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HARRISBURG — Across Pennsylvania, unplugged oil and gas wells are spewing powerful greenhouse gases into the atmosphere, contaminating soil and water.
Last year, the Pennsylvania legislature stripped an independent commission of its authority to use tools designed to prevent drillers from abandoning wells without plugging them.
Democrats are now in control of the state legislature, and efforts are underway to reverse that decision.
The state House Environment, Resources and Energy Committee on Tuesday passed legislation that would restore the ability of the Environmental Quality Committee to raise bond prices for traditional drillers, in line with party policy.
This bill Block hundreds of thousands of abandoned and isolated conventional oil and gas wells in Pennsylvania. The state will receive hundreds of millions of dollars in federal funding over the next five years to close these wells, but that funding will only cover a fraction of what is needed.
The bill faces a long and bumpy road to legislation, but some environmentalists and lawmakers say the bill will not solve the federal regulatory flaws.
Central to the bill is a security deposit, intended to prevent developers from leaving a well unplugged after it is taken out of service.
Individuals and businesses looking to dig new wells in Pennsylvania are required to post a security deposit, similar to how landlords leave security deposits. If a well has been inactive for at least one year, the state declares the well abandoned and requires the operator or owner to plug the well.
If the drillers fail to do so, the State Environmental Protection Agency can seize the bond and plug the well itself. But in practice, agencies rarely do that.
In a recent report, the DEP said: report Two bonds totaling about $50,000 were seized from uncooperative well operators between 2017 and 2021, a figure cited by at least one Republican lawmaker as evidence that forfeiture is not an effective means. It is An agency spokesperson told Spotlight PA that figure would be even higher when considering 2022, or 11 bonds, worth about $423,000.
Historically, there has been a difference between the cost of a bond and the cost of a well bottle opener, Specification Congressional approval last year further cemented the chasm.
The law was enacted in July last year, without the governor at the time. Tom Wolfe’s signature freezes the security deposit cost of a single conventional well at $2,500 for the next 10 years. By comparison, DEP estimates the current average cost. A single well bottle opener costs $33,000 and can go as high as $800,000.
Prior to the enactment of this law, the Environmental Quality Board, an independent committee that oversees regulations set by the DEP, Permission to adjust costs It issues bonds every two years.
Lawmakers on both sides of the aisle acknowledge the DEP’s limited success in plugging hundreds of thousands of abandoned wells across the state. But how to do that is partisan rift.
Many Democrats believe that the DEP should actually do the logistical and legal work necessary for the seizure to stop drillers from eating up the cost of abandoning the well simply by forfeiting bonds. To do so, states need the power to set higher bond prices. bond.
Meanwhile, many Republican lawmakers argue that too few conventional wells are being drilled to justify imposing higher bond prices on the shoulders of drillers. Conventional drilling is an older extraction method that uses relatively shallow wells, practiced in Pennsylvania for over a century. However, in the last 15 years, unconventional drilling involving deeper wells used for hydraulic fracturing has dominated the federal oil and gas industry.
For unconventional wells, bond prices are significantly higher, including initial costs ranging from $35,000 to nearly $500,000, depending on the number and depth of wells drilled.
State Rep. Greg Vitali (D.D.) is one of the legislators leading the effort to put power back in the hands of the state. He hopes the Environmental Quality Board will introduce legislation that would allow the bonds to be priced again, thereby further discouraging individuals and companies from abandoning wells without plugging them. there is He is chairing the committee that passed the bill on Tuesday.
“If these wells continue to be abandoned, the public will ultimately pay for them. He said at a meeting before the bill was voted on.
Vitali said he wants to go one step further and push for legislation that would raise the cost of corporate bonds for traditional drillers. But he said he compromised by giving the board flexibility on pricing to increase the chances of the bill being passed.
“The reality is that we are dealing with a very conservative Senate,” Vitali said. “In a perfect world… I would have stuck to the original bill. But the reality is I would be dead on arrival.”
Rep. Martin Corsar (R-McKean), the minority chairman of the committee, voted against the bill, emphasizing that the DEP did not seize the bonds.
