Welcome to the sail ring a podcast dedicated
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Welcome
to the sail ring.
Alright. So we're back
in the Sail ring studio. We've got
a gentleman with us out of Texas today.
We're gonna talk about
the oil and gas industry, but something that
can be very viable, very useful for property
owners and
realtors,
their clients, you know, anybody that's moving property,
we wanna introduce, mister Blake Scott.
Blake, are you with us?
I surely am Sean. Yeah. So, Blake, thank
you. First off for being here.
Blake represents a company,
waste analytics
Llc and more importantly to what we're gonna
talk about on the podcast show today is
well fax
reports, property reports that
they refer to as well fax
reports, and we'll get into that and explain
what those are. But
Blake, we we wanna thank you for taking
the time to be with us on the
podcast show. And if you wouldn't mind, just
tell us a bit about Blake Scott?
Sure. Thanks for first of all, thanks for
having me.
You know, some background on me and and
what led up to this. In 19 93,
I started an oil field service company calls
Scott Environmental services.
And it mainly dealt with the drilling waste.
We focused on drilling waste because it's the
largest solid waste generated bio upstream oil and
gas.
And it usually,
you know, the drilling waste is disposed on
the surface as opposed to being injected like
produced water or something like that.
And this means that the drilling waste has
the potential to impact soil and groundwater. Mh.
So once we determine that that we were
gonna focus on drilling waste, we began to
look at how it was being specifically disposed.
And those methods consisted of,
some pretty kinda down and dirty things like
burial, land spreading and rope spreading. And and
some of that still goes on the day
you're a lot of that but actually.
But based upon the contaminants in the waist,
which are salt, heavy metals and hydrocarbons, we
thought there's gotta be a better way to
deal with it.
So,
we started doing some research with some people
at Texas a and M, and we focused
on a technology call simplification and stabilization.
And, we realized that
really through that research, we could recycle the
cutting to build each roads and drilling pads
and that was different than anything being offered
by anybody else. And so we applied for
a patent on the process, which we later
received.
But we also had to get permits in
each state in which we operated. So through
all of that, I I learned a lot
about their types of drilling waste, like saltwater
drill cutting, and diesel based drill cutting.
And the volumes of drilling waste, that's being
generated and what was in it,
and the different disposal methods used for it.
With our with our recycling method, we we
actually processed hundreds of thousands keeping yards drilling
waste and built hundreds of locations and tens
of miles of road.
But, you know, the 20 15 comes around
and
the oil and gas downturn is kinda beginning
to be in full play. So I started
looking at other areas to apply what I
hadn't learned.
And I I realized there's no national repository
of drilling waste data. So in other words,
there was no place to go and and
actually,
look at what was being generated.
In fact, most states don't even track it.
Therefore, I started another company, call waste analytics,
which is what we're talking about today,
that began collecting and driving data on drilling
waste that was being generated in the Us.
And through that process, I became familiar with
the forms and reporting methods of various oil
and gas information.
That each company reports the state regulatory
agencies. We also work with an academic on
looking at the causes of well plug failures,
which kinda at the time didn't quite fit,
but later on,
as we'll talk about it actually does.
The result
of all that was a wealth and knowledge
on collecting oil and gas information and information
on potential issues that might arise
from oil and gas operations.
So in short, from Scott, environmental and working
at waste analytics, I developed a deep background
in oil and gas waste, oil and gas
reporting and data collection and potential issues both
past and present.
Blake, but before you move on,
explain just for the listeners, what, a well
plug failure. May give us give us an
example. Sure. Yeah. Sure. So,
you know, when you first of all, you
drilled a well and and you have to
do well construction,
which basically is how the the well is
engineered.
And then you produce the well, and then
at some point, the well becomes une economic
to produce.
And so by law, you have to you
have to seal that well off, and that's
done
by various methods.
But, usually,
cement is it's mainly used and and all
of that process to seal it back off
is called plugging.
And so
You know, if you think about it, the
well construction
and the well plug,
that's all engineered, and and the
Practices for doing that, the engineering principles for
that have evolved over time and the rules
that each state has to do that have
evolved.
But you're still using for the plug and
a lot times for the construction of the
wheel itself.
Cement to be able to hold in any
type of
you know, production, material like oil or natural
gas. From coming to the surface and impacting
the surface or impacting groundwater.
But since Cement is 1 of the main
things that used,
if you think about it,
you know, cement being a a part of
concrete,
concrete cracks will so does need cement. Yeah.
And so, you know, a failure can be
that you develop issues where those production fluids
and gases can actually migrate back to the
surface and breach that plug, and that's a
well plug failure.
Very good. Very good. And we'll we'll get
into more of of why that's important as
1 example of where, a report of where
those
because those plugs aren't always visible. So, you
know, as we get into this show, I
just... I I wanted you
to explain that because that's gonna become very
relevant in this conversation.
