At one time, Illinois was a top oil producer.

Today, that legacy is a $160 million dollar problem

Abandoned oil & gas wells pose environmental & public health risks.

For three decades, the state has mismanaged funds earmarked for minimizing the threat.

State records show the well extends 965 feet below ground, drilled in March 1916. Neither Rosborough knew who was responsible for it today.

“I don’t know what its official status is,” Jon Rosborough said, “but as you can see, they’ve not been here in a while, let’s put it that way.”

Thousands of similarly abandoned oil and gas wells are strewn across southern Illinois, remnants of a distant past when the state was one of the nation’s top oil producers. They litter farm fields, hide in woods and abut waterways. Many are called “orphans” by the state, their owners dead or unidentified, their companies bankrupted by a notoriously volatile global industry punctuated with booms and busts.

Left unplugged, some of these wells leak toxic chemicals hundreds of feet below the surface, potentially contaminating groundwater, and spit climate-warming methane gas into the atmosphere. They allow underground fluid called brine — several times saltier than seawater — to spill onto fertile farmlands, killing crops and leaving a virtually dead zone of soil that can take years to fix.

While oil companies are responsible for mitigating those risks by plugging wells that have stopped producing, there are nearly 4,000 abandoned oil and gas wells that are currently unplugged — holes, essentially, left behind for the Illinois Department of Natural Resources to close.

And for years, the state has fallen woefully short of the task, the Tribune has learned after reviewing hundreds of pages of public records and conducting more than two dozen interviews with southern Illinois farmers, oil industry representatives, environmental scientists and advocates. The paper’s three-month investigation found the state has mismanaged millions in operator fees designed to prevent orphan wells from becoming problems and has failed to document just how many abandoned wells exist.

CHART

Those who work in the oil business acknowledge the environmental threats posed by orphan wells and the role their industry has played in creating them. They admit that while some good-intentioned companies simply couldn’t survive when oil prices plummeted, there have been a few unscrupulous operators who, in past decades, have found ways to shirk their responsibilities for plugging wells once those assets become liabilities.

Still, industry representatives say oil production continues to play a vital role in southern Illinois, pumping millions of dollars every year into community coffers while extracting a crucial natural resource.

“Orphan wells are definitely something we take very seriously,” said Seth Whitehead, executive director of the nonprofit Illinois Petroleum Resources Board. “The vast majority of our operators do everything they can to address their wells when they stop producing and get them plugged.”

Consider, Whitehead and others say, that for the last 35 years, a portion of annual fees paid by Illinois oil operators has been deposited into a fund to plug wells and restore the land they once occupied. And yet, the state cannot account for where most of that money has gone over the years, only to say that much of it has been swept away for uses other than intended.

“We’re paying the penance for the people who didn’t follow the rules,” said Chuck Robinson, an Indiana-based oil operator whose company operates and plugs wells in Illinois, Indiana and Kentucky.

Illinois’ DNR calculates the cost to plug known orphan and abandoned wells in Illinois is $160 million. But in a state where 155,000 wells have been drilled since oil was discovered more than a century ago, and where most of the 23,000 or so active oil and gas wells today are considered “marginal” — producing less than two barrels a day — the price tag for plugging wells could end up being much higher.

In the last four years, Illinois received two separate federal grants totaling $50 million to bolster its well-plugging efforts through the Bipartisan Infrastructure Law under the administration of President Joe Biden, which earmarked $4.7 billion for similar efforts nationwide.

Environmental advocates and some downstate residents say much more is needed.

“If nothing changes, Illinois faces a perfect storm: aging wells leaking pollutants, rural communities left with contaminated land and groundwater and derelict well equipment that makes farmland unusable, and a state budget that cannot absorb the cleanup costs,” say the authors of a newly released report on unplugged oil and gas wells in Illinois, jointly created by the California-based environmental nonprofit ClientEarth USA and the Environmental Advocacy Center of the Bluhm Legal Clinic at Northwestern University’s Pritzker School of Law.

The 41-page report lays out what its authors call “critical flaws” in the state’s oil regulation, which have “created conditions for widespread abandonment of inactive and low-producing wells.”

Illinois’ DNR says it has done its best — often with limited resources — to protect the public from environmental hazards abandoned oil wells could pose while holding operators responsible for plugging wells before they can become orphans.

