Plugging abandoned oil and gas wells has long been an issue, which has been overlooked for decades. The health and environmental risks associated with unplugged wells are well documented. Concerns about orphaned wells across the United States leaking high quantities of poisonous gases have drawn greater attention in recent years. Thus, the federal government and private energy firms are being called upon to fix the problem. Huge amounts of public funds have been pumped into plugging old wells. Now it’s up to the federal government to ensure this issue does not continue, to avoid the diverting of much needed into fixing problems associated with oil and gas.
Several states across the U.S. have identified leaking oil and gas wells that energy companies failed to plug when they went out of use. The American Carbon Registry (ACR) created the Plugging Abandoned & Orphaned Oil and Gas (AOOG) wells monitoring report. This is able to track the prevalence of abandoned wells across the U.S., estimating that there are as many as 2.3 to 3.2 million AOOG wells. That could equate to as much as 280,000 metric tons (MT) of methane leaking from abandoned wells each year, although few have been tested for emissions. Methane is much more toxic than carbon, causing concerns for the health of communities living close to unplugged wells. At present, an estimated 9 million Americans live within a mile of a documented orphan well, demonstrating the extent of the problem.
Why Do We Have an Abundance of Abandoned Wells?
Many wells continue to go unplugged for years after operations stop due to the financial burden associated with fixing these wells. Government regulations do ensure that there are some bonds in place to address the problem. However, the amount continues to be insufficient to fix the problem. Plugging cost estimations fall anywhere between $24 billion and $435 billion. And, as the number of remaining abandoned wells shows, this problem is nothing new.
On average, oil and gas wells have a lifespan of between 20 and 40 years. This means that energy companies are regularly drilling new wells to keep sites active and ensure their oil output. But once wells stop producing, energy firms are responsible for plugging these wells with cement to prevent methane from being released into the air. Similarly, we have to worry about contaminants leaking into groundwater. However, due to the high expense involved with plugging wells – particularly in offshore projects, over the years many energy companies have left their old wells unplugged. While rich oil majors may have the funds to plug their wells and avoid negative press attention, some smaller companies don’t have the finances to invest in this practice. In addition, many energy companies have gone bankrupt, particularly during the Covid pandemic, leaving abandoned wells in their wake.
The Land and Minerals Management at the U.S. Department of the Interior highlights a lack of reliable information on the number of abandoned wells across the country. They claim this is why carrying out a comprehensive plugging project is a challenge. Additionally, few states have spare funds to address the problem at the local level, relying on the federal government to fix these wells.
What Moves Are Being Made on the Federal Side?
In 2021, President Biden announced that $4.7 billion of his $1 trillion infrastructure bill would be devoted to plugging abandoned wells. Most of this money, approximately $4.2 billion, will be given directly to states. Steve Feldgus, the deputy assistant secretary for Land and Minerals Management, explained “In the past, the Bureau of Land Management might have gotten a few million dollars a year to go after some wells on their own land, but there has never been this kind of effort to get this much money out to states and tries to address orphan wells on their lands.” Although he highlighted that $4.7 billion was far from what was needed to completely fix the problem. Further, the plugging project could take well over a decade due to the need to carry out extensive surveys across 84 million acres of federal land to understand the extent of the problem.
This month, New Mexico’s Democrat U.S. Sens. Ben Ray Lujan and Martin Heinrich, with Republicans Sen. Kevin Cramer of North Dakota and Markwayne Mullin of Oklahoma launched the Abandoned Well Remediation Research and Development Act (AWRRDA), aimed at finding and studying abandoned wells. This added to the Revive Economic Growth and Reclaim Orphaned Wells (REGROW) Act introduced under the 2021 Infrastructure Investment and Jobs Act. The actors are requesting federal funds to support the research initiative, with plans to use an anticipated $30 million in 2023, $31.25 million in 2024, $32.5 million in 2025, $33.75 million in 2026 and $35 million in 2027 to support the project.
Long Story Short:
Unplugged, abandoned oil and gas wells have been a problem for decades, and continue to be an issue that threatens the environment and community health. With more and more oil operations running dry, and millions more oil wells expected to retire in the coming years, energy firms must be held responsible for their infrastructure and emissions. While funds from the $1 trillion infrastructure bill will begin to address the issue, much greater investment is required to understand and fix the problem in its entirety, which will likely take decades to resolve.
Felicity Bradstock is a freelance writer specializing in Energy and Industry. She has a Master’s in International Development from the University of Birmingham, UK, and is now based in Mexico City.
Published at Wed, 05 Apr 2023 09:49:03 -0700