BISMARCK — A coalition of North Dakota landowners released a trove of public records Tuesday, Oct. 26, that they argue reveals worrisome shortcomings in a North Dakota program that put tens of millions of dollars in federal coronavirus relief money toward cleaning up old oil wells.

In a report on the findings, the Northwest Landowners Association, a small group that successfully overturned a 2019 state law backed by the oil industry earlier this year, said that shortcuts and missed benchmarks in the initiative to use $66 million in CARES Act funds to plug and reclaim abandoned oil wells proves the state has underestimated the magnitude of environmental damages that are being left behind by oil companies.

“There is a large, looming problem on the horizon. If you do not address it, you will leave the landowners holding the bag,” said Northwest Landowners Association President Troy Coons in a press conference on his group's findings Tuesday.

Coons’ organization drew on some 70,000 pages of records it obtained on the well plugging program, which he said revealed a pattern of unfinished jobs and mounting evidence that the state's abandoned oil wells problems are "a lot more expensive than was being admitted to.”

In the early months of the pandemic, North Dakota leaders approved the use of tens of millions of dollars out of the state’s $1.25 billion in CARES Act funding to plug and reclaim old oil wells, some of which were drilled decades ago. State leaders and oil industry officials pitched the program as a way to address a longstanding, unresolved issue in legacy oil fields while also putting people to work in western North Dakota, where many lost their jobs in the wake of 2020's oil price collapse.

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While the Northwest Landowners argued that the idea was well-intentioned, they said it took oil companies off the hook for responsibilities to the farmers and property owners from whom they leased land and failed to address underlying regulatory problems that allowed for the accumulation of abandoned oil wells in the first place.

Katie Haarsager, a spokeswoman for the North Dakota Oil and Gas Division, declined to comment on the substance of the report Tuesday afternoon, stating officials had not yet reviewed it.

She acknowledged that the costs of plugging and reclamation under the CARES Act program have proven higher than originally estimated. While the division projected the costs between $80,000 and $100,000 each for plugging and reclaiming, Haarsager said the average well under the program came out to to $134,000 for the plugging process and $148,000 for the reclamation process.

In the last two years, the state put more than $42 million toward plugging and $29 million toward reclaiming oil wells, according data provided by the Oil and Gas Division, money drawn from both the CARES Act allocation and a state restoration fund. North Dakota has plugged 339 wells, reclaimed 181 and started reclamation on another 180.

Guardrails on CARES Act funding required the state to spend its cut by the end of 2020. With that deadline looming a year ago, Oil and Gas Director Lynn Helms said the state was not going to meet its goal to reclaim 380 wells before the onset of winter weather and proposed a reallocation of funds for oil industry fracking grants. Lawmakers approved that plan last October.

In a statement, Haarsager added the "primary goal" of the CARES Act initiative was always to keep North Dakota workers employed. By that metric, she said, the program was more successful than expected, putting over 3,300 people to work in the last two years compared to an initial estimate of about 1,200.

But the Northwest Landowners argued that the higher-than-expected costs of the well-plugging and reclamation program reveal North Dakota's situation as a warning for oil and gas states around the country, which Coons said are collectively sitting on "hundreds of millions of dollars or billions of dollars" in liabilities from abandoned wells.

Under North Dakota law, the state can issue “blanket bonds," which encompass multiple oil wells at once, as a way of insuring that companies will clean up well sites when they are finished with them. But the Northwest Landowners argued that the costs of plugging a well alone often exceed the bond amount. Rather than bonding groups of wells at once, the group has advocated for a process that would bond wells one at a time, a system that they argue would protect landowners if companies go bankrupt or abandon the site.

Haarsager noted the state strengthened its bonding requirements based on the higher-than-expected costs of plugging and reclamation under the CARES Act program and no longer allows an abandoned well to be transferred from one company to another without a single well bond.

In addition to higher than expected costs, the group's report argues that the state expanded the targets of its program beyond “orphaned” wells — wells that no longer have an owner and therefore fall to the sate for clean-up responsibilities — to plug and reclaim the oil wells of many companies that are still operating. That allowed financially healthy companies to relinquish their environmental responsibilities to the state and to taxpayers, the report argues.

The Northwest Landowners alleged that, in many cases, the state program has plugged oil wells but left them only partially reclaimed. The report states some property owners reported having their land incompletely restored from the presence of old wells, with companies telling them that they are not there to remove contamination from the ground.

Haarsager said that with the federal mandate to spend CARES Act funds by the end of last year, the program was never designed to have all reclamations finished by that initial deadline.

"We of course plan to work with the landowners on the reclamation of these properties," she said.

Just how frequently jobs have been left unfinished is not clear from the report. The Northwest Landowners published all of the records it obtained on its website, and Coons said they are hopeful that think tanks, policymakers and journalists will comb through the findings to reach their own conclusions, as well.

With North Dakota lawmakers slated to distribute another allotment of hundreds of millions of dollars in federal pandemic aid next month, Coons questioned how much of that funding will again go to benefit oil companies.

Readers can reach Forum reporter Adam Willis, a Report for America corps member, at awillis@forumcomm.com.