“As much as we can get people working with us to continue to be in compliance, the fewer wells (need to be plugged),” said Dan Brennan, director of the department’s Oil and Gas Resource Management division. “We’re all just doing the best we can to make sure everything is as safe as possible. … We try to work with all operators, and we try to do things as carefully and as thoughtfully as we can.”

PIC

A whiskey bottle and an oil boom

People have been trying to find oil under Illinois soil as far back as the 1850s. Some of the first wells were drilled a decade or so later in Montgomery and Clark counties. Despite some limited successes, commercial oil production wouldn’t take hold in the state until 1905, when two West Virginia wildcatters struck oil on a 50,000-acre farm in Crawford County.

A year later, three Pennsylvania men were supposedly searching for a place to drill on land leased from Crawford County farmer John W. Shire. After emptying a bottle of whiskey, the story goes, they tossed it over their shoulders, determined to drill a well wherever the bottle landed.

The well they drilled, called Shire No. 1, instantly yielded upward of 1,000 barrels of oil a day, catapulting Illinois to the nation’s third-largest oil producer.

Oil derricks sprang up seemingly overnight, as did the tent cities that housed oil field workers.

Production dropped sharply in the 1920s and ‘30s. By 1937, advancements in exploration and drilling brought a second boom to the state. Oil fields were discovered under land covering a dozen southern and southeastern counties. In Marion County alone, the Salem oil field produced 95 million barrels in 1940, which, according to the Illinois Petroleum Resources Board, made it the second-largest oil field in the country that year.

In referencing the oil field and the need for fuel during World War II, President Franklin D. Roosevelt is rumored to have said, “Thank God for Salem, Illinois.”

Illinois reclaimed its spot as the nation’s third-largest oil producer. Farmers, many of them having struggled through the Great Depression, were suddenly rich, leasing their fields to companies that would go on to have familiar names: Marathon. Texaco. Exxon.

An anecdote on the town of Salem’s website illustrates the change in fortunes. One young farmer had apparently been so excited by his newfound wealth that he drove his car into a pond. He had enough oil money to buy a new one the next day.

By the end of the year, the young man had bought three new Buicks.

How orphans were born

As the 1960s closed, the boom years were over.

National companies saw what was coming and looked elsewhere. To Texas and New Mexico, offshore and overseas. They sold their wells to smaller independent operators, some of them started by former big oil company employees who decided to stay in Illinois and strike out on their own.

These smaller operators gambled that, despite fluctuations in oil prices, their lower overhead costs would allow them to turn a profit even with lower producing wells.

Many did. Then the bust came.

Between 1980 and 1986, oil prices plunged 70%, throwing the industry into turmoil. Some Illinois operators went bankrupt or walked away from their leases, forfeiting the bonds they filed with the state in the event they could not plug their wells.

The state responded in 1991 with the creation of its plugging and restoration fund. Illinois operators pay an annual fee on every well they own: $100 per well for the first 100 and $75 for every well beyond that. At least half the money is deposited in the plugging and restoration fund. The rest is used for equipment such as vehicles, computers and gauges, as well as contract services and travel.

It’s unclear how much of that money has gone toward plugging abandoned oil wells since. Brennan, the state’s Oil and Gas Resource Management director, said he had been told by his predecessor that the state has, in years past, swept that money away for other purposes — a common practice in Illinois.

State law requires the department to submit yearly reports on plugging fund activity to an oil and gas advisory board. The department could only find reports from six fiscal years in the 2010s, Brennan said, adding that he was unaware of the requirement when he took the job in 2019.

The few state reports that have been compiled show that only a fraction of the funds have been used to plug wells.

“What I’ve been doing since I’ve been here is trying to make sure that we take any money we can for plugging and use it for that,” Brennan said.

Those assurances have done little to assuage the frustration felt by some southern Illinois farmers who have watched the number of abandoned oil wells that need plugging remain virtually unchanged for 30 years.

“It’s basically indicative of probably a failure in Springfield,” said Bill Rosborough, the Crawford County farmer and realtor who, along with other farmers, helped lobby for the state to plug abandoned oil wells in the 1990s. “It’s one of those things where it’s quite a ways from Springfield, and it’s not a high priority. The sad part is it’ll continue to get worse because they’re not going away.”