Closure of Oil Wells Raises Issue of Safety

Rising land values and the gradual depletion of oil under urban Southern California has led to the shutdown of a growing number of oil wells, leaving the state with the difficult task of making sure the dormant pumps don’t pose a danger to surrounding communities.

Even when wells are abandoned, pressure in their reservoirs can force oil to the surface, sometimes with ill effects. A few weeks ago, a deserted well on a former landfill spewed about 300 gallons of oil, affecting 360 homes in a Huntington Beach neighborhood.

Although such accidents are rare, officials said they must be especially diligent now as more oil wells go out of production.

“We’re in a bubble,” said Darryl Young, director of the state Department of Conservation. “If we don’t work with the [oil] industry, they’ll up and leave [the wells] and we are stuck. We can work with them to make sure if they get out of the area, they do the right thing.”

The California oil industry has experienced a gradual decline since 1985, its peak production year, said Hal Bopp, oil and gas supervisor for the state Division of Oil, Gas and Geothermal Resources, which regulates oil and gas activities and oversees well operations.

Although Los Angeles and Orange counties are still considered fertile ground for oil extraction, many operators are faced with a quandary. They must either continue to drill for oil even as reserves are slowly depleted or turn over the increasingly valuable land for development.

“It’s pure economics,” Bopp said. “If a well has been idle for some time, there’s almost an economic incentive for someone who owns the well to sell it.”

There are 70,000 oil and gas wells in the state, and on any given day about 43,000 of them are actually pumping, Bopp said. Of the remainder, about 20,000 have been idle for at least five years and maintained under state regulations. They are either “shut-ins” -- wells that produce periodically -- or “orphans,” wells that lack responsible operators.

It was an orphaned well in Huntington Beach that erupted March 17, spraying oil particles and methane gas throughout an area about a quarter-mile from the landfill. The oil gushed more than 40 feet high, covering sidewalks, plants, pools and cars with a sticky black film.

The Division of Oil, Gas and Geothermal Resources plugged the well the next week, but the neighborhood’s cleanup continues. Cannery Hamilton Properties, which owns the property but did not operate the well, agreed to pay more than $600,000 to steam-clean streets and carpets, replace patio furniture and pay claims filed by residents.

So far, the company says it has received 127 claims.

Huntington Beach is one of several onetime “oil towns” across Southern California that have seen major development as wells shut down.

Signal Hill, a small city surrounded by Long Beach, used to be so famous for its oil wells that postcards displayed its landmark hill covered with pumps and derricks. Now, that hill is quickly being covered by beige houses in gated communities. A Starbucks outlet, a 4.9-acre park and a Food4Less sit on recently plugged wells.

“Almost everything in Signal Hill is, or was, an oil field at one time,” said City Manager Ken Farfsing.

He said residents have learned to live with the wells -- dodging them in parking lots or watching them work as they dine at restaurants. Discovery Well Park was built on the site of the city’s first well, which is still pumping.

“We’re one of the few cities in the area that has vacant land,” Farfsing said. “If you want to do a project here, you don’t have to tear something down, but you might have to plug a well up and clean the soil.”

There are drawbacks, Farfsing said. Some soil remains contaminated with benzene and heavy metals. Facilities built on producing wells must install a vent that catches and disposes of stray methane gas. Although most oil pipes in Signal Hill are underground, there’s always the risk of a spill.

“We can be an example,” Farfsing said. “We are coexisting peacefully.”

For the oil industry, Signal Hill is a model of how oil wells can be taken offline as development moves in. But the city has it easy in many ways, because developers pay for most of the plugging of wells.

When wells are simply abandoned by their owners, it falls on the state to maintain them.

Oil companies pay an assessment of 4.3 cents per barrel a year to assist the Division of Oil, Gas and Geothermal Resources in its operations.

Part of that assessment finances the agency’s $1-million-a-year Orphan Well Plugging Fund. Money from the 27-year-old fund is used to hire contractors to plug orphan wells. It decides which ones to plug by examining their proximity to communities, the amount of pressure in their reservoirs and other hidden hazards.

“We can’t just let the wells sit out there,” said John Martini, chief executive of the California Independent Petroleum Assn., a nonprofit trade group representing independent oil and natural-gas producers. “It’s in everyone’s interest to make sure the wells that are orphaned and idle and not protected are brought back to production or returned to a state where the property can be used for other purposes.”

A few weeks ago, state officials went to unincorporated Athens to plug a deserted well. A portable rig with a 100-foot mast was positioned over the well to relieve its pressure and circulate both oil and water out. A truck filled with mud was parked in the 1300 block of 123rd Street. After the oil is removed, the rig will pump mud and concrete into the well’s casing to prevent oil, gas and water from reentering, permanently sealing the well. When the process is complete, contractors will dismantle and remove the large rusted oil tanks near the well.

Officials expect to stay busy in the coming years.

“There is still a lot of oil production left in the state,” Bopp said. “But the economics in the Los Angeles Basin are clearly [focused] toward surface development. There, the value of surface development generally exceeds the value of oil operations.”