Oh, Absolutely, Sean. I mean, and the reason
they're not built visible, it is because when
you do plug that well, you cut the
you cut the visible part of the well
off below grade. So, you know, it's really
can be and typically as 5 feet or
more below the surface of the ground.
So you don't know that you don't see
it. It's not visible.
Yes, sir.
So will facts is,
you talked about the downturn in the oil
and gas market and maybe looking at other
other provisions, other services that could be provided
as an offs shoot of,
what you were currently doing at the time.
Yeah. I think it's kinda interesting. You know,
at the same time, I was building Scott
and then waste Analytics. I I began buying
land around my family's farm east Texas.
And through acquiring that land, and then, of
course, you know, my background and oil and
gas. I noticed that plug wells were not
entitled work and not shown on surveys.
Because as we just talk about, you know,
their... The plug wells aren't invisible.
And therefore, I began to think that information
on the wells was something that was really
needed by real estate buyers.
In areas of oil and oil and gas
production. So
I begin to research various aspects of what
a real estate buyer might need to know
about that activity.
And, you know, if the issue was even
widespread enough to to be concerned about. So
I first,
began to
look at, you know, how how widespread is
it. And and I found that there are
over 3 and a half million wells
that have been drilled onshore in the Us.
And these wells are not just in traditional
states, You know you think about like, Texas,
Oklahoma, etcetera, but
They're also
in other states that probably shock people, Michigan,
Illinois, Washington, Florida,
And so the geographic extent of past and
present oil and gas wells was far greater
than what I thought.
For reference,
the the Us energy information administration lists 34
states that produce oil and gas.
That doesn't include the states where drilling occurred,
but production is no longer active. So really,
what that means is there are wells and
the majority of states in the Us. And
and a lot of people just aren't aware
of that.
To look at that a little bit more
in depth, and this is kind of a,
you know, something that's really important. Of the
3 and a half million plus wells been
drilled.
Only about 40 percent have been plugged.
In contrast, in 20 22,
there were about 912000
producing wells.
But of those,
658000
we're producing less than 10 barrels of oil
per day.
Which means that 72 percent of producing wells
are producing less than 10 barrels per day.
So they're getting close to the end of
that economic pie. Yes, sir. Right. Yeah. So
if you... You know, you added the plugged
wells and the producing wells
together that still means there's still another million
plus wells
that are idle
on top of that, meaning they're not doing
anything. They're just sitting there.
So, you know, all of that together, if
you look at all that in in total,
you know, there are a lot of plug
wells and wells that'll need to be plugged
in near future.
And that's kinda of the genesis of looking
at well, okay. This is a widespread issue.
And these are going to be
increasing
in the number of wells that have to
be plugged or that have been and there's
issues with them. And the other side of
that equation is as we're on a huge
growth boom in the housing industry right now.
We're raw land and developmental land
is absorbing more and more of that prop
requiring more of that property. The question is
what's immediately underneath the surface that you don't
know about. Out there. You don't wanna find
later that's accidentally. You wanna you don't wanna
build a house over the top or something
say, well, I would have never
develop this or built my home here had
I know in that. So, yeah. There's Yeah.
It's it's perfect timing.
Yeah. That... That's right. And, I mean,
also, you know, from my oil field service
days, I knew that the the vast majority
of oil and gas waste is exempt from
hazardous waste rule.
And interestingly, which I'll talk about in just
a little bit further a minute, but petroleum
products are excluded from the federal super fund
law.
So what that means is that it doesn't
mean the waste is not harmful. It just
means that it's governed by another set of
rules.
And those rules typically are state rules.
And so,
you know, when you start thinking about that,
Okay. We got all these wells and all
these different... States and they're they're being governed
by state rules. So you have a patchwork
of rules
that are kind of governing this stuff, which
makes it a little bit more difficult
to try and understand the impacts of that.
Right?
Another thing I looked at was
I knew that the mineral estate is often
separated from the surface state.
And basically, that means that the owner owner
of the surface is usually different than the
owner the minerals. Right.
So at this point, it kind of became
clear
that there are a lot of wells with
many being plugged idle. A lot of potential
for contamination issues and the surface is where
potential contamination would appear.
So
the... If if you dis distilled that, the
result of all this is that the surface
owners are the ones that bear the burden
of dealing with contamination.
And this is kinda of where the most
alarm points is a property owner because if
you own the surface,
and no minerals,
you got virtually no money from the mineral
estate, but take all the risk on damage
to your asset being the property,
if
contamination arises. Yeah. Well stated. Well stated. So
you basically are getting none of the benefit
and and in...
But all you're getting all of the risk
in in the... Yeah. Yeah. Well... So it...
