States have money to fund plugging abandoned oil wells, but numerous obstacles remain to invigorate a new industry

Skilled labor and unique equipment make orphaned well
operations expensive. (Photo by Will Peischel, Grist)

Labor shortages, complex operations and bottlenecks for funding are just a few obstacles facing states and contractors trying to plug hundreds of thousands of abandoned oil wells, reports Will Peischel for Grist. "The exact number of orphan wells nationwide is unknown. In late 2021, The Interstate Oil and Gas Commission, a multi-state organization, had more than 130,000 orphan wells on record but estimated that anywhere between 310,000 and 800,000 remained unidentified."

Abandoned wells leak methane, release air toxins and can contaminate groundwater, but despite their environmental harm, laws and funding to manage old wells have been lacking. Luke Plants, who heads Plants & Goodwin, which specializes in plugging orphan wells, told Peischel, "Until the 1970s, there were no strong plugging standards in place. People just shoving tree stumps down a well to plug it, or a cast iron ball or something like that."

In 2021, the Infrastructure Investment and Jobs Act included $4.7 billion to "help states handle their orphan well inventories," Peischel explains. "The first batch of that money has trickled down to states. . .to contractors like Plants & Goodwin. It's the most funding spent to address the problem, but both states and pluggers are now facing hurdles as they begin to identify and plug wells."

While many states can now fund plugging projects, their oil and gas regulation offices need more staffing to award contracts. Plugging companies have their own hurdles. Peischel reports: "Since oil operators tend to avoid the costly work of well capping, the service has remained a niche industry. . . . Companies have also struggled to find trained workers, not to mention the specialized equipment required to plug wells."

Meanwhile, the oil and gas industry continues to spawn far more orphaned wells than there are pluggers. "Between 2015 and 2022, more than 600 oil and gas companies filed for bankruptcy, leaving thousands of wells unplugged," Peischel writes. "For example, Pennsylvania's list of 20,000 orphan wells grows by about 400 each year; the state has plugged just 73 wells with the federal money that began to arrive last year."

Plugging is complex work: "One capping can take anywhere from three days to three months, sometimes costing more than $100,000," Peischel reports. However, plugging operation owners believe the industry can fill gaps left by extractive industries. "Experts watching the federal orphan well program contend that a well-plugging wave could revive regions whose economic fates are tied to dwindling resource extraction sectors." Ted Boettner, a senior researcher at the Ohio River Valley Institute, a think tank focused on economic and environmental sustainability in Appalachia, told Peischel: "The most positive thing that could happen is that we begin to get more companies plugging wells, especially in rural, distressed areas to help their local economies."