State board awaits plan to cap well

PIERRE — The state Board of Minerals and Environment is waiting for a reclamation plan from the company that tried to drill an oil well three years ago in Pennington County near Wasta but failed to complete it.

The company, called Quartz Operations, received permits for two wells from the state board in 2013. The company attempted to drill one.

The drill broke and the bit remains in the well shaft. The drill hole remains uncapped.

The board required a bond of $130,000 to be posted for the first well. The second well wasn’t attempted. The $130,000 isn’t sufficient to pay for capping the unfinished well.

The state board during a June meeting at an ethanol plant near Aberdeen held an executive session and then voted to issue a notice of violation, according to official minutes from the meeting.

During that meeting, the state’s mining program administrator Bob Townsend said his office previously hadn’t issued a notice of violation for an oil or gas well.

Mike Lees, a mining program employee for the state Department of Environment and Natural Resources, told the board on Aug. 18 that the notice of violation was issued July 1.

He said the notice called for Quartz Operations to submit a funding plan by Sept. 1 and to plug the well Oct. 1.

The 30-day deadline to challenge the facts in the notice has passed, Lees said.

The company’s lawyer, Mark Ekse of Sioux Falls, responded with an Aug. 9 letter saying a funding plan would be submitted.

The lawyer was interested in whether the entire hole needed to be plugged or a single plug between the Minnelusa and Inyan Kara aquifers would be acceptable.

“We’re working on response now to clarify that,” Lees said.

Ekse in the letter said he thought DENR had accepted the company’s plugging of the well.

Lees said that wasn’t true.

The notice of violation said a contested case hearing would be scheduled for Nov. 17 if the funding plan and plugging deadlines aren’t met.

“Sounds like we’ll know more in September,” replied Rex Hagg of Rapid City, the board’s chairman.

Another board member, Bob Morris of Belle Fourche, asked Lees whether the company’s lawyer indicated what would happen to the bit that remains in the hole.

Lees responded that isn’t the concern. He said the violation is the unplugged hole.

The notice of violation and the company lawyer’s letter were released to a reporter after 5 p.m. CT on Aug. 18. The request for the documents was made at about 10:45 a.m. on Aug. 18.

Initially, Lees said he needed to check with the state Office of Attorney General, because it was an active enforcement matter.

At the board’s May meeting, Lees estimated the cost of plugging the well to a range of 3,000 to 3,800 feet deep would be about $2 million. The well was supposed to reach about 9,700 feet and pierce seven aquifers.

The woman behind the project was Natalie Ormiston, then of Deadwood.

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