OUR THOUGHTS ON:

A Whole Lot of Wells, Not a Lot of Money

Energy & Resources

By Kira Waugaman

Within Pennsylvania lie masses of unplugged and abandoned oil and gas wells. While that may elicit a “so, what?” response from the general public, the problem with these wells arises from the slew of issues that come along with them. The wells can actually be quite dangerous, as they harbor the potential for the remaining oil and gas to reach the surface, where it can lead to the pollution of local water sources, create explosion hazards and affect climate change. But how many, exactly, is “masses?”

According to an online article issued on November 28, 2017 for the Pittsburgh Post-Gazette, there is some debate on how many abandoned wells actually exist within the state. In 2016, it was reported by Stanford University researcher Mary Kang that Pennsylvania could be harboring from 470,000 to 750,000 wells, though a more recent report by Terry Engelder, professor emeritus of geosciences at Penn State, cites that number as closer to 252,000.

As specified in the Post-Gazette article, the discrepancy in the amounts reported can be traced to several factors. Kang’s study, for instance, considered recovery wells that were unaccounted for in historical records. Engelder disputes that conclusion, however, saying that these wells were in fact accounted for in records. Kang recently stated that she is performing additional research (not yet published) that leans toward the number of abandoned wells being similar to the amounts reported in her 2016 paper. To complicate matters further, the two researchers also used different multiplier factors within their estimations.

Whatever the case, even a total of 1,000 abandoned wells can pose problems. The Pennsylvania Department of Environmental Protection (DEP) is currently responsible for tackling the monster. But as Program Manager Seth Pelepko notes, “DEP is aware of about 8,000 of these wells right now; that’s the inventory we have in our database.” And while the agency recognizes at least that number of wells, the money needed to plug them falls significantly short.

So with only about $600,000 available, the DEP has developed a plan comprising approximately 500 projects that involves plugging multiple wells at one time, which can ultimately reduce costs. These projects don’t necessarily address the most risky wells first, however, since prioritizing wouldn’t allow the agency to cover as much ground with the relatively small amount of money available.

As some support, another $657,000 in grants was recently awarded by the Commonwealth Financing Authority to cover the cost of plugging (just) three more abandoned wells. So whether the number of actual unplugged wells in Pennsylvania is 8,000 or 750,000, it’s clear that a funding solution to take care of the problem could use some re-evaluating. For more information on our energy and resources services, contact us. 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

comments