Utah’s Oil and Gas Division Has ‘Alarming’ Lack of Oversight

Utah’s Oil and Gas Division Has ‘Alarming’ Lack of Oversight

  • A blistering legislative audit of Utah’s oil and gas division found it “alarming” that regulators are not carrying out their state-mandated oversight of nearly 200 drilling operators, letting violations go unresolved for years and not forcing the cleanup of environmental contamination at waste disposal sites.
  • The Division of Oil, Gas and Mining “has not adequately fulfilled” its responsibilities outlined in statute and administrative rules, the audit says. “Over 100 noncompliant issues remain unresolved and administrative rule has not been consistently enforced […] With the risk of long-term impacts to health, safety and the environment, it is alarming that the oil and gas program has not more diligently fulfilled its regulatory responsibilities,” it continues.

Specifically, the audit found:

  • 105 noncompliant wells for which violations, or noncompliance issues, have not been resolved.
  • Violations are required to be resolved in 30 days, yet some are nearly 3 years old.
  • Unresolved environmental contamination at two waste disposal sites, one of which has likely been going on for an extended length of time.
  • Taxpayers on the hook for nearly $1 million for abandoned wells or shut-in wells that have not been reclaimed by financially unstable operators.

The audit was released Tuesday as it was presented to members of the Legislative Audit Subcommittee, with several lawmakers asking tough questions and finding its conclusions troubling.

The state agency and division directors were quick to assure lawmakers changes in the regulatory environment are already underway and they are committed to change.

“It isn’t enough to say we recognize we need to improve,” wrote Brian Steed, executive director of the Utah Department of Natural Resource, which oversees the Division of Oil, Gas and Mining, and the division director, John Baza, in response. Steed and Baza wrote a detailed two-page list of proposed actions the division plans to take.

The division has regulatory oversight of 193 unique oil and gas operators in the state, with 20 of the largest operators producing 98% of Utah’s oil. There are 16,141 active wells and 29 waste disposal facilities.

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