A private organization entrusted with money intended to protect Louisiana from the cost of abandoned oil and gas wells used funds to make below-market loans benefiting a senior state regulator, his relatives and the organization’s owners.
That’s according to a new audit of the Department of Conservation and Energy’s Orphan Well Pilot Program, an initiative under which oil and gas operators paid annual fees to the aforementioned private organization—the Louisiana Oilfield Restoration Association, or LORA—in exchange for financial security intended to cover future well-plugging costs.
Some conduct by former Office of Conservation Assistant Commissioner Johnny Adams “may have violated state law,” auditors say, though no one as yet has been charged with a crime.
The Office of Conservation entered into a cooperative endeavor agreement with LORA in November 2019. Under the agreement, at least 80% of the fees LORA collected was to be placed in operating and reserve funds, while administrative expenses were to be capped at 20%. LORA was required to build and maintain a $5 million reserve, after which some revenue could be used to plug orphaned oil and gas wells. Read more from Baton Rouge Business Report.