Okay. So that's a wonderful... That's that's a...
That's great job. A great segue to how
how do we mitigate that risk? Mh. Yeah.
And and, you know, 1 of the first
things I I looked at from that point
was
you know,
insurance because that's a risk mitigation method. Right.
And that's usually like a line of defense
for issues that arise, and I discovered that
homeowner insurance in normal general liability on our
property.
Doesn't cover
contamination or issues from plug oil and gas
wells.
So
all of a sudden, that means there's even
more liability that the surface owner may have,
and it would be difficult to to transfer
some of that liability to insurance.
So, you know,
that that all led me to think okay.
That there there's something here
that really needs to be looked at, but
is this occurring very often, you know, any
issues.
And
What I found was to put it bluntly,
their plug well failures and issues with old
pits that have been and are occurring all
over the Us.
And so with that in mind,
that was the genesis of Will facts.
Right.
So I guess 1 of the questions I
would have is,
if I'm a listener right now is what
what are you looking for in in Wealth
fax, Like specific data that most of the
clients find valuable
Sure. Things that are are found in these
well fax reports that hopefully, you get a
clean Bell of health. You know, there's there's
not much there. But when there is, what
typically pops up that is of concern.
Well, you know,
that's a fantastic question
you know, as with any asset, including real
estate, the buyer
and owner wanna know the risks. So what
are the risks and how do you manage
it?
Who put simply risk is something that creates
or suggests a hazard and risk management is
either how to avoid it, reduce it.
Transfer it or accept it. K.
And,
you know, I have some people that think
that just getting the locations of the wells,
all they need to know.
And then they can find out where the
wells are on state regulatory Gi maps.
I find that kinda interesting because you need
far more than just that,
than no 1 just the location. And also
regarding a location, most state Gi maps have
approximate locations because the vast majority of where
of wells are old,
and they didn't use latitude and long for
location when they were drilled.
The locations were from survey lines,
so they could be off.
But even if you assume that the well
locations correct,
that's only the beginning. So using an analogy,
the well location would be like, going to
the doctor and saying, I I have a
lump under my and having the doctor check
it and say, yeah, you do.
Well, and nobody nobody's gonna stop at anymore.
Yeah. Yeah.
The the
is. Yeah. You know same applies to oil
the gas. Your know reason suggest that you
need to know a great deal more about
oil and gas wells, so you know the
risks and how to manage the issues.
To address the risk, customers really want need
detailed information about the wells themselves,
any pipelines for Oil and gas that are
there,
about all this oil and gas activity. So
that is where well fax comes into play.
All of the data, we report extremely valuable,
but what's critical to know
is information about the wells themselves, including the
location. Right. But information on the well, like,
when was it drilled Mh. The status of
the well?
You know, was is it active? Is it
plugged? Is it idle? Well, tyler. Let me
let me break in real quick. So the
time period could be very critical because technology
has advanced and changed a lot. And maybe
this
plugging procedures, and the way they cap those
wells off and closed them in was different,
you know, 50 years ago than it is
today.
So I I would think that that time
period would be very relevant as far as
the potential for leakage or.
That is that is absolutely right. You know,
as an example, I
I did a report
several weeks ago,
for somebody that
they had
a piece of property that... And they they
wanted to have a 100 foot perimeter view
as well.
And so there were 3 wells on the
proper on the property and hundred foot perimeter.
2 of the wells you're
drilled. 1 of the well... 1 of the
wells was was on the property line and
the other 2 wells were within the 100
foot perimeter.
2 the wells were drilled in 19 33
and 1 in 19 34,
and the company that drilled the wells had
sold them to another operator who had plugged
them. All 3 wells were plugged in 19
58.
So the wells themselves were not visible on
the surface since they were plugged.
When we looked at the wells further, they
were clearly constructed to a very old standard.
And they were also plugged to an old
standard.
Also,
neither the company that drilled the wells or
had plugged and was still an active operator.
Yeah. And that that helps. Yeah.
She have. Yeah. So you can you it
that. So the responsible party's is not around
anymore either. Yeah. That's right. So that... They
know, that's another layer of risk. So that
meant that the buyer, you know, should be
concerned about potential plug failure due to the
age of the wells and the age of
the plugs.
And then also
who to call? Yeah. So in a case
like that, where there is no longer an
active operator.
Especially like in a plug well case, you
know, in as an example in Texas,
whoever plugs the well is responsible for that
plug in. Perpetuity. But if they go out
of business, who do you call.
In that case, that turns to the state.
So the state would be responsible for any
plug failure.
And then if you address it, if it
causes
contamination, the state would also become involved in
contamination issues. But those types of things,
you can imagine,
change if you have an operator involved that,
is responsible to have to come in and
and look at that versus the state because
the state
maybe slower about addressing that and say an
operator might have to be. No way.
