Pennsylvania to receive $76M to plug hundreds of orphaned oil and gas wells (2024)

Anya LitvakPittsburgh Post-Gazette

An infusion of federal funds is headed to Pennsylvania to plug orphaned oil and gas wells, an announcement that the state's environmental regulators have been anticipating for months.

The $76.4 million will be used to plug about 550 old wells over the coming years, sealing up wellbores and removing rusting equipment from sites that have no known owner and are now the liability of the state.

The money will chip away at a problem that has been decades in the making. There are likely hundreds of thousands of abandoned and orphaned wells in Pennsylvania, but only 26,000 have been documented.

The Pennsylvania Department of Environmental Protection has been gearing up for this cash influx by holding workshops with potential plugging contractors about the application process, which will open at some point in the next few weeks and run on a first-come, first-served basis.

"It's going to be super competitive," said Joe Gaboff, an oil and gas program specialist, during one of the workshops last month. "There's going to be a lot of people lined up."

This funding, which comes through the U.S. Department of the Interior, is part of the first wave of money for well plugging from the Infrastructure Investment and Jobs Act of 2021. The legislation dedicates $4.7 billion to plugging orphaned and abandoned wells across the nation. Pennsylvania, which hosts a disproportionately high number of these wells, has already received and awarded contracts for the initial $25 million grant made in August 2022.

Pennsylvania is eligible for another $114.6 million in formula grants. The state has until December to apply.

"As part of the award, Pennsylvania will detect and measure methane emissions from orphaned oil and gas wells, screen for groundwater and surface water impacts, and prioritize cleaning up wells near overburdened and disadvantaged communities," the Department of Interior said in a statement announcing the $76.4 million funding.

TheDepartment of Environmental Protection workshops addressed these requirements — how to measure for potential gas leaks and how to quantify them if found — but officials said that in order to get the money out as quickly as possible, projects would not be prioritized based on severity or proximity to an environmental justice community.

Bill Walsh, who oversees the program for the Department of Environmental Protection, said prioritization will be possible with future rounds of funding and with other plugging programs.

"People have said about the orphan grant program, 'It's first come, first served — how are you going to make sure the worst wells are going to get plugged?' " Walsh said during a webinar last week.

"Well, I think it's better to be proactive. Why wait until some of these orphan wells collapse or the casing drops," he said. "Better to address some of these before they become a problem."

The money isn't there forever, he said.

"This runs out in a couple of years."

Applicants can submit a request to plug up to five wells under the orphan well program, with grants for shallow wells up to $40,000 and deeper (i.e. 3,000 feet or more) wells up to $70,000.

TheDepartment of Environmental Protection is also preparing to open up applications for the Methane Emission Reduction Program, which gives grants to plug wells that are not producing very much oil and gas but are still in operation.

Most conventional wells in Pennsylvania — that is, those drilled vertically and into a shallow formation — will meet the criteria for such marginally producing wells,Walsh said.

These wells will be ranked based on their hazard to public safety and the environment.

The grants also can be applied to plug wells that were drilled or converted to serve homes and may now be the responsibility of the homeowner.

"Honestly, it's a once-in-a-lifetime opportunity," Walsh said. "Like the orphan well program, it's going to end in a couple of years."

After years of paltry funding for well plugging — theDepartment of Environmental Protection was spending about $1 million a year to tackle the problem — the federal legislation delivered a firehose of opportunity, leaving the state scrambling to document and prioritize eligible wells and, perhaps even more crucially, to find companies that would perform the work.

Well plugging — especially dealing with old, poorly maintained wells — has not been a very lucrative endeavor and few companies were around to do this work just a few years ago. That is changing, as new entities spring up to take advantage of public funds. Firms that once made their money drilling shallow wells repurpose their equipment and expertise to plug them.

Last month, the United Mine Workers Union announced it was sponsoring a new registered apprenticeship at its Ruff Creek Training Center in Greene County for oil and gas well-plugging technicians.

Companies that would be hiring such apprentices are still unsure how the current need will be projected into the future.

"It's hard to say long term what this looks like because the [Infrastructure Investment and Jobs Act] funds run out," said Luke Plants, CEO of a Bradford-based plugging company Plants & Goodwin, which is now owned by New York-based firm Zefiro Methane Corp.

The company plugged 15 orphaned wells in McKean County with Jobs Act funds and is waiting for more to be released.

Department of Environmental Protection's Walsh was also mindful of the short window of opportunity available through federal legislation.

"This is a 70-year problem and funding runs out in three years," he said. "If we show good numbers, and the program is really successful, maybe there's an opportunity to extend it into the future."