“If this is a big question, why only two bonds?” Coser asked at the Environment Committee. meeting In April, he mentioned the DEP’s bond foreclosure rate over the past five years. “You already have the tools, and increased coverage will impact the industry.”
Coser said the focus should be on plugging isolated wells (wells abandoned before April 1985) rather than plugging all abandoned conventional wells.
DEP Acting Deputy Director Kurt Krapkowski said the lack of foreclosures reflects the ministry’s scarce resources, which often lose time and money claiming low bond prices. claimed. Kaprovsky said the costs and resources involved in bail confiscation are often worth more than the amount the ministry recovers.
“We’ve been making decisions about where to put our enforcement resources, but we’ve decided that those resources would be better spent elsewhere,” Krapkowski said at the same April meeting.
Many environmentalists have argued for years that the DEP is underfunded and unable to fulfill its mandate. But the upcoming influx of money from the Federal Infrastructure Investment and Jobs Act has given some of them hope. DEP is using some of these funds Hire 40+ additional staffmainly to speed up the process of plugging the well.
Other environmental activists, such as Laurie Barr, co-founder of oil well advocacy group Save Our Streams PA, say that even with the DEP’s powers to change bond prices, the oil and gas industry is in danger. I doubt it can be regulated.
“Even if they had the ability to raise bond prices… I don’t know if they would,” Barr said, adding that even if the Environmental Quality Board had that power, it would not have raised bond prices. .
Barr argued that there is a culture of respect for the oil and gas industry across the legislature and that the DEP is following legislators’ lead. He pointed to Wolfe’s veto over a bill that would strip the board of authority to set bond prices. Instead, he made it into law without signature.
But Barr also said part of the blame lay with the department’s staff and what she described as a lack of commitment to oversight.
“They aren’t doing their job. They have the tools and the capabilities. The reason they can’t do it is because they simply don’t have the will,” Barr said. “It’s the fox guarding the chicken coop.”
According to a report released by the ministry last December, almost Two-thirds of the wells are developers has failed to submit annual production reports for the years 2017-2021, whose authors said the DEP has the necessary legal powers and tools to oversee the oil and gas industry. agreed with the opinion.
The report added that the ministry needed more resources, especially more inspectors, field inspectors and geologists, but did not ask Congress for more funding.
oil and gas drillers, have considerable influence in lobbying circles in Harrisburghas opposed regulatory reforms such as bond price hikes.
Arthur Stewart, president of Cameron Energy Company, said not enough conventional wells are currently being drilled to justify bond price hikes, and that such price hikes would be detrimental to conventional drillers in the Commonwealth. He said the drilling cost would be too high.
“We understand the concept of why bonds are used in different commercial practices. But that should lead to the next question: ‘Do bonds help here? rice field. “This means no money is available to buy equipment or pay wages.”
According to the latest annual report of the DEP Oil and Gas Administration: 130 conventional wells drilled In 2021.
Stewart’s opinions carry weight and can shape policy. He is a driller as well as a member of the state’s Grade Crude Oil Development Advisory Board, working with the DEP to review and recommend policies related to the traditional oil and gas industry.
Vitali’s bill is still unclear as to how it will move through the legislative process. The bill must first pass both the state legislature and the Senate before it can be brought to the attention of Democratic Gov. Josh Shapiro.
A spokesman for House Majority Leader Matt Bradford, D-Montgomery, said the Democratic leadership in the chamber would consider the bill after it passed the committee. A spokesman for Senate Majority Leader Joe Pittman, Republican, Indiana, declined to comment on whether the bill would be considered in a Republican-controlled chamber.
A spokesman for Mr. Shapiro said the administration has broad support for the bill, but said it was still in its early stages.
“The Shapiro Administration supports the restoration of the Environmental Quality Commission’s bond adjustment authority,” the spokesperson said, adding, “We look forward to continuing to work with our partners at the General Assembly as this bill moves through the legislative process. there are,” he said.
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https://www.spotlightpa.org/news/2023/05/pa-legislature-abandoned-oil-gas-wells-bond-prices-climate-change/ Pennsylvania Discusses How to Deal with Abandoned Oil, Gas Wells Spotlight PA