Federal rules push well plugging cost to $100,000

(The Center Square) — As Pennsylvania’s orphan well-plugging program ramps up, state officials seem optimistic about the albeit bumpy road ahead.

Cost estimates, for example, are up, driven by federal requirements and supply issues.

Pennsylvania has plugged 200 orphan wells under Gov. Josh Shapiro as the state kicks in more money to complement a massive increase in federal funds that are part of a national effort. The orphan wells, out-of-commission sources of natural gas and oil with no ownership, are scattered across the commonwealth.

The decades-old wells are in out-of-the-way places and plugging them cheaply is no simple matter. State officials at first estimated it would take $68,000 per well, but costs have since climbed.

“We’re a little bit north of $100,000 per well in the initial grant contracts,” said Kurt Klapkowski, acting deputy secretary of the office of oil and gas management in the Department of Environmental Protection during a Tuesday meeting of the Oil and Gas Technical Advisory board.

Klapkowski said federal prevailing wage requirements “played a large role” for higher costs, along with bids being higher due to risk. Orphan wells vary dramatically, and the less that is known about a well means that more things could go wrong, which drives up the cost to plug.

The high initial costs aren’t too surprising. Some pluggers argue that states want to get as many wells plugged as they can at first to show quick results, rather than prioritizing dangerous wells.

Shapiro has proposed $11 million in his latest budget to plug more wells, in addition to the $25 million already received from the federal government (with almost $500 million total to come from the federal government over the next several years). One report argues that the influx of funds could create thousands of jobs across northern Appalachia and prepare the region to plug wells for decades.

The work the DEP is doing now, Klapkowski said, will build the foundation for a “70-year or 80-year program.”

During budget hearings, DEP officials noted they would hire dozens of workers to prepare the wells for plugging.

“The idea here is that we're going to be cost-effective, we're going to be efficient, we’re going to be able to put our resources into place to be able to deal with these issues,” Klapkowski said, “so that we’re not just running around the woods looking for these old wells but we’re actually targeting areas for confirmation and investigation and prioritization going forward.”

Plugging the wells isn’t a uniform or simple process. DEP officials must check legal records, work with landowners to reach the wells, and coordinate with pluggers. Many of these wells are little more than holes in the ground, covered in leaf litter and underbrush.

Well plugging companies would like to see multi-year contracts to plug more wells and provide funds to scale up their effort; Klapkowski cited some frustrations he’s heard so far.

“This is an art, it’s really not a science,” Klapkowski said. “It takes time to get workers trained up to be able to do that work effectively and efficiently.”

But despite the hurdles, DEP staff is hopeful about the task that lies ahead.

“It’s something that I’m really excited about and it’s something I think our staff is really excited about,” Klapkowski said.