States are slow at responding to things. Yeah.
Who would figured Yeah. Who would thought. Right.
Blake, let's let's back up a step further
though is there there have to be
homes or or
constructed properties
built over,
closed wells. Mh.
Plugged abandoned whales, plugged wells
that
they just... They have no idea. What's underneath
of them. So it all starts with even
identifying that there's an issue. If you're getting...
If you're not utilizing your groundwater. Like, for
your drinking water, you know, and you you
haven't...
I'm I'm trying to think of, you know,
some of these these old,
movies and court cases that derived from
environmental
impact, you know, something a hazardous
materials have gotten the water system or whatever.
But let's say you're on the outside of
city, you're you're you're on city, water. Mh.
You don't really know that the soil that
there's contaminants around you because, they didn't go
through this process. So they didn't have, you
know, a well fax port, they didn't identify...
Well, you know there used to be an
oil field right underneath of you. And right
beside you. And if you dig a well
out here or you're utilizing ground water.
You may wanna pay special attention to that.
So... We know I mean, a common sense
would tell you that that's currently going on
in America today. Right?
Oh, it it is. And I have examples
of that where where that has occurred and
his occurring.
It's really it's really fascinating
there
Yeah. So can I ask you real quick
before you move on? How would you determine,
like, what is if I initially approach you?
And I said, I've got a property I'd
be interested in having you scope out for
me.
How how do you take maybe that... What
is the geographic
you know, approach to saying
there's nothing in this area, or it actually
deserves more attention. There was,
historically a well filled. Because 1 of the
questions I was gonna ask you early on
is, like, what geographic areas do you serve,
but I think more importantly is as you
approach, you know, an initial
consultation with a client,
how do you start reeling in whether your
services need to be applied to that area
or if maybe that area just in your,
you know, cursor research, it said there's really
nothing has ever
transpired here. Because there are parts of the
country where there's been no
E p work, you know, historically ever done.
And Yeah. You said the 34 states had
oil production history, and that means there states
out there out of the 50 that, you
know, aren't on that. So. Yeah. That's right.
Well, that that's interesting.
1 of the things that
that we have
really are just about to
implement again
is looking at,
offering, right now, we have 2 reports and
we'll get in talking about those in a
second and what they're geared towards. But We
were also,
beginning to offer a service that
just identifies as kind of by Zip code,
whether or not there's activity or not. Yeah.
Whether or not you should even perk up
and think about it or not. Yeah.
Yeah. And so, you know, if you
if you gave us Zip code that you
were interested in, We would just reply with,
you know, there... There's no activity
there's low activity, There's medium activity or there's
high activity. Yeah. And so from that perspective,
you know, you would be able to determine.
Okay.
I,
I know I'm in an area that doesn't
have any activity.
But then...
And you could just move on and and
not requesting anything else. If you had a
Zip code that
had low medium or high activity at that
point, then you could proceed to either choosing
1 or the other of the second reports
that we have. I mean, you know, as
an example,
homes,
definitely that falls into when you start getting
into a rural property. Mh. That's a little
bit different.
And and I'll address that with our second
report in minute. But
if you think about, say,
agriculture, I
agriculture is fascinating
when it comes to
well facts because there are really only certain
areas that agriculture is going on.
And
it says though you can't avoid if oil
and gas activity has occurred in those areas,
you can't avoid being
involved in having to address what may be
on that property because that that property may
be in some of the most productive ag
areas there are. Yeah. And it's kind of
a situation in those situation... And then those
issues where it's where ag colliding with oil
and gas. And you also have areas where
homes are colliding with oil. Yes.
But then as you pointed out, there are
other areas where that's not, and
I think that somebody we wanna take take
advantage of our other service we're about to
come out with that you can just ask
about, a, Zip code, and then we can
let you know whether or not the level
of activity and you can decide how to
proceed.
Clarification on on this question. So if you're
1 of those areas that's very heavy egg
and, obviously, there may be some
agricultural,
you know, if, like, fertilizer chemical runoff off
things like that.
Does... Your well fax reports and stuff, is
it strictly in oil and gas research and
data or do you delve into agricultural
anything to to do with ag related properties?
We do not delve into anything
other than we provide
just generally what the soils are in the
area. And the reason why we do that
is because the soils are important
if you have a leak.
And what I mean by that is if
you have a very heavy clay oil,
your
contamination is going to move horizontally.
Because it can't infiltrate the soil profile very
easily.
So you're gonna have more of a lateral
extent.
If you have a very sandy soil, it's
gonna move down through the profiles, you're gonna
have more of a vertical issue.
That makes perfect sense.
So, you know, I mean, those are the...
