The people at the Utah Division of Oil, Gas and Mining are pledging to do better.
They really can’t do worse.
The Legislative Auditor General’s office last week gave the division a smack across the forehead after finding that not once in the last quarter century had it fined any oil and gas producer for breaking the rules.
To be clear, no one is saying oil and gas operators didn’t break the rules. They just didn’t get punished for it. The division acknowledges creating a “culture of noncompliance” and admits as many as half of small operators are not meeting its requirements. As a result, there are perhaps hundreds of fouled drill sites and wastewater dumps around the state that need to be addressed.
This audit also prompted an unusual admission from the head of Oil, Gas and Mining: the feds have been doing it better. It’s a Utah mantra to say that state bureaucrats operate more efficiently than the federal government, but Director John R. Baza acknowledged two things: First, the division’s coal program works better because it was required to adopt federal enforcement standards, which the oil and gas program wasn’t. Second, the U.S. Bureau of Land Management has been doing a better job of enforcing and requiring fines of bad operators on BLM lands.
As suspected, when the governor and legislative leaders say that state environmental regulation is better, what they’re really saying is state regulation is less. In this case, less means more pits full of stinky, greasy wastewater in places God never intended.
It will take time — not promises — to see if the division can fix this. That is because it still will be the same people in charge. The director has brought in a new person over oil and gas enforcement, but it’s someone who has been with the division for a dozen years. Change will have to come from those who let this happen in the first place.
Baza also acknowledges the state’s bonding requirements may not be enough, and already taxpayers are on the hook for about $1 million to clean up sites where the bonds weren’t adequate. Big companies with clean records do 90 percent of the oil pumping in Utah. The bad players are small producers who, frankly, aren’t going to survive the tumult that is coming to the industry.
And, more than just bonding, the division has operated under the fallacy that they’re better off letting marginal players continue to operate so they have cash flow to clean up their dirty operations. That is betting on a future that will never come.
If the dirty operators can’t clean up their acts now, they never will. This audit must be followed by a burst of fines. Anything less will be business as usual.