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DEP Expects $44 Million To Plug Conventional Wells Leaking Methane; $76 Million For 2nd Year Of Federal Conventional Abandoned Well Plugging Program

On December 5, DEP told the Oil and Gas Technical Advisory Board it expects to receive an estimated $44 million to plug conventional oil and gas wells leaking methane under the federal Methane Emission Reduction Program and $76 million in second-year funding for plugging abandoned conventional oil and gas wells.

DEP also said it will be submitting a grant application for $1.9 million to the U.S. EPA to help fund its initiative to qualify for primacy for regulating Class VI carbon sequestration injection wells.

Here is a brief summary of updates DEP provided to the Board on key topics--

-- Federal Methane Emission Reduction Program Grant: DEP expects to receive a $44 million U.S. EPA grant to plug active, marginal conventional oil and gas wells leaking methane as early as December 15. DEP said they submitted a “barebones” application and the details of how the funding would be invested will be developed with a workgroup of the PA Grade Crude [Oil] Development Advisory Council. DEP said they are looking at a grant program to conventional operators to plug these wells. The agency is also looking to develop a mechanism for plugging so-called home-use gas wells that are leaking methane.

-- Federal Bipartisan Infrastructure Well Plugging Grant: DEP expects to submit an application for $76 million by December 31 for abandoned and orphan conventional oil and gas well plugging and associated costs like identifying potentially responsible parties, documenting additional abandoned wells. DEP said they will also be opening a grant program for qualified well plugging firms to plug abandoned conventional wells next year.

-- Chapter 78 Conventional Environmental Regulations: Two regulatory packages are in development related to conventional oil and gas well development.

The Environmental Protection Standards proposed rulemaking includes protection of public resources, recently upheld by the PA Supreme Court, and a “grab bag” of other changes including water supply impact protection, water impoundments, borrow pits, erosion and sedimentation protections, and various reporting changes. DEP will be moving the regulation forward, but there is no timeframe to getting it to the Environmental Quality Board at this point.

The second Waste Management draft rulemaking covers waste storage and management at conventional oil and gas sites and changes to the area of review requirements. DEP will be setting up a meeting with a work group to the PA Grade Crude [Oil] Development Advisory Council to go over a line by line review of the draft regulations. DEP anticipates going to the April 25 CDAC meeting for formal comments from that group.

-- Proposed Certified Oil & Gas Inspectors Program: Kris Shiffer, the Director of the Bureau of Oil and Gas Planning and Program Management, did a presentation on the concept of establishing a certified well inspector program for the Oil and Gas Program modeled on the certified storage tank inspector program DEP already operates. Shiffer came from the Storage Tank Program.

Shiffer did a similar presentation to the PA Grade Crude Development Advisory Council on October 12 and provided additional details. Read more here.

DEP is looking at the certified inspector program to increase the frequency of oil and gas well inspections without hiring additional state inspectors.

DEP now has 28 oil and gas inspectors which means it would take over 15 years to inspect each well on the books just one time. DEP would need at least another 60 inspectors to get to a more acceptable inspection frequency.

-- Discussion Of Financial Assurance For Plugging Unconventional Gas Wells: Kurt Klapkowski, Deputy Secretary for Oil & Gas Management, invited the Board to be part of a discussion on how to update the bonding requirements for unconventional gas wells in response to a petition submitted by the Sierra Club and other groups to the Environmental Quality Board.

He said he was not comfortable with the extrapolation method the petition used to calculate shale gas well plugging costs because it is a different process than plugging conventional wells.

He noted DEP has not had to plug any unconventional gas wells, but said the industry does have experience and data on costs.

He said since 2020, the industry has plugged 245 unconventional gas wells in Pennsylvania.

Klapkowski also said he would be open to a broader discussion of plugging financial assurance to include concepts like using an Indemnification Fund to pay cleanup costs similar to the Fund now used by the Storage Tank Program or private insurance concepts like DEP discussed with the PA Grade Crude Development Advisory Council in October with One Nexus. Read more here.

He said these other tools would require legislative action.

-- Injection Well Primacy Application: Klapkowski updated the Board on the status of the application to EPA on the Class VI carbon sequestration injection well primacy. On November 2, EPA announced grants of $1.9 million would be available to each state to go through the Class VI program primacy application process. DEP is reviewing its existing legal and regulatory authority to meet the EPA program requirements. Klapkowski said there are elements that are difficult for Pennsylvania to meet since our regulations are different. Klapkowski said the fastest way to adopt federal regulations by reference would be the legislative route.

DEP also said--

-- Roulette Oil and Gas LLC withdrew its application for an oil and gas wastewater injection well in Clara Township, Potter County on September 14, 2023. Read more here.

-- The EPA permit for the Penneco Environmental Solutions, LLC injection well has been appealed to the EPA Environmental Appeals Board. Read more here.

For more information, visit DEP’s Oil and Gas Technical Advisory Board webpage. Questions should be directed to Todd Wallace by calling 717-783-6395 or send email to: twallace@pa.gov.

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - Dec. 2 to 8 -- 9 Abandoned Conventional Wells; Failure To Restore Shale Gas Pad; No Progress In Spill Cleanups [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices/Opportunities To Comment - December 9 [PaEN]

-- DEP Sets Jan. 23 Hearing On Transcontinental Gas Pipeline Frazer Compressor Station In Chester County [PaEN]

-- DEP Posted 68 Pages Of Permit-Related Notices In December 9 PA Bulletin [PaEN]

Related Articles:

-- Marcellus Drilling News: Senate Republican Leaders Urge DEP To Withdraw Environmental Justice Policy Saying They Lack Statutory Authority, And Out-of-State Groups Not Actual Residents Express EJ Concerns [PaEN]

-- PA Business Report: Senate Republicans Urge DEP To Withdraw Updated Environmental Justice Policy

-- DEP Expects $44 Million To Plug Conventional Wells Leaking Methane; $76 Million For 2nd Year Of Federal Conventional Abandoned Well Plugging Program [PaEN]

-- DEP Plugs 132 Abandoned Conventional Oil & Gas Wells So Far; DEP Issued 499 NOVs For New Conventional Well Abandonments So Far In 2023 [PaEN]

-- Roulette Oil & Gas LLC Withdraws Oil & Gas Wastewater Injection Well Application In Potter County [PaEN]

-- Independent Fiscal Office Reports 3rd Quarter Natural Gas Production Down 0.5% Over 3rd Quarter 2022, But Increased Over Last 12 Months [PaEN]