Even though, you know, going back to the
geographic issue. We we serve every state
in the Us. And
it's important for somebody really
regardless of where they are.
To
take advantage of our services, including what we're
about to roll out regarding Zip codes because
that way, you can feel comfortable about whether
or not.
You know, there's something you need to address
or not with 1 of our other reports.
Right. Blake, this is great information.
There's a couple of different reports of there
Wealth fax Prime, Wealth fax Pro. I'd like
to get into that. I know you've got
some great case studies and things to talk
about Let's hear from our sponsors real quick.
We'll come back in just a few minutes
with more from Blake Scott and Well fax.
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While we were on break, we were talking
with Blake
about
phase one's,
phase 1 and environmental
reports. Blake
elaborate a little bit on that because I
know that's got play into this conversation.
And in some instances in a big way,
That would be the next logical step.
Yeah. That's that's a a really interesting point
because,
you know, I I know people get phase
ones, especially like on a commercial piece of
property. And
the genesis of a Phase 1 had to
do with the federal super fund law. Mh.
And,
Ast
developed a a methodology to deal do that.
And these ones really are addressing as a
a list of environmental
issues that might arise and actually it comes
from a checklist from the Ast
methodology.
And even though they get into a lot
of things other than oil gas.
They don't provide the depth of oil and
get gas information that we do.
And you know, that's a
that's kind of interesting because what we're trying
to address or what the real risks are.
And that's not to not phase ones because
they're fantastic for what they do. But
from the perspective of Oil and gas, they
may or may not identify wells, both old
and new. But regardless, they won't tell you
about anything. They won't tell you anything about
the wells other than possibly
the status because
phase one's follow a checklist, and there's nothing
from that Ast checklist that says what must
be reported about oil Gas. So if you
go back thinking about risk.
There's nothing there that's specific for them to
say about what their risk is. So that's
why our customers find that what we provide
on what patients that oil and gas activity
and knowledge about the wells
is what helps determine present and future risk.
And phase ones just don't get to that
point.
Is... This is so the phase 1, and
then I know that that moves a little
bit if... And and if you can, if
you could clarify,
the differences maybe just real quick, like phase
1 phase 2
because my my understanding phase 1
and environmental
report, a phase 1 report is more of
just
almost cursor. It's it's visual. It's looking and
saying, is there is there something here that
warrants more
attention? Is that accurate?
That that is accurate.
Phase one's do
even though they are cursor,
really what they do
is look at... They do the leg work
on looking at
various
databases
to determine if there has been some type
of environmental issue on that property.
So if there had been a hazardous waste
issue on that property.
A phase one's going to identify that.
And
it... Then they do... They go out and
do a visual inspection.
And they also talk to
the current owner and any, like adjacent landowners
owners.
But
but it's specific to a certain set of
standards or what's in the Ast
methodology
that
was based on trying to address many of
these things that
come up in in federal super fund law.
So that somebody is not liable in the
future so that the the the buyer
can be relieved of liability
because a
past review was done. So it's critical. But
if they find something
that might be of concern, that's where you
go and get into something like a phase
2 or you start taking soil samples, etcetera,
to determine if if there actually is some
some type of
contamination on the property.
Very good. Well, now now we're talking about,
you know, phase 1 phase 2 and in
researching well facts and in our previous
conversation, there's some variations of the reports that
you generate,
and and report on Well fax prime, well
fax Pro. Maybe you could elaborate on the
differences between those reports.
Sure.
To start, both of our reports provide detailed
information on well locations with maps and the
well types because there's differences between a natural
gas well and and an oil well.
The well status
information about the last operator
the operator status and production dates, that's all
very critical and important.
And then potential risks
But... And then our more detailed report also
gets into information about well construction, which I
I talked about earlier and then well plugging.
Groundwater information, soil
information,
and drilling waste information, and then also
mentions potential risks and and
potential mitigation methods.
Prime
is specifically
geared towards home virus.
Usually, a a home buyer
is looking at Wealth fax to screen a
property.
So therefore, you know, they wanna know
if the property
or within a certain perimeter has oil and
gas activity.
So for that, we include a map tag
to the parcel Id and then information on
the well type status, last production date, and
information on the operator and any pipelines,
And, you know,
prime starts at a hundred and 99 dollars
for a 2 acre or less watt.
And then we also offer because we know
it's used. For... To to review a property,
we offer a 20 percent discount on a
second report if it's ordered at the same
time so you can compare 2 different properties.
And, you know, I mean, to to illustrate
why that's important,
it if you happen to you got a
mortgage.
And on a home, and there's a plug
well there and it leaks.
It's gonna cause you
considerable monetary damage even if the oil company
is is still around and they come back
and plug well. Right. Because you're gonna have
to deal with all of that. The interesting
part about that, though, and this is where
Well fax prime really pays for itself. The
bank still gonna require you to pay the
mortgage even if the home is damaged,
Mh. And you gotta remember homeowners insurance won't
help you with any of that damage if
it's from a plug well.
