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11/25/24 - 156 New Stories - REAL Environmental & Conservation Leadership In PA: http://tinyurl.com/54ukts8z

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Conventional Oil & Gas Industry Says It’s A ‘Terrific Lie’ To Say It Is Responsible For Abandoning Thousands Of Wells; Industry To Change Definition So They Can Avoid Responsibility

On April 25, Arthur Stewart, Cameron Energy, told DCED’s PA Grade Crude [Oil] Development Advisory Council DEP’s database of abandoned wells is not accurate and it is a “terrific lie” to say today’s conventional oil and gas industry is the “culprit for abandoning hundreds of thousands of unplugged wells.”

He also questioned those who called well abandonment an “epidemic” using what he said was “questionable” information from DEP’s databases.

“Just because the DEP has identified these wells as being abandoned in the last five years, it doesn’t mean they were abandoned in the last five years,” said Stewart.

Stewart, the conventional industry and the politicians that support them are trying to blunt criticism they are abandoning more wells every year than DEP is plugging with the new taxpayer-funded federal conventional well plugging program.

Changing Definition To Avoid Responsibilities

Stewart suggested the conventional industry might help DEP get the definition of “orphan” well changed in the Oil and Gas Act for wells they own.

Orphan wells are now defined as wells abandoned before April 18, 1985 where the present well owner or operator has not “affected or operated” the well and from which the owner or operator has received no economic benefit. Read more here.

Wells are defined as “abandoned” if they do not report production for at least 12 months and do not have the equipment needed to produce a well. Read more here.

A well “owner,” as defined in the Act, excludes owners of “orphan wells” which also excludes the owner from any responsibilities for the well under the Act.

These definitions now apply to both conventional and shale gas wells.

Stewart and some DEP staff agreed at the meeting that dropping the date from the definition would make it easier to determine a well was an “orphan” because precise information is often not available to determine when a well was abandoned.

So, if the conventional well owner owned the well, but did not receive any economic benefit from it and has not “affected or operated” the well, it would no longer be “abandoned” it would become “orphan” for which the conventional owner would have no responsibilities.

The net impact of that change would be to enable the conventional industry to have DEP reclassify thousands more wells “orphan” and thousands fewer wells “abandoned,” making taxpayers responsible for plugging the well even though there is a well owner that may be financially viable.

“That would help relieve the flawed characterization of the conventional industry that we are, again, the cause of [abandoning wells],” said Stewart.

[There is no doubt the conventional oil and gas industry will lobby the General Assembly-- with or without DEP-- to make this change in one of the “must pass” budget bills coming up in June.]

Click Here for audio file of this discussion from this portion of the meeting.

What DEP’s Inspections Show

Kurt Klapkowski, DEP Deputy Secretary for Oil and Gas Management, testified before the House Environmental Resources and Energy Committee on March 25 that DEP issued notices of violation to 2,494 unique conventional wells for being abandoned and not plugged between January 1, 2017 and December 31, 2023 where well owners did not report any production. Read more here.

Klapkowski explained DEP ran the report against violations issued by their inspectors between those dates to generate this number.

DEP said 1,230 wells (approximately 49%) appear to have been abandoned after January 1, 2017; 518 wells (approximately 21%) appear to have been abandoned prior to January 1, 2017; and 746 wells (approximately 30%) were identified after January 1, 2017 as having been abandoned, but the precise date of abandonment is unknown. Read more here.

So far in 2024, the PA Environment Digest’s weekly review of DEP’s Oil and Gas Inspection reports and photos shows DEP has issued 443 violations for conventional oil and gas well abandonment (as of April 26) and one shale gas well abandonment. Read more here.

Klapkowski said DEP is plugging 227 conventional oil and gas wells with the first grant under the federal conventional well plugging program. Read more here.

The 2,494 wells abandoned by the conventional industry average 415 wells a year over the term of this report, based on violations issued as a result of DEP inspections.

In addition, Klapkowski said 86% of conventional oil and gas well owners did not submit a 2023 annual production and waste generation and disposal report to DEP for each well they owned, which means DEP has no idea if it is producing or how much waste those wells generate and where it is being disposed.

These violations cover 33,505 individual wells.

