Government red tape has long been a problem in Pennsylvania, hindering economic growth and making the commonwealth unattractive for businesses. To address this bureaucratic mess, lawmakers recently approved a new process for Pennsylvania Department of Environmental Protection (DEP) permits, expediting reviews and increasing transparency and accountability.
But reforming DEP still has a long way to go. Those in the gas and oil industry can attest this.
Who’s responsible for the orphans
Gas and oil drilling results in nonproducing wells that need plugging to avoid contamination. Unfortunately, hundreds of thousands of wells remain unplugged.
The vast majority — estimates range between 80 and 99% — of Pennsylvania’s abandoned wells are “orphans,” or wells without an identifiable, documented owner whom the state can hold liable for cleanup. Orphan wells date back to a time of scant records — some as old as the Civil War.
Decommissioning these ancient artifacts is a hot topic in Harrisburg. In April 2023, DEP, the state agency regulating wells, testified that Pennsylvania’s conventional oil and gas industry abandoned more than 3,000 wells in just the last five years.
The conventional industry — primarily composed of small, family-owned businesses, together operating hundreds of thousands of traditional vertical drilling in mostly shallow wells — responded, stating the DEP’s database was incorrect.
In June 2023, the chairman of the Pennsylvania House Environmental Resources and Energy Committee (ERE) held a follow-up meeting to address the discrepancy.
During the meeting, the Sierra Club joined the DEP chorus and presented a chart showing more than 20,000 allegedly nonproducing conventional wells. However, the conventional producers attending the meeting — many of whom the Sierra Club erroneously referenced — recognized that the chart was inaccurate.
“We were shocked to see our company’s name on the screen,” said Judy Saf, secretary of Howard Drilling.
Drillers called out the Sierra Club for the false allegation of excessive well abandonment. After reviewing their data, the Sierra Club admitted the error. After apologizing, the Sierra Club called the situation “weird.”
Unfortunately, things only got weirder. The ERE Committee held another hearing in 2024. At that hearing, DEP testified that the previously claimed figure of 3,000 abandoned wells was wrong. Their new number of abandoned wells was about 1,200.
Arthur Stewart, the president of Cameron Energy and secretary for the Pennsylvania Grade Crude Oil Coalition (PGCC), told the ERE, “It is shameful that DEP allowed its database to be corrupted.”
Still wrong
The numbers, of course, were still wrong. When DEP finally released the data, the conventional industry discovered that the updated list still contained several hundred wells that did not belong, including more than 100 wells that the conventional drillers plugged at their own expense.
How can regulators properly regulate if their baseline metrics are wrong? Furthermore, how can DEP legitimately claim it protects the environment and responsible businesses from unjust fines or fees using inaccurate data?
Could government funding incentivize these faulty numbers? The 2021 Infrastructure Investment and Jobs Act provides federal funding for plugging wells, and Pennsylvania could receive up to $400 million over the next decade. Does more abandoned wells mean more federal dollars going to Harrisburg? It’s certainly possible.
These federally funded efforts also show signs of waste. Last February, DEP, using federal infrastructure dollars, plugged 13 wells on Gerry Schimp’s property in McKean County. However, Schimp asserted the previous owners had properly capped about half of these wells before DEP showed up.
In the first year of using the federal funding, DEP plugged only 200 wells at an average cost of $110,000 apiece.
The private sector is far more effective at plugging wells.
“Our members have plenty of examples of plugging wells for $10,000 or less,” said PGCC President David Clark. “Even the DEP’s average cost to plug a well in our area was less than $18,000 before the federal money came to town.”
Plugging old wells is necessary when drilling new wells in the area. According to Clark, drillers already working in the area — and not bogged down by the red tape of federal dollars — can plug orphan wells quickly.
Clark also stressed that his members are motivated by more than just money. Members of his organization have voluntarily plugged orphan wells when the state or federal government needed help. Clark said his members have stepped up “because they live where they drill.”
“They have children and grandchildren, and they want clean air and water for them,” said Clark.
The state needs drillers
Plugging an orphan well can be especially tricky. Old, rusted-out pipes — buried thousands of feet below — present many unforeseen issues as roughnecks try to seal these legacy wells.
Government regulators need these boots-on-ground drillers if they want to plug more wells. Pennsylvania’s conventional oil and gas industry already does the right thing. These companies provide not only well-paying jobs and a significant tax base for their local communities but also environmental stewardship.
Until the DEP learns to partner with conventional drillers (rather than misrepresent them and allow bad-faith actors to smear them), the problem of unsealed gas and oil wells will persist.
Elizabeth Stelle is director of policy analysis of the Commonwealth Foundation. X: @ElizabethBryan
First Published: August 9, 2024, 9:30 a.m.