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NEWS BULLETIN

August 14, 2018 --- Vol. 24, No.20August 2018

AOGCC proposes substantially increased bonding

The Alaska Oil and Gas Conservation Commission has been reviewing its bonding requirements for drilling in the state - currently a minimum of $100,000 for one well and a minimum of $200,000 for multiple wells.

Commissioner Cathy Forester, who has been leading the AOGCC charge on wells left unplugged and unabandoned in the National Petroleum Reserve-Alaska, and commission Chair Hollis French told legislators in March that costs to plug and abandon wells - should the state be required to do that work - vary widely depending on the well's location.

The commission has held workshops on bonding and today issued proposed regulations which substantially increase required bonding. The new minimum would be $500,000 for one to two wells, with increases by the number of wells an operator has in the state: $800,000 for three to four wells, $1.1 million for five to six wells and capping out at $30 million for 3,500 to 3,999 wells.

The commission said the proposed bonding changes would increase "the minimum bonding amount to more accurately reflect the costs of abandoning wells by establishing a multi-tiered bonding schedule based on the number of wells an operator has."

The commission has scheduled a hearing on the proposed bonding changes for Oct. 16 at its Anchorage offices from 10 a.m. to 2 p.m. and said it will accept written comments through 4:30 p.m. Oct. 16 as well as through the end of the hearing.

The commission said the proposed regulations would be available on its website at http://doa.alaska.gov/ogc/.

- KRISTEN NELSON

See story in Aug. 19 issue, available online Friday, Aug. 17 at www.PetroleumNews.com

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