Tax credits proposed as funding for orphan well plugging

(The Center Square) — Pennsylvania has hundreds of thousands of orphan and abandoned gas and oil wells scattered across the state.

More state and federal money has been dedicated to cleaning them up, and a legislative proposal could create a tax credit to spur more action.

Senate Bill 1330, introduced by Sen. Gene Yaw, R-Williamsport, would sell alternative energy credits to raise funds for well plugging, which he estimated would bring in about $230 million.

“This legislation provides for a dedicated and recurring revenue stream that will address several thousand more sites than Pennsylvania could with just federal money alone,” Yaw said in a press release. “There is no reason we can’t and shouldn’t leverage these credits to help fill the gap.”

Defunct oil and gas wells are scattered across dozens of states, but Pennsylvania and Ohio have an outsized problem due to oil and gas exploration starting in the mid-19th century. The Department of Environmental Protection has documented about 30,000 orphan wells (which have no existing owner), but hundreds of thousands of wells remain undocumented.

DEP has hired dozens of workers to grow its well plugging program, but getting the work done isn’t easy. Many of them are hidden away in the ravines and forests of western and northern Pennsylvania, obscured by bush and branch, and difficult to access.

Critics have noted the state data can be flawed, and plugging is expensive. Private pluggers have called the $110,000 per well price tag “outrageously enormous” compared to what they average.

In July, Gov. Josh Shapiro announced $11 million for well plugging and on Tuesday launched a $76 million grant program that offers $40,000-$70,000 to plug wells.

“Orphan wells can leak methane, a potent greenhouse gas, into the atmosphere and pollute groundwater. It is not a matter of ‘if’ an orphan well will be a threat to the environment and public health – it’s a matter of ‘when’,” DEP Acting Secretary Jessica Shirley said in a press release. “This new program will allow private entities to plug lower-risk and lower-cost orphan wells while DEP focuses on priority wells that can be more expensive to plug. Plugging these orphan wells creates good-paying jobs and improves the environment. We are encouraging any qualified well pluggers to apply and help improve the economy and the environment.”

Though the vast majority of orphan and abandoned wells are decades-old, the administration promised to crack down on any current well operators who don’t plug their wells.

“DEP is aggressively going after operators who are walking away from wells and stepping in with emergency plugging contracts where needed to protect public health. Through IIJA funding and existing state funding for DEP, the Commonwealth is moving aggressively to tackle this massive contributor of greenhouse gases,” the governor’s office said.