Right. Yeah. Those are 2 separate concerns for
sure. You can have, you know, your environmental
thing going on and and litigation or it's
it's no different than a homeowners policy and
somebody breaks their leg on your property and
you're dealing with that off to the side.
That doesn't affect the bank getting paid their
money back. They they want their mortgage pay.
That's a great point. Yeah.
Now pro, our other report. It's geared towards
land buyers and landowners.
You know, often when property buyers are looking
for the land, it may be difficult to
find something
that hasn't had oil and gas activity in
the area that to again, you know, like,
as we were talking about earlier in ag
area.
Therefore, the buyer needs to know information that
gets very Pacific about how the well was
constructed,
meaning those engineering practices
that were used to drill the well, and
then maps tagged to the Parcel Id and
also
historic maps of the area that show old
activity.
Information on how the wells plugged and
information on drilling waste because I'll give you
an example about why that's an issue. And
then possible old production pits, groundwater protection data
potential risk. And mitigation options.
Pro,
also, like to mentioned, pro starts at 349
dollars for a 2 acre or less property.
And
as with Prime,
all of the the pricing depends upon the
size of the property.
And Pro really
the uses for it are for negotiating leverage
and future monitoring so that you don't have
to pay for the cleanup. Right. So
To be clear, you know, both Prime and
Pro provide information that can be used for
risk
identification and assessment, but also for negotiating leverage.
And that's very similar
to how a home buyer uses a home
inspection.
Right. Yeah.
Well, that's... So just to clarify, so the
reports generally,
the price and the cost of the approach
of the reports work off of the acreage.
Count. And not, that's a well count on
the property.
That's correct.
And that's, you know, in certain parts of
the country, that can be very relevant. I
have right now, we have a a 72
or 3 acre farm listed. It has 23
wells. Wow It's it's in 1 of those
shallow
you know, 1 and a half 2 acre
spacing, you know, areas where, the the density
of those wells is is much higher. So
Mh.
And these are these are operating wells, but
again,
at some point, they won't be. Right. And
if that infrastructure is not is not taken
out,
even if it is. Even if the surface
infrastructure is all taken out, those...
They're, you know, they're gonna they're gonna cap
those. They're gonna plug those wells and and
they'll be there'll be some
residue left there.
Absolutely. And and, you know, there's there's no
way to get rid of that well bore.
And there's the real risk
because the the real risks
can be kind of broken down into about
3 different buckets. 1 is the well bore
itself.
And that includes both how it was constructed
and the plug.
But you can have an active well
that had a very old construction
practice
that's leaking while it's being produced. Right.
The other bucket is drilling waste.
Drilling waste,
oftentimes
was buried on sight.
And because it contains contaminants,
that can affect your soil and groundwater.
And then the other 1 is
is production and gathering lines, and that's a
really other fascinating area about all of this
because,
as an example in Texas,
you
don't have to... They don't have to report
where the gathering line from a well is
until the point of 4 first metering. So
let's say you have a central tank battery,
and there are 5 different wells on a
piece of property coming to that tank battery,
but the meter
for to to determine how much is being
produced is at the central tank battery. So
the gathering lines from each well to the
tank battery
is not marked.
Interesting.
This is... Is there a fair amount of
competition in the marketplace you're in right now?
No. It's no you're the only... We're the
only people that provide this. That's crazy. Yeah.
Yeah. Yeah. Based on everything that we're hearing
right now because the service is very relevant.
Yeah. And as expansion outside of the. You
at the same time, but that's crazy.
And as we expand outside of these urban
corridors and move more and more into non
urban America into rural properties. Yeah.
I just... It it seems like
you you are, you know, at the epicenter
of something that's gonna become very relevant in
the future in this country.
Well, I I hope so. You know, I...
That's kind of going back to... When I
started looking at this. That was 1 of
the things I started looking at was
why how how big of an issue is
this? And when you start really looking at
it and then
realizing that it's not in entitled work.
Yeah. It's... You know, And I... A way
to find out unless you... Yeah.
And And, you know, I mean, yes, state
state regulatory
agencies have data.
But
in order to truly understand what the risks
are
you have to get somebody who understands oil
and gas tell you
this is what's gone on. Yeah. Somebody needs
to decipher that data, and dis it, Like,
that... Yeah. Generate generate a report where it's
understandable, Maybe. You know where I see this
really
starting to take hold is in the finance
industry. Mh. And the banking industry,
and targeting
certain
geo areas, certain
geographical areas where there has been historic production.
It's non existent.
Just to mitigate risk.
