PA Environment Digest Blog: Bill Goes To Governor Creating Well Plugging Grant Program; Senate, House Again Fail To Address Woefully Inadequate Conventional Well Plugging Bonding

On October 26, the Senate and House gave final approval to House Bill 2528 (Struzzi-R- Indiana) that would set aside 20 percent of the new federal funding to plug conventional oil and gas wells for a new Orphan Well Plugging Grant Program.

The bill amends language allowed to become law in July in House Bill 2644-- Act 96 to fix significant problems with the grant program that conflicted with the federal Bipartisan Infrastructure Law well plugging program making it totally unworkable.

The new changes also include provisions prohibiting grants going to conventional oil and gas companies that have any unresolved violations of environmental laws and regulations, something missing entirely from the July statute.

The Senate passed House Bill 2528 by a vote of 47 to 2 and Senate changes were concurred in by the House 198-0.

The bill now goes to the Governor for his action.

Ban On Increasing Bond Amounts Remains

In spite of the fact House Bill 2528 amends the same section of law, no changes were made in the provisions of Act 96 from July that prohibits DEP from increasing well plugging bond amounts for conventional oil and gas operators for 10 years.

That law also makes clear only the General Assembly can increase that amount, not DEP by regulation.

The current $2,500 per well or $25,000 blanket bond for an unlimited number of conventional oil and gas wells is nowhere near the up to $70,000 or more it may cost taxpayers to plug wells. [Note: The $70,000 figure comes from House Bill 2528.]

DEP records show the agency has less than $15 per well available to plug the over 100,500 active conventional oil and gas wells that now have permits because of woefully inadequate well plugging bonding requirements. Read more here.

Conventional oil and gas wells drilled before April 18, 1985, which is most of them, cannot be required to have any well plugging bond by law.

This is all especially troubling because oil and gas well abandonment is pervasive in the conventional oil and gas industry and accelerated during 2022. Read more here.

The bottomline is state taxpayers are on the hook to pay for over $5.1 billion in well plugging and cleanup costs, but even that estimate is low.

-- U.S. Dept. Of Interior Notified DEP A Republican Bill Allowed To Become Law In July May Block Funding For New Federal Conventional Oil & Gas Well Plugging Program [PaEN]

-- DEP Concerned About Impact Of New Law Blocking Conventional Oil & Gas Well Bonding On New Federal Well Plugging Funds, Regulating Waste Injection Wells [PaEN]

-- New Abandoned Wells: DEP Records Show Abandoning Oil & Gas Wells Without Plugging Them Is Pervasive In Conventional Drilling Industry; Who Is Protecting Taxpayers? [PaEN]

-- DEP Issued NOVs To Conventional Oil & Gas Companies For Abandoning 55 Wells Without Plugging Them During September Alone, A Dramatic Increase In New Well Abandonments [PaEN]

-- Only 15 Out Of 256 Conventional Oil & Gas Operators Who Abandoned Wells Without Plugging Them Were Fined By DEP; Small Penalties No Deterrent To Future Abandonments [PaEN]