Not everyone believes that the energy industry has turned over a new leaf. The major players may be doing some good reclamation, but most wells are drilled by small operators, and "the majority are doing a very shoddy job," says Jim Kuipers, a former mining engineer who now works as a consultant for environmental groups.
"They're not putting the land back together -- they're putting a Band-Aid on it," says Kuipers, who wrote a 2005 report for the Western Organization of Resources Councils on reclamation problems in the oil and gas industry.
BLM officials agree that small operators are a problem. "They're trying to make a dollar the best they can, they're on a tighter budget, so there's not much benefit for them (to reclaim the land)," says BLM's Bill Gewecke. "With the larger companies, they have a larger profile, and they can say, ‘Look, we're being good stewards of the land.'"
The feds are falling down on enforcement, too. A 2005 Government Accountability Office report found that in 2004, the Buffalo, Wyo., field office achieved just 27 percent of its inspection goals. Seven out of the eight BLM field offices GAO staff visited had a backlog of reclamation inspections, and all eight offices had conducted only half of the inspections planned for the previous six years.
"Why should oil and gas companies step up and be responsible when BLM doesn't enforce it?" asks rancher and activist Tweeti Blancett, who has fought energy companies on her property in the San Juan Basin for years.
Don Likwartz, the oil and gas supervisor for the state of Wyoming, says that even when local BLM officials want to increase enforcement of reclamation guidelines, their bosses in Washington, D.C., have other priorities.
"In some recent years, with the pressure on to get more drilling permits issued, BLM has used those (inspection) people to issue permits instead of inspect sites," he says.
Gewecke acknowledges that reclamation is not the first priority. The BLM has its hands full just trying to make sure that all those new wells are drilled according to agency standards, and that companies pay the royalties they owe, which has been a major problem in recent years. The new pilot project is a good start, but it's only a handful of offices. The agency's reclamation efforts are still hamstrung by a lack of resources.
"We've been trying to get more funding for all the offices, but since it's an appropriation, it's hit or miss," he says. This year's budget saw only a slight increase in enforcement funding -- $30 million, compared to $28 million last year.
That's just not enough, Gewecke says. "To do what we feel we should be doing, it should be higher," he says, although he declines to specify how much money he thinks is necessary.
"We've always had an emphasis on reclamation, but it's just one of the things that gets pushed down the priority list pretty quickly when it comes to funding," he says. "We try to keep it going the best we can."
The money set aside to clean up abandoned well sites is also less than adequate much of the time. According to the Gold Book, companies are required to post a bond, or damage deposit, of at least $10,000 to cover reclamation costs on a lease in the event the company goes bankrupt or otherwise fails to pay for the work. But it costs around twice that much -- about $20,000 on average -- to actually reclaim a well, and there can be more than one well on the same lease.
The bonding system works like this: A company with leases throughout a particular state has to post a minimum $25,000 bond, and a company that operates nationwide posts at least a $150,000 bond, which covers all of its wells. How much a company's bond is depends on a variety of factors, including how many wells it has and where it operates. In Colorado, EnCana Oil and Gas has 3,652 wells, but its statewide bond is $235,000, which amounts to about $64 a well, according to Jim Kuipers. His 2005 study found that in five case studies, bonds fell short every time, to the tune of $120,000 to $6.8 million.
In one example of bonding gone wrong, Emerald Restoration and Production Company went bankrupt in 2001, leaving the Wyoming BLM holding the bag for $3.9 million in reclamation costs for 120 wells. The agency ended up suing the company. But Tom Lahti says that case was a rarity; most companies, he says, reclaim their wells without incident.
Companies these days rarely default on a bond because it's bad for business, says Tony Herrell, deputy director of BLM's New Mexico state office. "A reputable company is not going to default, because it would put them out of business," he says. "They would not be able to operate anywhere if they defaulted."