Tuesday, June 21, 2022

Who’s Protecting Taxpayers? House Republicans Pass Bill Exempting Conventional Oil & Gas Wells From Plugging Bonds Sticking Taxpayers With $5.1 Billion In Cleanup Liability

On June 20, House Republicans passed legislation blocking any increase in conventional oil and gas well plugging bonds, exempting pre-1985 wells (which is most of them) from any bonding leaving taxpayers liable for $5.1 billion in cleanup costs.

The party-line vote was 109 to 91, Democrats largely opposing.

The House also passed a second bill that would mandate DEP award oil and gas well plugging contracts to Pennsylvania contractors, with no regard for cost to state taxpayers.

The bills now go to the Senate for action.

[Note: Watch out for this language to show up unannounced in a budget-related Administrative Code or Fiscal Code bill.  The conventional and unconventional drilling industries have done it before.]

Blocking, Exempting Oil & Gas Wells From Bonding

The bond blocking legislation-- House Bill 2644 (Causer-R-Cameron)-- was introduced to head off a proposal accepted for study by the Environmental Quality Board in November to increase the well plugging bonding amounts for both conventional oil and gas and unconventional shale gas drillers to what it now costs taxpayers to plug a well when operators walk away from their obligations.  Read more here

The public description of the bill provided by the prime sponsor tries to camouflage the real operational language and purpose of the bill.  Just read the bill, you’ll see.

The legislation would lock in law the bonding amounts for conventional wells at $2,500 per well, when the average cost to taxpayers of plugging conventional wells is $33,000.

The bill also allows operators to file a blanket bond of a total of $25,000 for all the operator’s wells in the state, of which individual operators have hundreds.

The bill again puts in law again a provision exempting oil and gas wells drilled prior to April, 1985 from being required to have any plugging bond.  An overwhelming majority of the over 110,000 active oil and gas wells in Pennsylvania were drilled before April 1985.

DEP records show conventional oil and gas companies were issued over 4,270 notices of violation for attempting to abandon oil and gas wells without plugging them between 2016 and 2021.  Abandoning wells is pervasive in the industry.  Read more here.

During the first quarter of 2022 DEP issued 77 notices of violation to conventional operators for attempting to abandon their wells without plugging them, and those were the ones DEP caught.  Read more here.

Taxpayers are now liable for paying over $5.1 billion to plug conventional oil and gas wells operators have already abandoned or are inadequately bonded to pay plugging costs.  Read more here.

The new well plugging program established in the federal Bipartisan Infrastructure Act requires states to review their regulations to prevent new wells from becoming abandoned wells.  Making sure well plugging amounts are adequate to cover the taxpayer cost of plugging them is a big part of that prevention effort.  Read more here.

By preventing any increase in the woefully inadequate bonding amounts DEP has now, this legislation gets in the way of that requirement and further burdens taxpayers.

The bill would also set aside 20 percent of the federal money Pennsylvania is receiving from the Bipartisan Infrastructure Act for conventional oil and gas well plugging to be used as grants to companies interested in plugging wells with few qualifications and no check on whether they have outstanding environmental or other contracting violations.  Read more here.

The bill also sets limits on how deep a well must be plugged in terms of feet not in terms of the effectiveness of the plug in cutting off possible routes to contaminate ground or surface water and preventing methane emissions.

The bill also provides well plugging companies with civil immunity from any damage it causes and for any violations of environmental laws and regulations.

No Consideration Of Taxpayer Cost

A second bill-- House Bill 2528 (Struzzi-R-Indiana)-- would mandate DEP award oil and gas well plugging contracts to Pennsylvania contractors, with no regard for cost to taxpayers.

House Bill 2644 and House Bill 2528 are total giveaways to the conventional oil and gas industry and continue to make taxpayers liable for cleaning up billions of dollars of the environmental mess they leave behind.

(Photo: Republicans burning the hard-earned money of state taxpayers.)

Related Articles:

-- Attorney General’s Office Reported To Be Investigating Conventional Oil & Gas Operators For Illegally Road Dumping Drilling Wastewater 

-- On-Site Conventional Oil & Gas Drilling Waste Disposal Plans Making Hundreds Of Drilling Sites Waste Dumps 

-- Senate Hearing: Body Of Evidence Is 'Large, Growing,’ ‘Consistent’ And 'Compelling' That Shale Gas Development Is Having A Negative Impact On Public Health; PA Must Act 

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

-- Quarterly Report: DEP Issued 77 Notices Of Violations To Conventional Drillers, 8 To Shale Gas Drillers For Attempting To Abandon Wells Without Plugging Them  

-- DEP To Prohibit Conventional Oil & Gas Drillers With Unresolved Environmental Violations From Getting Conventional Well Plugging Contracts; 133 Companies Interested In Doing Well Plugging Work 

-- Financial Assurance, Plugging Regulations To Be Reviewed To Prevent New Abandoned Oil & Gas Wells Under Federal Bipartisan Infrastructure Law Plugging Program 

[Posted: June 21, 2022]  PA Environment Digest

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