Federal govt failed to inspect high risk oil and gas wells, say auditors

The U.S. government has failed to inspect thousands of oil and gas wells it considers high risks for water contamination and other environmental damage, congressional investigators have found.

A report, obtained by Al Jazeera ahead of its public release, by the Government Accountability Office highlights substantial gaps in oversight by the agency that manages oil and gas development on federal and Native American lands.

Investigators said weak control by the Interior Department's Bureau of Land Management (BLM) resulted from policies based on outdated science and inadequate monitoring data.

"Some of BLM's rules and guidance governing oil and gas development have not kept pace with technological advancements," the report said.

"The effectiveness of BLM's management and oversight of federal and Indian oil and gas reserves is hindered by a number of factors, including BLM's reliance on outdated rules and guidance."

The congressional study said the BLM had failed to conduct inspections on more than 2,100 of the 3,702 wells that it had specified as "high priority" and drilled from 2009 through 2012. The agency considers a well "high priority" based on a greater need to protect against possible water contamination and other environmental safety issues.

The agency had yet to indicate whether another 1,784 wells were high priority or not.

The report said BLM has not reviewed or updated many of its oil and gas rules to reflect technological advances, as required by a 2011 executive order. They include guidance on spacing of wells, which the report said could help maximize oil and gas production.

The bureau acknowledged it had not updated its guidance on oil and gas drainage since 1999 or its guidance on mineral trespass — interference of drilling or mining activity — since 2003. Hydraulic fracturing, or fracking, largely came to prominence after the latest government regulations and comes with a different set of risks than conventional drilling.

The findings from the Government Accountability Office come amid an energy boom in the country and the increasing use of fracking. That process involves pumping huge volumes of water, sand and chemicals underground to split open rocks to allow oil and gas to flow. It has produced major economic benefits, but also raised fears that the chemicals could spread to water supplies.

"From 2007 through 2012, annual production from shale and tight sandstone formations increased more than sixfold for oil and approximately fivefold for gas," the report said.

President Barack Obama has praised increased U.S. oil and gas production for creating jobs and decreasing reliance on foreign oil, but at the same time, he's also committed to speed the country’s transition to clean energy.

To that effect, U.S. Secretary of Energy Ernest Moniz will be attending the 5th Clean Energy Ministerial (CEM) in South Korea Monday. The CEM is an annual high-level meeting of ministers and other stakeholders from over 20 countries meant to accelerate the world’s switch to clean energy technologies.

In the coming months, the Obama administration is also expected to issue rules on fracking and methane gas emissions. Environmental groups say the administration needs to do more to guard against environmental damage.

But to industry groups opposed to government regulation of the oil and gas industry, the Bureau of Land Management has become a symbol of federal overreach and even its limited oversight is unwelcome.

The report, originally obtained by The Associated Press, makes clear in many instances that the BLM's failure to inspect high-priority oil and gas wells is due to limited money and staff. BLM officials said they were in the process of updating several of its policies later this year.

In response to the report, Tommy Beaudreau, a principal deputy assistant interior secretary, wrote that he generally agreed with the recommendations for improved state coordination and updated regulations.

Investigators reviewed 14 states in full or part: Arkansas, California, Colorado, Louisiana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas, Utah, West Virginia and Wyoming.

The audit also said the BLM did not coordinate effectively with state regulators in New Mexico, North Dakota, Oklahoma and Utah. North Dakota, second only to Texas in terms of oil and gas production, has seen energy and economic booms in recent years thanks in part to fracking.

Congressional investigators found the BLM did not monitor inspection activities at its state and field offices and thus could not provide "reasonable assurance" that those offices were completing the required inspections.

In Pennsylvania, for instance, an Associated Press investigation found the state received 398 complaints in 2013 alleging that oil or natural gas drilling polluted or otherwise affected private water wells. More than 100 cases of pollution were confirmed over the past five years.

"This report reaffirms our concern that the government needs to pay attention to the environment and protect public health and drinking sources from the risks of oil and gas development," said Amy Mall of the Natural Resources Defense Council.

Al Jazeera and The Associated Press. Renee Lewis contributed to this report.