Analysis Shows Rate of Wells Plugged Declining 5% Per Year Since the 1990s
(Note: the second paragraph of this story has been updated to reflect the statement of over 30 of the world’s leading climate scientists and atmospheric chemists about the heat trapping potency of methane.)
Ohio passed legislation in 2018 that increased funds dedicated to capping oil and natural gas wells with no identifiable owners or that are bankrupt. Under this legislation, the percentage of the oil and natural gas production severance tax for the Orphan Well Program rose from 14 to 30 percent, allowing for 200 wells to be capped each year.
But an investigation by Checks and Balances Project (C&BP) shows this doesn’t begin to address the enormous scale of the problem in Ohio. Orphan wells can contaminate ground water and leak methane. The pollutant is at least 84 times more potent in trapping heat in the atmosphere than carbon dioxide over a 20 year time span.
“The numbers are so big that it’s not going to be done in my lifetime, my kids’ lifetimes, maybe even my grandkids’ lifetimes,” says Gene Chini, Ohio’s Orphan Wells program manager, in an exclusive interview with C&BP. Chini estimates there could be 100,000 abandoned oil and gas wells in his state.
Ohio Had 35 Year Head Start Over Texas
The first well dug to produce oil in Ohio was in Trumbull County’s Mecca Township in 1859, giving the state a 35-year head start over Texas, where the first well struck oil in 1894. The first commercial natural gas well in Ohio began producing in 1884.
According to a recent analysis, Texas’s Permian Basin could soon have 20,000 orphan oil and gas wells. But Texas isn’t ground zero for abandoned wells. The crown could belong to Ohio.
“We may get more than 200 capped this year. I don’t know,” says Chini. But those 200 will be replaced with an equal number of newly found orphan wells this year.
“We’re getting numerous calls weekly. We got 3 today” about previously unknown abandoned wells. “They tend to find us. We take the worst and do them first.”
At the current rate, it could take Ohio 500 years to cap all of its orphan wells. And that’s not including the state’s share of the Marcellus and Utica shale gas and oil deposits, which are still in production.
Plugging Rate Declines 5% Per Year Since the 90s
“The regulatory structure in Ohio has just not kept up with the industry, which has been developing at rocket speed,” Ted Auch, PhD. of FracTracker told C&BP. When it comes to capping the number of abandoned wells in the state, “the rate at which Ohio has been plugging wells has been declining at a rate of 5% per year since the 90s.”
Ohio’s Severances Taxes Fail to Provide Enough Funds
On April 18, benchmark price for a barrel of West Texas Intermediate crude oil was $62.85. The national average price for natural gas was $9.52 per thousand cubic feet. But Ohio’s severance taxes provide funds to cap polluting orphan wells at a level far below what is needed. For oil, the production severance tax is 10 cents per barrel. For natural gas, the tax is 3 cents per thousand cubic feet.
Ernst & Young produced an analysis for the Business Roundtable on Ohio’s severance taxes in 2014. It ranked the state’s taxes near the bottom of producing states, buttressing former Gov. John Kasich’s proposals for a modest increase. But the tax proposals failed in both 2015 and 2017.
An Orphan Wells Program spokesperson told Together with Farmers that from 2013-2017, Ohio Dept. of Natural Resources spent just over $1 million, plugging a handful of abandoned wells each year mainly on an emergency basis. In 2017, the numbers rose to $6 million to cap 83 wells.
Last year, Chini hired a Texas firm to conduct a magnetic survey using a drone of a property near Findlay in northwestern Ohio. The test found 83 abandoned wells.
“We couldn’t see them,” said Chini.
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Scott Peterson is executive director of Checks and Balances Project, an investigative watchdog blog holding government officials, lobbyists and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.
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