safe, Successful Development

While some authorities say disrupting the soil and placing structures on these wells amplifies health risks for residents, building on former oil and gas sites can be a viable, safe option with the assistance of a third-party consultant.

California Environmental Quality Act (CEQA) is the state’s broadest environmental law, requiring builders to assess the environmental impacts of new development and research ways to avoid or mitigate these effects.

Environmental consulting firms can help you with assessment and remediation efforts by first ensuring the site is clear of old equipment and materials, including pump jacks, storage tanks, and separation equipment. Then, the team will check if the abandoned well was properly plugged, in accordance with today’s more stringent laws. 

Current and Evolving Regulatory Standards

It is important to note that while a well may have been adequately plugged by the standards of the time, this method may no longer be satisfactory. To ensure the well is properly plugged by today’s standards, your consultants will evaluate the current condition of the well, reenter the casing, clean it out, and examine its condition.  From this point a proper plugging program can be designed that will protect new development from danger.

After examining the surrounding area for surface disturbances and soil contamination from old materials, your partners will determine if pits in the area were properly closed and are free of materials like rock cuttings, drilling fluid, and other chemical-containing materials. In decades past, it was acceptable to simply fill these materials into the surface grade. This is no longer the case.

Consultants with Specialized Expertise

The rules for managing former oil and gas sites are constantly evolving to continue to protect the public. Third-party consultants act as reconnaissance agents, putting eyes on the site and documenting any potential issues. Remediation techniques are specific to each situation and may include ground-penetrating radar in conjunction with a magnetometer survey to detect old well casings and any buried materials. Additionally, consultants may utilize groundwater monitoring to identify any existing legacy impacts.

The high levels of liability and responsibility involved in planning a development on a former oil or gas site are unavoidable. However, with the right experts as an extension of your team, is it both feasible and cost effective to finish your project successfully while ensuring the health and safety of future residents. 

Cameron-Cole, an ADEC Innovations company, has 35+ years of experience specializing in assisting clients with complex environmental liabilities through environmental remediation. Contact us for a free consultation and to get started on your assessment and remediation journey.


Blog Author

Craig Smith
Craig Smith
Craig Smith is a principal geologist with Cameron-Cole. With more than 30 years of experience working in the energy, mining, and environmental fields, Craig specializes in evaluation of environmental liabilities for acquisitions and divestitures, remediation, and compliance and permitting.

Operating with significant environmental liabilities and risks presents a constant potential for complications to arise. Don't let these dilemmas hinder your organization. Cameron-Cole's environmental experts are trained to craft solutions that reduce your risks while keeping your projects on track.