Abandoned Oil Wells Continue To Be A Problem In the U.S.

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oil well

Environmentalists and the state governments have been fighting to get abandoned oil wells
plugged for decades without avail. Although the situation has improved in recent years,
thanks to improved efforts by oil and gas companies and both state and federal funding,
there continues to be an abundance of oil wells across the country that were never
decommissioned to be made safe. Abandoned wells can leak toxic gases, such as methane,
which are detrimental to the health of populations in the surrounding area and the environment, making it highly important that the wells be rapidly plugged.

Abandoned Wells in the U.S.

Over a century of oil exploration in the U.S. has left thousands of abandoned oil wells in its
wake. Around 4.5 million oil and gas wells have been drilled in the U.S. since the 1850s, with around 3.5 million of these wells being abandoned as they could no longer be used for
production. While some of these wells were plugged before they were left, using filling and
sealing materials, some were not formally decommissioned. If a well is not properly plugged, it can emit methane and other harmful gasses, leach contaminants into the
surrounding soil and water, and create safety hazards – preventing the surrounding land
from being used for other purposes.

In 2018, the Interstate Oil and Gas Compact Commission recorded just over 60,000 orphan wells nationwide, a figure that later rose to over 130,000, according to a 2021 study. The Environmental Protection Agency (EPA) estimated that non-producing oil and gas wells emitted  275,000 metric tons of methane in 2020 , equivalent to the emissions produced by around 1.7 million gasoline vehicles.

While there has been an increasing call for greater environmental awareness in recent
years, with activists and the government putting pressure on oil and gas companies to
formally decommission their wells, this often still fails to happen. While major companies
typically follow these practices, some smaller companies cannot afford to do so. Further,
hundreds of bankrupt oil companies have left orphaned wells in their wake, which the
government must plug.

Federal Funding

In 2021, the Biden administration approved the Bipartisan Infrastructure Law, which
provided $4.7 billion in federal funding for states and federal agencies to carry out well-
plugging activities. This money was earmarked for “orphan wells” that have no owner.
Adam Peltz, a lawyer with the Environmental Defense Fund, an advocacy group, stated
“There has never been federal money made available to plug these wells.” This shows the
severity of the situation, with thousands of orphaned wells having been left unplugged for
several decades due to a lack of federal funding to fix the issue.

Plugging these wells is extremely costly, with the closure of a single well costing up to tens
of thousands of dollars. The federal National Park Service began a project to identify the
dirtiest orphan wells over more than 84 million acres of federal land to plug them.

Efforts Still Falling Short

West Virginia is home to thousands of orphaned oil wells and the state government has long been working hard to fix the problem. As part of the federal funding plan, the state will receive around $117 million in formula grant funding and potentially another $70 million through the performance grant to address the problem. Previously, the state was
responsible for plugging old wells independently, without federal support.

The recent boost in federal funding for the decommissioning of orphan wells is expected to
speed up the process, helping to plug as many as 1,700 wells. However, this is only around
26% of the documented orphaned wells in West Virginia, with far more undocumented
wells still out there. This is mainly because many wells were drilled before 1929 when they
were not required to be registered with the state. Further, more wells are expected to
become orphaned in the future, which must be considered.

Holding Oil and Gas Companies Responsible

In January, the oil major Chevron stated it would take non-cash write-downs on U.S. oil and gas production for decommissioning abandoned wells and pipelines in the U.S. Gulf of
Mexico that had been previously sold. This is expected to total somewhere between $3.5
billion and $4 billion. Chevron and other companies have contested claims that they must
pay to plug wells that were sold to Fieldwood Energy and firms that went bankrupt in 2020.
The bankruptcy places the responsibility of paying to plug Fieldwood’s abandoned wells on
the former owners, which includes Chevron.

The U.S. has increasingly placed the burden of decommissioning orphan wells on oil majors, to reduce the burden on the state and hold oil and gas companies responsible for ensuring that they adhere to higher environmental standards. The combination of federal funding and improved efforts by oil and gas companies to plug orphan wells is expected to improve the situation in the U.S. in the coming years. However, significantly more funding will need to be made available to ensure that all the country’s abandoned wells are identified and decommissioned in the coming years.

Felicity Bradstock is a freelance writer specializing in Energy and Industry. She has a Master’s in International Development from the University of Birmingham, UK, and is now based in Mexico City.

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