Wednesday, July 25, 2018

DEP Orders Well Operators To Plug 1,058 Abandoned Wells Statewide

The Department of Environmental Protection Wednesday announced it has issued administrative orders requiring three oil and gas companies-- Alliance Petroleum Corporation, XTO Energy Inc., and CNX Gas Company LLC-- to plug 1,058 abandoned conventional oil and gas wells across Pennsylvania.
“With Pennsylvania’s legacy of oil and gas extraction, DEP has an inventory of thousands of abandoned oil and gas wells,” said DEP Secretary Patrick McDonnell. “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.”
The Pennsylvania Oil and Gas Act states that a well is abandoned if it “has not been used to produce, extract or inject any gas, petroleum or other liquid within the preceding 12 months.” The Act requires owners and operators to plug wells upon abandonment.
Alliance, XTO, and CNX self-reported wells that did not produce oil or gas during the 2017 calendar year.
Each company has failed to plug its self-reported abandoned wells and has not provided a schedule to DEP for doing so.
Copies of the orders and a listing of the wells required to be plugged are below--
-- Alliance (a wholly owned subsidiary of Diversified Gas and Oil) – 638 abandoned wells
-- CNX – 327 abandoned wells
-- XTO – 93 abandoned wells
Companies must provide schedules to DEP that prioritize plugging activities for wells that pose the greatest environmental or public health and safety risk.  
The orders include deadlines by which each company must plug their abandoned wells. The order also directs each company to provide copies of well inspection records, document the plugging activities, and remediate each well site according to state regulations.
An amendment to the 2012 Pennsylvania Fiscal Code set bonding amounts for conventional oil and gas wells at $2,500 per well or a blanket bond of $25,000 for all wells owned by an operator.
Costs can vary greatly depending on the well conditions, but generally run between $10,000 and $100,000 per well.
DEP estimates that hundreds of thousands of oil and gas wells have been drilled in Pennsylvania since 1859, much of this activity predating applicable regulations or the existence of DEP or its predecessor agencies.
While it is not known how many orphaned and abandoned wells exist, estimates range from 100,000 to 560,000 wells. DEP works with communities and nonprofits to identify and map these wells.
DEP has plugged 3,066 wells from 1989-2017 and provides incentives for non-government entities to expedite well plugging.
For more information on abandoned and orphaned wells, visit DEP’s Abandoned & Orphan Well Program webpage.

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