The Board of Minerals and Environment is still trying to figure out what to do about deadbeat drilling company Spyglass, which abandoned forty natural gas wells in northwestern South Dakota and drained its meager state bond on other expenses instead of properly capping those wells. We are suing Spyglass for $15.5 million, but at Thursday’s meeting, the board heard that Deputy Attorney General leading the lawsuit for the state, Rich Williams, is leaving the AG’s office. Spyglass’s principals were supposed to respond to the state’s lawsuit by July 27 and August 1, but no one from the AG’s office joined Thursday’s conference call, so the BME got no update on how Spyglass has responded or anything else pertaining to the effort to plug those geological and budget holes.
The absence of any representative of the AG’s office appears to have left dormant an issue that’s been hanging since March: whether or not the BME can use a bond from Quartz’s abandoned oil well project to cap the Spyglass wells. The BME asked the Attorney General to research that issue at its March meeting; they got no answer in April, and according to the minutes approved last week, the AG still hadn’t answered as of July 18:
Daryl Englund said the board has not heard from the Attorney General’s Office regarding whether or not it is legal to use the Quartz bond for Spyglass. The legislature needs to confirm whether the board can or cannot use the Quartz bond for this project [Board of Minerals and Environment; draft minutes of July 18, 2019 meeting; posted in BME agenda packet, 2019.08.15].
Without an answer, the BME has apparently decided not to press its luck with the Quartz money and focus instead on getting the Legislature to approve a solution.
As noted in Thursday’s meeting, action on the Spyglass issue has been slowed down by the departure of Steve Pirner from DENR. One would think that new DENR chief Hunter Roberts would be able to bring his experience promoting oil and gas to bear on this Spyglass issue relatively quickly, but perhaps moving his office decor up the street.