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Senate Hearing: Landowner Concerns About Liability For Abandoned Conventional Oil & Gas Wells May Be Impediment To Plugging Leaking Wells; Need To Make Plugging Programs More Effective To Deal With ‘Growing Problem’

On September 12, the Senate Republican Policy Committee held a hearing in Pittsburgh on ways to simplify and make more effective Pennsylvania’s expanded abandoned and orphan conventional oil and gas well plugging programs.

Sen. Dan Laughlin (R-Erie), Chair of the Senate Republican Policy Committee, opened the hearing by saying, “The purpose of today's hearing is to shed light on this issue, discuss the challenges that we face, and explore potential solutions to tackle this growing problem.

“Pennsylvania has a long and proud history of energy production, being home to the country's first commercial oil well. But alongside that legacy, we have inherited a significant environmental challenge.

“It's estimated that there are tens of thousands of orphaned and abandoned wells scattered across the state, many of them unmarked, undocumented, and leaking harmful gases like methane into our atmosphere.

“Addressing this issue is not just a matter of environmental stewardship, but a public safety necessity.

‘It is our goal today to better understand the scope of the problem, evaluate the available funding and resources, and develop strategies to accelerate well-plugging efforts.

“We also aim to discuss how Pennsylvania can take full advantage of recent federal initiatives such as the Infrastructure Investment and Jobs Act, which has allocated substantial funds for orphaned well remediation.”

[Note: DEP is working from a list of 27,000 abandoned and unplugged conventional oil and gas wells in its expanded federally funded conventional well plugging program.

[The problem is expanding as conventional oil and gas well owners continue to routinely abandon their wells and it is accelerating. Well abandonment is the most frequently violation issued by DEP. Read more here.

[In the last 20 months, DEP has issued conventional well owners a total of 1,256 violations for well abandonment. Read more here.

[Just, DEP has issued or continued 747 violations to conventional oil and gas well owners for abandoning and not plugging their wells so far in 2024. Read more here.

[In 2023, DEP issued 512 new or continued violations to conventional oil and gas well owners for abandoning and not plugging wells. Read more here.]

[So far in 2024, 19 violations were issued or continued to 10 shale gas well owners [Big Dog Energy LLC; EQT Production Co.; Diversified Prod LLC; Chesapeake Appalachia LLC, Atlas Resources, LLC; Atlas Resources, LLC (follow-up inspection)’ Repsol Oil & Gas, EQT Chap LLC; M4 Energy; M4 Energy (follow-up inspection); EQT (Rice Drilling B LLC); and Roulette Oil & Gas LLC; Roulette Oil & Gas LLC (follow-up inspection)] for abandoning wells and not plugging wells.]

Landowner Responsibility

For the first time in any House or Senate hearing on the abandoned conventional well issue, Sen. Dan Laughlin (R-Erie), Chair of the Senate Republican Policy Committee, expressed a concern about landowner responsibilities and plugging conventional wells that really need to be plugged.

“If I'm Joe Homeowner, let's say I got 100 acres out in farm country or whatever, and I realize that I have an old gas well on there that I didn't drill and it's just there, maybe not even who knows who drilled it,” said Sen. Laughlin. “Do you feel like the landowner would be afraid to call you guys because they're afraid of potential costs?”

“I could certainly see that being a limiting factor, for sure,” said Kurt Klapkowski, DEP Deputy Secretary for Oil and Gas Management. “One thing that I would point out is that in the Oil and Gas Act, it's actually in the plugging section of the act, that says that someone who did not participate in the operation or the ownership of that well, except as a surface landowner, has no responsibility or liability for plugging that well.”

“Of course I think there's going to be a concern there,” said Klapkowski. “I will say we worked with the Penn State Extension earlier this year and some of our lawyers from our Meadville Office participated in a webinar that talked about these sorts of issues and really explained why landowners don't have that liability unless they were the mineral interest owner and they participated in the operation of the facility.” [Click Here to watch webinar.]

“So the message I would like to get out to those folks is don't be afraid, we are actually here to help solve these problems,” said Klapkowski.

[Visit DEP’s Landowners’ Guide To Oil and Gas Wells webpage for more information.]

Lessons Learned From Expanded Plugging Program

The Committee heard extensive background and a status report from Kurt Klapkowski, DEP Deputy Secretary for Oil and Gas Management, on the new conventional well plugging efforts as a result of the infusion of federal taxpayers dollars into the program. [Read DEP’s testimony]

Klapkowski noted the deadlines involved in getting the new federal funding for well plugging contracts obligated meant the agency had to issue “lump sum” contracts with little or no opportunity for change orders which put the risk on contractors.

