Gas Companies Are Abandoning Their Wells, Leaving Them to Leak Methane Forever
Well No. 095-20708 is also known as A.H.C. Church No. 11, referring both to Hess and to Bernard Church, who like so many in California’s Sacramento River Delta sold his farmland but retained the mineral rights in the hope that they’d make his family rich. The Church well is a relic, but it’s not rare. It’s one of more than 3.2 million deserted oil and gas wells in the U.S. and one of an estimated 29 million globally, according to Reuters. There’s no regulatory requirement to monitor methane emissions from inactive wells, and until recently, scientists didn’t even consider wells in their estimates of greenhouse gas emissions. With the pandemic depressing demand for fossil fuels and renewable energy development booming, why should owners idle or plug their wells when they can simply walk away?
In the past five years, 207 oil and gas businesses have failed. As natural gas prices crater, the fiscal burden on states forced to plug wells could skyrocket; according to Rystad Energy AS, an industry analytics company, 190 more companies could file for bankruptcy by the end of 2022. Many oil and gas companies are idling their wells by capping them in the hope prices will rise again. But capping lasts only about two decades, and it does nothing to prevent tens of thousands of low-producing wells from becoming orphaned, meaning “there is no associated person or company with any financial connection to and responsibility for the well,” according to California’s Geologic Energy Management Division.
“It’s cheaper to idle them than to clean them up,” says Joshua Macey, an assistant professor of law at the University of Chicago, who’s spent years studying fossil fuel bankruptcies. “Once prices increase, they could be profitable to operate again. It gives them a strong reason to not do cleanup now. It’s not orphaned yet, although for all intents and purposes it is.”
The life cycle of the Church well exemplifies this systemic indifference. Hess’s liability ended when it sold more than 30 years ago; the last company to acquire the lease, Pacific Petroleum Technology, which took over in 2003, managed to evade financial responsibility entirely as the well’s cement and steel piping began to corrode. Letters from state regulators demanding that the company declare its plans for the well went unanswered.
By Mya Frazier, Bloomberg Green