Failing to report production is a big step on the road to abandonment because wells are considered abandoned if they do not report production for at least 12 months and do not have the equipment needed to produce a well. Read more here.

This definition now applies to both conventional and shale gas wells.

Klapkowski also said 89% of conventional oil and gas well owners failed to comply with another basic requirement-- submitting a 2023 annual well integrity report for each of the wells they own to assure they are not contaminating groundwater, surface water or venting gas into the atmosphere. Read more here.

These violations cover 34,455 individual wells.

Failing to report well integrity is another big step on the road to abandonment.

Klapkowski concluded his House testimony by saying--

“Unfortunately, reviewing inspection and compliance data developed since 2017, DEP has identified widespread non-compliance with laws and regulations in the conventional oil and gas industry, particularly regarding improper abandonment of oil and gas wells but also not reporting hydrocarbon and waste production and conducting mechanical integrity assessments.”

This conclusion follows a December 2022 report DEP did on conventional oil and gas industry compliance which said conventional well owners routinely abandoned their wells, fail to report how millions of gallons of wastewater is disposed, and, in this industry, non-compliance is an “acceptable norm.” Read more here.

DEP submitted a list of over 27,000 abandoned and orphaned conventional oil and gas wells to the US Department of the Interior for possible plugging under the new federal conventional well plugging program. Read more here.

DEP is still sorting through this list to determine if there are conventional well owners with financial responsibility for these wells. Read more here.

On April 24, 2023, the Environmental Defense Fund issued a study that found 55,000 oil and gas wells owned by operators in Pennsylvania are at high risk of becoming abandoned leaving state taxpayers holding the bag for $3.7 billion in well plugging and cleanup costs. Read more here.

The study also found another 51,000 wells owned by solvent operators are at risk of being transferred to new financially unhealthy companies because the net present value of the wells is negative. The state taxpayer liability for these wells is an estimated $3.5 billion. Read more here.

DEP’s records show 202,616 conventional oil and gas wells have been drilled in Pennsylvania and there are 88,751 active permits, as of April 19.

These are the wells DEP knows about.

There may be as many as 250,000 oil and gas wells abandoned by the conventional oil and gas industry in Pennsylvania, but no one knows for sure what that number is.

There is no doubt the conventional oil and gas industry abandoned these wells.

For more information, visit DEP’s Well Plugging Program and Federal Well Plugging Program webpages.

Resource Links:

-- Shapiro Marks Plugging 200th Abandoned Conventional Oil & Gas Well: These Companies Will Do Anything To Avoid Paying For Plugging; It’s Not Okay Some In The Legislature Are Shielding Them; Text Well Locations [PaEN]

-- DEP Imposed $422,365 In Penalties On 14 Conventional Oil & Gas Well Operators In 2023 For Abandoning Wells, Spills, Venting Gas; 93 Operators Cited For Abandoning 271 Wells [PaEN]

-- DEP: 89% Of Conventional Oil & Gas Well Owners Did Not Comply With Well Integrity Reporting For 34,455 Wells In 2023 [PaEN]

-- DEP: 86% Of Conventional Oil & Gas Well Owners Did Not Comply With Waste Disposal, Production Reporting For 33,505 Wells In 2023 [PaEN]

-- EDF: Pennsylvania Has 55,000 Oil/Gas Wells At High Risk Of Being Abandoned; 51,000 Wells At Risk Of Being Transferred To Low Solvency Owners; Current Conventional Well Owners Abandon 561 Wells A Year, On Average [PaEN]

-- DEP Declares 101 Medina Res Dev Co. LLC Conventional Oil & Gas Wells Abandoned, Not Plugged In Crawford, Erie Counties On March 5 [PaEN]

-- Witness At Senate Hearing On Oil & Gas Wastewater Road Dumping Reports Her Home Has Been Surrounded By Dumping; Dumping Again On The Upswing In 2024 [PaEN]

-- DEP Reports ZERO Shale Gas Well Permits Under Review; DEP May Have Only 20% Of The Revenue Needed To Fund Its Oil & Gas Regulation Program [PaEN]

-- Clean Air Council/Sierra Club: PA Falling Behind In Conventional Oil & Gas Well Plugging Bonding; Burden Falls On Taxpayers [PaEN]