Capital and Main’s alarming report last week on the quest to plug abandoned and orphaned oil and gas wells in the state of Pennsylvania offers quite a bit of history on how the state became a hotspot for neglected wells. From being the first state in the country in which an oil well was set up to the rather recent fracking boom that somewhat reenergized the industry, Pennsylvania’s ties to oil and gas run deep. It should come as little surprise that many lawmakers are almost comically invested in keeping fossil fuels flowing, as are political hopefuls. In a recent televised debate for Republican gubernatorial candidates, climate change was barely discussed—and all candidates appeared to side with the oil and gas industry.
Such reverence for oil and gas has allowed the industry to benefit from little accountability when it comes to addressing abandoned and orphaned oil wells. There may be up to half a million such wells in Pennsylvania, many of which are leaking methane, a greenhouse gas found to be significantly more potent than carbon dioxide and one that is poorly monitored if noticed at all by regulators. The same goes for the inventorying of abandoned and orphaned wells: The number of such wells have long been undercounted and only recently has shot up, likely due to the amount of money states could get to plug them. Pennsylvania is poised to receive the second-highest amount from the Infrastructure Investment and Jobs Act, to the tune of $104 million. The state could receive further millions from performance grants.
Plenty of Pennsylvanians want in on that cash, and lawmakers have already introduced a bill allowing Pennsylvania companies to participate in plugging abandoned and orphaned wells. HB 2528 would prioritize Pennsylvania companies regardless of size when it comes to bidding for contracts. The prospect of receiving money is certainly enticing for businesses, but potentially parting with their own funds has the oil and gas sector on the offensive as it pushes back against calls to raise well clean-up bonds. Companies that apply for drill permits for wells in Pennsylvania must include a bond that regulators can later use for plugging were the company to forgo doing that. The current bonds are about $2,500 per well or $25,000 if a company decides on a blanket bond to cover all its wells. The average cost of plugging a well can range from $20,000 for doing the bare minimum to up to $76,000 for plugging and remediation.
Oil and gas companies clearly don’t want to pay even a fraction of that price, but organizations like the Sierra Club of Pennsylvania have made incredible headway in pushing for an increase in bond amounts. The Pennsylvania Department of Environmental Protection’s Environmental Quality Board (EQB) last year allowed the group’s petition to raise bonds to move forward, though it has faced incredible pushback from the oil and gas industry and lawmakers. For what it’s worth, the EQB clearly sees it has a problem on its hands, but it’s unclear if and when higher bond amounts will be adopted given that the agency has yet to release reports on the petitions it’s studying that advocate for raising bonds. Were a report to be released showing that the Department of Environmental Protection accepted Sierra Club of Pennsylvania’s petition, the agency has half a year to craft changes to the bonds, though there is nothing compelling it to use the petition’s recommended amount.