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The Seep Ridge No. 3 well never produced much oil and gas.
And it has been dormant since 2000 — five years after the well was acquired by a one-man Vernal energy company called Hot Rod Oil.
But in defiance of Bureau of Land Management policy, several Hot Rod wells remain unplugged and unreclaimed along with hundreds of other nonproducing wells on federal lands in Utah, according to a new analysis by a retired BLM official who conducted well inspections for the agency's Vernal field office.
Such "orphaned" wells unnecessarily enlarge the oil and gas industry's footprint on Utah's landscape, according to Public Employees for Environmental Responsibility, which released the analysis Monday. Uncapped wells allow disturbed land at well sites to go unreclaimed and could potentially pollute the environment, the group argues.
Stan Olmstead, a 20-year veteran of the BLM's Vernal field office who now lives in Tennessee, has compiled years of well status data related to four BLM field offices. His analysis identified 557 unplugged wells that haven't produced for the past 10 years. Most of the wells are in the Uinta Basin, administered by the Vernal office — the nation's busiest for energy development.
Vernal managers' "concern in reclamation was not the same as in permitting land use. This lack of priority of land 'health' is a failure to serve the American public," Olmstead wrote Monday in a letter to BLM Director Neil Kornze.
Utah BLM managers counter that the agency "has no greater priority than ensuring that energy development is done safely and responsibly," spokeswoman Megan Crandall said, "and that responsibility doesn't end when a well stops producing."
Olmstead's report dovetails with an Associated Press analysis released last year that found a large number of Vernal's "high-priority" wells are going too long without inspections.
Together, the reports suggest the BLM has fast-tracked development without sufficient follow-up to ensure the development is done responsibly and in the public interest.
"The main concern is finishing what was started," said PEER attorney Laura Dumais. "Whenever you set up any sort of energy-producing entity, you have to think about what's going to happen at the end of its service. We are pushing BLM to take a look and make sure the wells are getting reclaimed and capped off so they are not releasing methane."
On Monday, PEER also asked the U.S. Department of the Interior to audit the status of nonproducing wells in three neighboring energy-producing states —Wyoming, Colorado and New Mexico.
"Reclaiming abandoned wells is more than bureaucratic busywork," Dumais wrote in the request, "it is the epitome of good land stewardship."
Plugging a well requires pulling up the production tubing and cementing off the bore hole in key places to keep oil, gas and water from migrating between layers of the Earth's strata. The land is supposed to be recontoured, covered with reserved topsoil and reseeded with native vegetation.
If all goes well, the BLM returns the operator's bond.
To do it right costs about $100,000 per well, according to Olmstead, who believes the work should be considered a cost of doing business. But too often, he said, the BLM lets small operators like Hot Rod owner Mark Peterson off the hook.
"There was always a reason why he couldn't get it done," Olmstead said.
Olmstead's list of unplugged wells also features the names of the basin's biggest operators, including QEP Energy Co., EOG Resources and Kerr McGee Oil & Gas.
Other problem wells are administered by the BLM's Moab, Price and Salt Lake City offices. Each well site covers four acres, meaning the unplugged wells account for 2,228 acres going unreclaimed, Olmstead said.
All told, he identified more than 1,300 nonproducing wells for the four Utah field offices that have been abandoned or "shut in."
Individually, the wells do not pose an acute risk to the environment, but collectively they are a chronic problem that will require millions to fix, according to Olmstead.
Sometimes companies temporarily shut in wells during periods of low prices or for technical reasons. But after five years of nonproduction, especially during periods of high prices, operators should start plugging procedures.
Olmstead believes some operators just walk away from wells that have little hope of ever yielding paying amounts of oil and gas.
"Once they abandon a well," he said, "they forget their obligation, and it sits there forever."
Since 2000, Crandall noted, the BLM has permitted 47,00 wells to be drilled on public and tribal lands nationwide and currently oversees 100,000, each requiring inspection to ensure regulatory compliance.
She said Utah's BLM field offices will continue striving to reclaim nonproducing wells.
The unplugged wells featured in Olmstead's report date to the 1960s and '70s, an era when well-construction standards were far more lax than they are today.
Hot Rod Oil's wells are a typical story: A big energy player first develops a field, then hands it down to much smaller operators after production tapers off.
Texaco drilled the Seep Ridge unit 60 miles south of Vernal, tapping the Dakota formation in 1975, then sold the asset to Bar Mesa Resources in 1987. That small Roosevelt company sold some of the wells, including No. 3, to Mark Peterson in 1995, according to data maintained by the Utah Division of Oil, Gas and Mining.
Hot Rod reopened the No. 3 well in 1999 and was able to reap a grand total of 4,209 thousand cubic feet, or MCF, of natural gas — worth about $1,200 at today's prices — before shutting it down in 2001. It has remained unplugged ever since.
During his years as an inspector from 1992 to 2012, Olmstead tried to get Hot Rod to clean up the well sites, then unsuccessfully urged BLM supervisors to forfeit Peterson's meager bond.
"He had no resources to manage these wells," Olmstead said. "He shouldn't be in the business, but we let him continue."
Attempts to reach Peterson on Monday were unsuccessful.