BLM inspectors cover lots of ground checking wells

James Fenton
The Daily Times

FARMINGTON — Strictly by the numbers, you might think it impossible for fewer than two dozen Bureau of Land Management inspectors to oversee the more than 21,000 wells on federal land in the San Juan Basin.

Virgil Lucero, a BLM Farmington field office inspections supervisor, says his 21 — down from a standard staffing level of 25 — inspectors can personally visit every well pad in the basin and on parts of the Navajo Nation every four years.

"We are a little short, and with the budget (cuts), we haven't been able to hire any inspectors," Lucero said. " We get 100 percent of (the wells) every four years in the basin."

Lucero said for the last two years, the Farmington field office has met or exceeded its goals for oversight of its royalty-bearing wells.

Called petroleum engineering technicians, Lucero's inspectors ensure the federal government collects its one-eighth — or 12.5 percent — royalty on the revenue from 21,280 active wells producing oil and gas on public lands and 1,080 wells on the Navajo Nation. He said they also ensure production facilities follow the government's regulations to ensure protection of the environment, wildlife and condition of well pad equipment.

Last year, Lucero said BLM inspectors issued 718 noncompliance violations, a number that has been about the same each year over the last decade. By January, all 718 were resolved, most of them within 20 days, he said.

The Western Energy Alliance, a group that represents the oil and gas industry, said most operators in the basin are doing their best to follow regulations on public lands the BLM oversees, and though some violations occur, they pale in comparison to the number of well sites running without incident.

"All companies understand the need for inspections and have a huge interest in seeing that they are following regulations," said Kathleen Sgamma, Western Energy Alliance vice president of government and public affairs. "Companies are trying to comply with thousands of different regulations — from the environment to safety. Once in a while they do find a violation of something, but most operators are trying to do everything right and efficiently and ensure operations are accountable and safe."

The BLM federal office in Washington, D.C., rates wells on four criteria, Lucero said — the volume produced, the last inspection date, whether a site has missing monthly self-reported production reports and whether the site has any violations. The wells are then classed as either low- or high-priority, which Lucero said affects how he draws up his inspectors' field schedules and areas of focus.

Despite budget constraints and fewer inspectors on hand, Lucero insisted that the inspections show that well operators comply with federal regulations. And inspectors are well-trained, he said.

To stay updated on the latest technology, and to increase efficiency and improve the accuracy of data collected, Lucero said inspectors take courses in oil field calculations, oil meter analysis, royalty calculations, gas measurement and auditing at BLM's National Training Center. And they must be recertified every five years, he said.

Petroleum engineering technician Dustin Porch has inspected wells on the basin's federal lands for the Farmington Field Office for the last two years.

Bouncing along the winding, rain-eroded gas field roads in his oversized white truck, Porch could easily be mistaken for an oil field worker.

But one look inside his truck and it's another story.

Outfitted with a dash-mounted laptop computer, hydrogen sulfide detectors, a phone book-thick BLM regulations manual and an above-average grasp of algebra, Porch oversees the life of the wells in his target area. He visits an average of 15 facilities a day, working four 10-hour workdays each week.

"Our job is the life of the well. We inspect when they drill, produce and plug," he said while driving up to a well pad off Light Plant Road north of Aztec. "We're charged with production accountability.

Porch checks everything from an oil tank's levels, to determine royalties, to its condition, for safety. He consults websites for the Office of Natural Resources Revenue and the state Energy, Minerals and Natural Resources Department's Oil Conservation Division and inputs the data he collects.

"We're all there, for a common goal," Porch said while checking a hydraulic fracturing, or fracking, well pad.

Porch, who uses a combination of high technology and everyday items — he uses talcum powder on a measuring tape to check liquid levels on some of the tanks, said violations can be high-priority, such as leaking or broken equipment, or lower on the scale, including faded or flaking paint or trash left on site. "Most operators are up to code, but some you have to keep after. Inspections require common sense to resolve an issue. It's in their best interest to follow what the code says, but things can happen. Not everyone's perfect."

Overall, Porch said a majority of the operators he oversees follow regulations and report accurate production numbers, but some have more trouble than others keeping facilities operating legally.

"I've seen some funny stuff," Porch said. "Some of it, you can tell its a financial situation, with some of the smaller operators. Violations like a broken seal stuffed with the plastic wrap from a case of bottled water or an old T-shirt. Sometimes you find holes in the mesh covering a production pit, bird and bat cones missing off of heater stacks, which can injure wildlife. There's a whole range."

The most common violations include broken parts on equipment, inaccuracies on production reports, missing mesh covers or screening for wildlife or vandalism that hasn't been cleaned up, he said.

Mark Kelly, BLM environmental protection specialist, said the field office is able to keep up with its oversight.

"Are they pulling wool over our eyes? No," Kelly said. "We've trained our guys. We have to pass tests to keep our jobs. We're inspecting every day. Each inspector has their own areas. They compare numbers with operator reports. If they were given misinformation on reporting, we would find out. They're not out asking for them, they're out getting them."

Companies have to voluntarily report production numbers each month, Kelly said, which inspectors compare against numbers they report to ensure the federal government collects the royalty dollars it's owed.

Any discrepancy triggers a non-compliance letter the BLM sends to operators, which allows for a certain number of days — usually 20 or fewer — before the BLM activates a formal audit.

"We do send a lot of non-compliance (letters) to operators to assure that they are staying within our regulations," Kelly said. "If you don't fix it, it could turn into an assessment. We find where they haven't paid royalties, and they'll have to pay it back. We're out there to try to get compliance, get royalties and protect our environment and our lands. That's our main goal."

James Fenton covers Aztec and Bloomfield for The Daily Times. He can be reached at 505-564-4621 and Follow him @fentondt on Twitter.