The Pennsylvania Department of Environmental Protection (DEP) estimates that there are between 100,000 and 500,000 abandoned, unplugged wells in the commonwealth, and now it is trying to stop almost 1,100 more from adding to that count. In late July, the DEP issued administrative orders to three oil and gas companies, Alliance Petroleum Corporation (a subsidiary of Diversified Gas & Oil), CNX Resources and XTO Energy, to plug abandoned wells throughout Pennsylvania.
“It is critical that all operators adhere to state laws to mitigate the environmental and public health and safety hazards and not add to the costly orphaned and abandoned well inventory that would otherwise fall on the shoulders of Pennsylvania citizens,” DEP Secretary Patrick McDonnell said in a written statement.
According to Pennsylvania’s 2012 Oil and Gas Act, a well is considered abandoned if it does not “produce, extract or inject any gas, petroleum or other liquid” for a 12-month span. The law also requires owners and operators to submit a schedule of plugging activity for their abandoned wells. Wells are idled for various reasons, such as when it does not turn a profit. An inactive well can be turned back on within a year to avoid being considered abandoned, and if not, as in the case of these 1,058 wells, the commonwealth can order the well be shut off for good.
Of the combined 1,058 abandoned wells, Alliance is responsible for 638, CNX for 327 and XTO for 93. Many of these wells were discovered through an investigation triggered by a wave of well transfer forms initiated by the three companies that included wells idle for all of 2017. With an estimated price tag of anywhere between $10,000 and $100,000 to plug each well, Alliance, CNX and XTO are looking at significant commitments for plugging, money that could be put towards future drilling activities.
The administrative orders allow 60 days for each company to respond with a plan for plugging the wells; however, there is an option to appeal to the Environmental Hearing Board. As the order currently stands, Alliance and CNX must each plug at least 30 wells per quarter beginning October 1. XTO must plug 15 wells per quarter. CNX and XTO are required to complete plugging activity by 2020, while Alliance has until 2023.