And and saying, well, we're getting ready to
dump a bunch of money into this
portion of the county out here.
We want these reports ran. Right. You know,
on on loans
before we go in and buy,
allow somebody to use our funds to buy
these, these plots of land. Right.
That's a really
very interesting area to to discuss, Sean.
You know, I...
When I first
had this idea,
I spoke with,
several banks.
And
what you're talking about falls on the side
of
commercial loans
because
and it should be falling on mortgages, but
Right. It really kinda falls at least on
from a a bank perspective on commercial loans
because
oftentimes they'll retain those rather than selling them
as quickly on the secondary market.
So
they... They... They're they're more concerned about
making sure that the borrower has the ability
to repay. So if if a plug fails
and it harms the property,
then the borrower order is gonna be under
financial stress, which then would cause
being able to service the loan problematic. So
that that is definitely an the area. Right.
But when you start talking about mortgages,
really most banks
are really just loan origin. Mh. And they
turn around and and they're they're just... Since
they are, they're just following federal guidance.
On what to look at and federal guidance
does not talk about this.
Other than you can't have a home at
at some federal agencies
you can't have a home within a certain
distance of an active well. It doesn't talk
about flood wells. Yeah. So the bank knowing
that they're just an origin and they're gonna
turn around and sell the sell the alone
on the secondary market rather quickly
They're just passing a risk on down the
market. Right. Yeah. They're just pushing it off
to the next guy. That's right. But you
know the the basis.
Of, of most regulatory,
most regulatory
laws and
things that have been enacted in this country
are centered around consumer protection. Right. Yes. And
there's nothing of that sort going on for
this at all. Well, and I I mean,
they do, You know, in in some Yeah
like, what he just... What Blake just said
about you can't build a home within a
certain distance of an active well out there.
It just looks to me like Blake you
are
your maybe out front, you're you're still a
little bit ahead of where we need to
be.
When we talk about consumer protection and being
able to
to have some security
and and where we're going to build our
home and and
and and establish, you know, our our our
our family and our livelihood possibly pulled groundwater
out of the ground and stuff is this
is just this is buying you a bit
more insurance. A bit more security out there
that the property has been vetted out and
it it passes
it it kinda passes that
that hurdle.
That that's right. That's right. And I mean,
there's multiple examples of...
That, you know, failures having occurred,
you know, for instance, in in 2007,
a man was building a home in Colorado,
and he didn't know that an oil plugged
well existed under the house. He was building,
the well was leaking methane, which natural gas.
And it began to build within in the
house in the house exploded.
And, you know, thankfully,
he didn't.
Nobody was... Nobody was killed.
But yet,
what he had been building
was destroyed. I don't know whether or not
he had a... If he had gotten a
you know, construction loan on that home him
or not, but if he did, you know,
he still stuck with a construction loan, but
yet is gone.
And,
you know, another example talk about what I
mentioned the earlier that I mentioned something about
drilling waste.
Last summer, a man in Santa Barbara,
a Santa Barbara area. But he won a
lawsuit to get Chevron because he had built
his home on an old drilling pit, and
he didn't know it.
And the pit had been part of an
old field that had been shut down in
the land soul to a developer.
And the man built his home on the
lot,
and had the unknown pit, and he lived
there for 41 years and he got cancer.
And then he later when he was trying
to figure out what had going on and
what caused it because it was a a
rare kind of cancer.
He discovered he'd been living on top of
that old pit where they were contaminants.
And just for the listeners that are on
here because there are some... That are not
familiar with the oil and gas industry, a
drilling pit
as a pit that's created
beside imagine the tall oil wells that we've
all seen on television before. They're drilling thousands
of feet in the ground and they're pulling
things that are underground that are not meant
to be above ground. We've Yeah. You, radioactive
materials and
and and different
types of materials coming up out of the
ground. Yeah that solid waste is held in
that pit out there, and that is what
Blake referred to earlier as it's it would
be very difficult
if not impossible to inject most of that
back end of the ground, that stuff is
disposed of above ground. Yeah. So if it's
just leveled out, and it becomes part of
the soil, a few years later, you have
no idea that this is an drilling pit
right here and you build your house on
top of it, and your kids go out
and play in the dirt and you're pumping
your your water, you know household water out
of a well that's going right through that
stuff. It
that there is a great cut case study
as to why these reports could be relevant.
Water That's right. I mean, and and talking
talking about that very thing.
A housing addition in an area in North
Oak Oklahoma city around Edmonton. It was built
on top of the old field and homeowners
didn't know it. They later drill some water
wells. Mh.
To water their yards and unbeknownst to them
they drilled through old saltwater pits.
And the water became salty and kill or
grass, and that's when they begin to, you
know, investigate well, what in the world is
going on here or something is something has
happened. And they discovered
that they had been living on
top of this old field and there were
plugged wells around them and these old buried
pits.