He said DEP is looking to award contracts in the next round using “time and materials” approach, their more traditional approach, which means DEP and the contractor will share risks.

Klapkowski said the bonding requirements in the state Procurement Code were also a concern to potential bidders.

Contractors had to put up a 100% performance bond and a 100% bond to guarantee payment to workers.

“As of today, the Department has not needed to forfeit any of the performance or payment bonds provided on the thirteen Initial Grant contracts issued in 2022 and 2023,” Klapkowski said.

He added the payment bond was important to the workers in the contracting process.

He also said DEP is developing Request for Proposal contracts like those used by the Hazardous Sites Cleanup Program to put contractors online to plug high-priority abandoned wells quickly and as needed.

RFP contracting would also be used for service contractors for engineering, permitting, methane quantification, environmental remediation and undocumented well location services to support the plugging program and contractors.

Klapskowski also said, in response to questions, he would recommend a conversation about expanding the grant program created by Act 96 to provide grants to plug orphan wells to also include abandoned wells, which are different under state law.

“I think that that would have a positive impact, and it would allow the qualified well pluggers who are applying for these grants, I think a little more flexibility in terms of what wells that they would want to go after, and wouldn't have to be just those [orphan] wells that were abandoned prior to 1985,” he said.

Changes Needed In Plugging Program

Testimony from Art Steward from Cameron Energy representing the PA Grade Crude Oil Coalition, recommended ways to speed the well plugging process and make it cheaper, including reducing erosion and sedimentation requirements, putting out plugging bids in smaller packages and allowing more bioremediation and reducing testing of contaminated soil. [Read Stewart ’s testimony]

Stewart first suggested the Act 96 orphan well plugging grant program should be expanded to include more than the 20% of the new federal money allocated to it now.

“The DEP could send 30, 40, 50% of the federal money to the grant program. And when you see the success that will come in the grant program, you would ask the question why wouldn't we send as much money to the grant program as possible because it does cut through the red tape,” said Stewart .

[The Act 96 plugging program has not yet started and there is no track record for the program.]

Stewart also suggested a more “flexible” approach to enforcing erosion and sedimentation requirements, like using trucks and drilling equipment on bulldozer-type tracks to cross streams and access the plugging sites, rather than building roads and installing filter socks that all have to be built and then deconstructed.

Stewart noted excavating and hauling soil contaminated by conventional wells and plugging operations is expensive and so is testing contaminated soil. He suggested the use of “bioremediation” in place at plugging sites.

No Plugging Money To Identify More Wells

Stewart was very clear that no federal money should go to identifying more wells that need to be plugged.

“DEP does not need to spend money finding more orphan wells. Today is not the day to waste money cataloging more wells.

“Today is the day to spend the federal money wisely and efficiently, plugging the many wells that DEP used to justify its federal application.”

“DEP already knows of nearly 30,000 wells which DEP used to justify its application to the feds. Even if the DEP implements my cost-saving suggestions, the federal money will plug only a small portion of those 30,000 wells.”

Sen. Scott Hutchinson (R-Venango), who represents the heart of the conventional oil and gas industry areas, said, “[The] Allegheny National Forest and surrounding beautiful pristine wooded areas already is filled with abandoned orphaned wells. I don't categorize those wells as problems and I don't see how anyone could.

“We're inviting people to come to the most beautiful area of the state and those wells are there today. They are not a problem. They are a whole, they are not a problem.”

“We have a long list of identified, you said 27,000 [Klapkowski] where we know exactly where they're at.

“Why wouldn't we limit our plugging program to those wells instead of going out and trying to find where the other hundred thousand or so are because if the other a hundred thousand, couple hundred thousand, whatever that number is, if they are not today causing a problem,” said Sen. Hutchinson. “Why should we just go out just to put them on a list somewhere? Why would we do that if we don't have the resources to plug them?”

Kurt Klapkowski, DEP, responded by saying, “The first is sort of the conditions in the field and the reality of these wells, and they may not be causing a problem today, but the reality is they're not being maintained, they're not being repaired and the entropy is just going to continue to happen.

“And eventually, I think any well that we plug today to modern standards is a problem avoided in the future. So I think that's part of the reason why you try to identify them.”

