Gov. Tom Wolf is directing the state Department of Environmental Protection to evaluate its regulation of conventional oil and gas wells in order to prevent wells from being abandoned. The review will also tighten transfer of wells and improve compliance while the department will recommend changes in oversight, including the potential for criminal sanctions. The review is outlined in Wolf’s statement, published in the PA Bulletin as he allowed legislation to become law without his signature that keeps bonding requirements for new conventional wells at the current, low $2,500 level for the next 10 years, and outlines the structure for the Oil and Gas Well Plugging Program that will be undertaken with money provided in the federal infrastructure act. “This legislation was the product of a divided government, in which compromise between differing viewpoints is necessary,” Wolf wrote of his decision not to veto the legislation, which was approved by the Republican-controlled legislature. The federal Infrastructure Investment and Jobs Act passed by Congress will provide billions for plugging leaking and abandoned wells, and Pennsylvania is expected to receive about $400 million over the next decade to address the problem. The state Department of Environmental Protection has been ramping up its planning efforts and developing a database of plugging contractors and developing a plan for addressing leaking and abandoned wells. Leaking wells are an environmental and health hazard, putting the potent greenhouse gas methane as well as chemicals including benzene, toluene, ethylbenzene, and xylenes, into the atmosphere and groundwater. In the statement, Wolf outlines his concerns about the structure of the state plugging program contained in the legislation and about the low bonding amount, which is just a fraction of the actual cost of plugging a well and could be a liability to the state if operators choose to abandon wells at the end of production rather than plug them as required. “The legislature's action to withdraw the Environmental Quality Board's authority to establish bonding amounts for the conventional industry provides an appropriate occasion to revisit whether the Commonwealth is doing enough to ensure that this industry is being a good environmental steward by preventing the abandonment of wells and meeting its obligations as a prudent trustee of Pennsylvania's public natural resources for current and future generations,” Wolf’s statement reads. “Evidence on this count is discouraging. Over the past five years, DEP has identified more than 17,000 violations at conventional oil and gas wells, and DEP has issued over 3,300 Notices of Violations to the conventional industry specifically due to attempts to abandon wells since July 1, 2017. In addition, over the past five years, operators of conventional oil and gas wells have failed to report production for an average of around 36,000 conventional oil and gas wells per year.” DEP will review its processes and procedures and make evaluations and recommendations to Wolf by Sept. 1 in the following areas:
Evaluations of the conventional industry’s record to compliance with reporting and performance requirements,
Evaluation of using DEP’s existing authority, including increased civil penalties and bond forfeits, as ways to motivate operators to address abandoned wells,
Recommendations for tightening rules on operators request to transfer permits,
Evaluation of using existing criminal provisions as a deterrent to well abandonment,
Recommendations for regulatory reform of conventional drilling to meet modern best practices.
Research suggests there could be as many as 200,000 orphan wells in the state. At a conservative cost of $33,000 to plug an abandoned well, DEP’s liability ranges between $280 million to several billion, and plugging costs have been increasing in the past decade.