And so at first, the the operator of
the old field, which was Con,
they tried to claim statute limitation. So, yeah.
Oh, yeah. Not. No. Not a problem. Sorry.
Yeah.
However, Con finally settled with them in in
that particular case. So Well, blake, I'm not
a scientist, but I'm gonna take a shot
in the dark here and say that if
the water is,
if it'll kill the grass, it's not gonna
do a human being any good. Right. That
is exactly right. That's exactly right. That's probably
a pretty the pretty good mustard test. If
you spray it on your lawn in your
lawn dies, don't drink it. Yeah. Yeah. That's
that's exactly. And he said that was in
Oklahoma too so who would have thought there
was, you know, saltwater water and the groundwater
there at all. You know?
Oh crazy. Tri tri, there was a a
case.
This wasn't as much for for
oil and gas production, but it was...
From storage,
even though there's a lot of oil and
gas production in in Los Angeles, but there
was a storage facility that I think shale
owned,
and they had a lot of tank bottoms.
They would clean out from the tanks, and
they've spread it out
around Long beach. And
later on, that storage area was taken down
and a housing development was put on it.
And these people started having issues with their
sewage, you know, flat coming from their
their sink. Yeah. Then. It was backing up,
etcetera. And so they call some plumbers out
there.
And it turned out these homes had been
a little bit older and it was before
Pvc was really being used. So some cast
iron pipes were there.
And that'll... Those old
tank bottoms had actually eaten
the cast iron pipes,
coming from their sinks and and from their
toilets
and all that was just settling under their
house.
Nice little pool under their house of Yeah.
Right. Okay. Right. And I mean, you also
mentioned that just the wells themselves like the
capped wells
are are may only be, like, 5 feet
down. I mean, my pools deeper than that,
You know, like, I guarantee. I didn't call
anybody to build a pool that knew anything
about a well in my backyard at any
point in time. Promise you had happen because
I did it my... Elf and that didn't
alpha. And so...
Well, you know, I think that's funny. Say
Something I'm about cool. I I think that
there was a development,
not it hasn't been too long ago that
was released for development in the Houston area
that
1 of the majors had owned and the
deed restriction because There's no deed restrictions on
any of these things unless somebody
puts puts that on the property. Right. Unless
somebody report it. Yeah. Yeah. Yeah.
And
the... This operator actually did put a deep
restriction that you could not put swimming pools
on there, and it was because there were
pits out there. Yeah.
So I mean, that's smart on his part,
I guess, but... Yeah. Yeah.
Yeah.
Wow.
Blake.
Great information. It's it's a great program, the
reports.
I I think, we have proven on this
pod. Cast that they're not only relevant.
In many cases in many locations across the
United States,
it
it would mitigate a lot of risk if
you preemptively
thought about doing a little deeper study on
the property that you're getting ready to build
on,
or if you're buying just acquiring land and
you wanna know, you know, what's the history
of this property? We may do something in
the future,
it's never too late to start gathering that
data, have that in a resource file, and
then, whether you keep it and develop it
or you decide to sell it. You're making
that property even more valuable to the next
owner because you have taken the time to
engage with Blake Scott with well facts and
to have that... Port generated, you can pass
that on to the next individual also.
That's exactly right. I mean, it's...
All of this...
Can be used so many different ways, not
just for risk assessment, but for mitigation
negotiation. I'm, at so many things. It's very
similar
to getting a car factory report on the
car. Yeah. It allows you to know what's
gone on to assess
Whether or not you think the risk for
that car is worth what you're paying for.
Now, what's the history? Yeah. That's right. What's
the history?
Blake if the listeners wanna reach out to
you at waste analytics or well fax and
and, begin the conversation around a what's a
great waveform to get a hold of you?
There are there are several ways. 1, if
you wanna report, you know you wanna report
go to our website at waste analytics llc
dot com and fill out and submit the
customer request form,
or you you just wanna talk to us,
You can contact
contact us at info waste analytics dot com
or email email me directly at jb b
Scott at waste analytics llc dot com, or
you can also call us at 09:03
6638640
Nice Folks we're on their website, waste analytics
is very easy to find on the web.
The ports are right up there on the
top and the heading, and, Blake, we wanna
thank you so much for joining us on
the podcast show.
We we welcome this
this information that you gave us. I know
it's gonna be valuable to the listeners, especially
in the industries that we serve, and we
wanna thank you for your time on here.
Thanks, Shawn, and Tri F and so ring.
I really appreciate it I've enjoyed. You bet
ladies and gentlemen, that's it for this episode.
We look forward to seeing you next time
inside the sail ring.
Thank you for joining us for today's show
To access all resources and links mentioned in
today's show. Head over to WWW
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