“I think that defining the problem is really important because you see these numbers and even when you look at this 2015 study that was done by DCNR and others, we're guessing at this point.”

Klapkowski concluded by saying, “My grandparents actually purchased a cabin on the Allegheny River in Forest County outside of, it's a West Hickory is the mailing address, but West Hickory is nowhere near there.

“And so I've spent a significant amount of time in that part of the state. And you're absolutely right, it's a wonderful place, it's a magical place in a lot of different ways.

“And I want to make sure that it's going to be magical for my grandkids and their kids as well. So that's why we're doing this,” said Klapkowski.

Other Issues

Daniel Frick and Paul Espenan, representatives of Diversified Energy, a major [and controversial] owner of conventional oil and gas wells in Pennsylvania and Appalachia noted issues like not having a clear definition of “attainable bottom” in well plugging, in their view, were holding back their participation in Pennsylvania’s well plugging program. [Read Diversified’s testimony.]

James Zunz, representing the International Union of Operators Engineers Local 66, suggested plugging projects be put out in larger bundles to reduce mobilization and other costs and require enforcement of prevailing wages, safety, scheduling and other contract obligations. [Read his testimony.]

Bryce Yeager of BioSqueeze, a company promoting a proprietary process for using bacteria to seal oil wells leaking hydrocarbons, suggested DEP expand the methods used to plug wells, update existing plugging regulations and educate DEP staff.

He suggested the use of BioSqueeze for use in replugging oil wells that have already been plugged, but they have not yet plugged wells to seal off methane emissions. [Yeager testimony.]

Conclusion

Sen. Laughlin concluded the hearing by saying, “We hope this hearing will continue the kind of productive dialogue and collaboration that leads to meaningful action by both the public and private sectors.

“I am encouraged by today's discussion, and will continue to work with my colleagues in the House and Senate to look for opportunities to develop a strategic plan to continue to move Pennsylvania forward as we implement the DEP's Orphaned and Abandoned Well Program.

“And just one last comment. I think this is a very productive hearing, by the way. And I look forward to, and I know my colleagues do as well, to having further discussions as to how to streamline this process, because the 100-year plan, I don't think sits well with any of us.”

Click Here to watch a video of the hearing and for copies of testimony.

Sen. Dan Laughlin (R-Erie) serves as Chair of the Senate Republican Policy Committee and can be contacted by sending email to: dlaughlin@pasen.gov or calling 717-787-8927.

(Photos from testimony of Art Stewart from Cameron Energy representing the PA Grade Crude Oil Coalition

NewsClip:

-- The Center Square - Anthony Hennen: State’s $100,000+ Cost To Plug Abandoned/Orphan Wells ‘Outrageously Enormous;’ Taking Care Of Problem No Simple Task

Resource Links - Conventional Oil & Gas Wells:

-- 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 [PaEN]

-- DEP Report Finds: Conventional Oil & Gas Drillers Routinely Abandon Wells; Fail To Report How Millions Of Gallons Of Waste Is Disposed; And Non-Compliance Is An ‘Acceptable Norm’ [PaEN]

-- House Hearing: Let’s Work Together To Make Conventional Oil & Gas Industry Practices Cleaner, Respect Property Rights, Protect Taxpayers And Prevent New Abandoned Wells [4.24.23]

-- DEP Declares 21 Conventional Oil & Gas Wells Owned By Schreiner Oil & Gas Inc. Abandoned, Not Plugged In Erie, McKean Counties; 747 Violations For Conventional Well Abandonment This Year [PaEN]

-- US Dept. Of Interior Approves $76.4 Million To Plug Abandoned Conventional Oil & Gas Wells In Pennsylvania; 1,234 Violations For Abandoning Conventional Wells In Last 20 Months [PaEN]

-- Environmental Defense Fund, Moms Clean Air Force To Hold Public Meetings In 3 Northwest PA Counties On A Project To Test New Methods Of Locating Abandoned Conventional Oil, Gas Wells [PaEN]

-- State, United Mine Workers Announce First-In-PA Registered Apprenticeship Program To Plug Oil And Gas Wells Abandoned By Conventional Well Owners; DEP Issued 722 Violations For Well Abandonment So Far In 2024 [PaEN]

-- DEP Issues Violations To 16 Owners Of 5,374 Conventional Oil & Gas Wells For Failing To Submit Annual Production, Waste Generation/Disposal, Well Integrity Reports [PaEN]