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With money on the table, states identify 120,000 leak-prone oil wells
Last year’s federal infrastructure law gives states a financial incentive to document these potentially hazardous sites
Credit: The Washington Post
By Maxine Joselow
Updated December 2, 2022 at 8:30 a.m. EST|Published December 2, 2022 at 6:00 a.m. EST
Across the country, fossil fuel companies have walked away from thousands of oil and gas wells, leaving them unplugged and idle even as many of these drill sites leak greenhouse gas emissions and pose direct threats to human health. But until recently, states had little incentive to identify these wells and few resources to plug them.
A drilling rig works on pulling pipe while plugging an abandoned oil well north of Shelby, Mont., with abandoned oil storage tanks visible in the foreground. (Adrian Sanchez-Gonzalez for The Washington Post)
Now, the bipartisan infrastructure law that President Biden signed last year is changing the calculus around this mounting environmental challenge. The law, which authorized a record $4.7 billion for states’ efforts to plug abandoned wells, has set off a scramble among state officials to document the wells within their borders.
As a result, states have now reported more than 120,000 abandoned wells in total, marking a nearly 50 percent increase from the 81,000 wells that they reported last year, according to a new analysis of state data by researchers at the Environmental Defense Fund and McGill University.
Even this figure may mask the true extent of the problem. By some estimates, the number of undocumented abandoned wells in the United States — those that have yet to be discovered — could be as high as a million.
“It would be wonderful to be able to map all of the true orphan wells in the country, of which there could be a million or more, but we can only map the documented ones by definition,” said Adam Peltz, a director and senior attorney at the Environmental Defense Fund who worked on the analysis. “It speaks to the principle that this is a big problem. We still have a lot to do to find these wells and bring them under control.”
Abandoned wells — also known as “orphaned wells” because no owner can be found — can leak toxic substances such as arsenic, formaldehyde and benzene, polluting the air and groundwater. Using census data, the analysis found that 14 million people live within a mile of an orphaned well, including 1.3 million adults with asthma. Exposure to air pollution can worsen asthma symptoms, according to the Centers for Disease Control and Prevention.
Orphaned wells can also emit methane, a potent greenhouse gas that causes climate change. Responsible for roughly a third of global warming today, methane traps about 80 times as much heat as carbon dioxide during its first 20 years in the atmosphere.
Abandoned wells are a huge climate problem
In January, the Interior Department announced that states could apply for an initial $1.15 billion in federal grants to fund the closure and cleanup of abandoned wells. The department noted that the grants would be based on three criteria: the number of documented orphaned wells in each state, the estimated cost of cleaning up the wells in each state, and the job losses in each state from March 2020 through November 2021.
“The Department is taking a thoughtful and methodical approach to implementing the orphaned oil and gas well program that aims to get money to states as quickly as possible while being responsible stewards of taxpayer dollars,” Interior Secretary Deb Haaland said in a statement.
In August, Interior awarded an initial $560 million to 24 states to begin plugging and remediating more than 10,000 orphaned wells. Twenty-two states received $25 million each, while Arkansas and Mississippi got $5 million each to measure methane emissions from the wells and begin plugging them.
The researchers at the Environmental Defense Fund and McGill University conducted a similar analysis of orphaned wells last year, before the passage of the infrastructure law. This year, they found dramatic increases in documented wells in certain states that updated their databases in response to the federal funding.
Ohio, which received $25 million in federal money, reported the highest number of orphaned wells of any state — 20,439 — in the latest analysis, compared with just 891 wells in last year’s analysis.
Stephanie O’Grady, a spokeswoman for the Ohio Department of Natural Resources, said in an email that the department identified the additional wells through a comprehensive review of its records. She added that while the department employs 26 people in its orphan well program, it is searching for more qualified contractors to plug the wells — a challenge for the Biden administration as it seeks to implement the infrastructure law in a way that creates well-paying jobs.
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Pennsylvania, which also got $25 million in federal money, had the second-highest number of wells this year — 18,471 — compared with 8,840 last year.
Jamar Thrasher, a spokesman for the Pennsylvania Department of Environmental Protection, said in an email that the number of undocumented wells in the state may be much higher — a consequence of the state’s historical reliance on fossil fuels to power its economy.
“While the exact number of orphan wells remains unknown due to the long history of oil and gas exploration in Pennsylvania,” Thrasher said, the department “estimates there may be at least an additional 200,000 undocumented abandoned oil and gas wells in the commonwealth.”
In thousands of cases, smaller oil and gas companies have abandoned wells after going bankrupt, leaving taxpayers on the hook for their cleanup. To proactively address this problem, federal and state laws require oil and gas companies to post bonds before they drill — a form of financial assurance that the wells will be plugged if the firms shirk their responsibility.
But under current bonding schemes, state coffers are woefully underfunded. To ensure adequate funding for remediation, some advocates have called on Interior’s Bureau of Land Management to update the bonding requirements for oil and gas development on federal lands. The Western Organization of Resource Councils, a regional network of eight grass-roots groups, recently submitted a petition urging the agency to draft stronger bonding rules.
Oil and gas companies underreported methane leaks, new study shows
“Congress recently appropriated $4.7 billion to plug and reclaim orphaned wells, but this funding addressed only a small portion of the growing public liability of orphan wells across the nation and did not resolve the root cause,” the petition says. “The problem of orphaned federal wells will be better addressed in the long-term by sufficient bonding.”
In a statement, Cole Ramsey, vice president of upstream policy at the American Petroleum Institute, did not directly address whether the powerful trade group supports updated bonding rules but said the industry “is taking action every day to address the permanent closure of natural gas and oil wells.” Ramsey added that the group unveiled a new industry standard last year that provides guidance on proper well closure and remediation.
Interior spokesman Tyler Cherry declined to comment on the petition or the abandoned wells analysis.
Even without federal action, some states are racing to tighten their own bonding rules. Regulators in Colorado, the fifth-biggest oil producer among the states, approved sweeping new financial requirements for oil and gas companies in March. The rules mandate that companies provide hundreds of thousands of dollars in additional funds to cover potential cleanup costs, with the aim of better protecting taxpayers.
Other states, however, are moving in the opposite direction. In Pennsylvania, the Republican-controlled state legislature passed a law in July prohibiting an increase in bonding requirements for wells drilled after 1985 for 10 years. Wells drilled before 1985 in Pennsylvania — which represent most of the state’s orphans — require no bonding altogether.
Peltz, the Environmental Defense Fund researcher, called on more states to follow in the footsteps of Colorado, although he recognized the political challenges of doing so.
“Colorado has pretty much solved its orphan well problem, and kudos to them,” he said. “The rest of the country needs to do it now, too.”
Credit: The Washington Post
Some 120,000 U.S. oil wells sit abandoned, new research shows - The Washington Post