Possible fix for abandoned wells
Since the onset of Marcellus Shale drilling several years ago, much of Pennsylvania has been environmentally or economically affected. The sedimentary rock formation found thousands of feet under the Earth’s surface is one of the largest shale resources in the country. In accordance with the drilling, two Carnegie Mellon researchers presented a policy analysis discussing the dangers of abandoned gas wells, which can have negative impacts on economic, environmental, and human health concerns. Their research presents feasible economic incentives to solve this state-wide problem.
Austin Mitchell, a Ph.D. student, and Elizabeth Casman, a professor, are both in the department of engineering and public policy in CIT. The two presented their findings in a recent issue of Environmental Science & Technology.
They published their research at a time when Marcellus well drilling is in full swing. Since drilling of Marcellus Shale began in 2007, 2,974 wells have been implemented and 7,388 well permits have been issued in Pennsylvania, according the Pittsburgh Post-Gazette.
Casman and Mitchell’s paper delves into the current environmental, economic, and human health risks associated with deserted gas wells. These wells usually become abandoned when the gas reserves below the well are depleted. The paper specifically mentions that well construction is expected to disturb up to 310,000 acres of Pennsylvanian forest, and that vacant gas wells may also cause permanent changes to their natural location, killing nutrient-rich topsoil and increasing the amount of sediment in fresh water. When a gas well isn’t plugged correctly, the ground water around it can become contaminated, leading to unsafe conditions for residents near it.
Abandoned gas wells are particularly harmful because the risk of groundwater contamination increases over time as the well structures deteriorate. The paper adds that wells can hurt one’s property value and release methane into the atmosphere.
Mitchell and Casman proposed three different financial incentives to help make sure that the state of Pennsylvania has sufficient reclamation funds that would pay for the reclaiming of the deserted wells. The first proposal, an up-front “no-risk” bond, would have the gas drillers pay a fee that would cover the full cost of reclamation before they even break ground. Although this option would protect the state regardless of the well’s prosperity, it would prove the most expensive for gas companies.
The other two options the authors discuss are adding a severance tax on gas production and offering a reduced pre-drilling fee. The severance tax would gradually collect and reinvest monies to total the value of the reclamation. The reduced pre-drilling fee would require an up-front fee like the no risk bond, but would not charge the full cost of reclamation.
These solutions are meant as possible options for the state government. “The main point of this paper was to put the options out there and make the legislators do their due diligence,” Mitchell notes.
In terms of covering reclamation costs, all three of the researchers’ options put greater responsibility on the gas companies than the current Pennsylvania law — the Oil and Gas Act of 1984 — that requires a $2,500 reclamation fee for one well, or a $25,000 “blanket fee” for any wells a company wishes to drill in the state. Estimating that reclamation costs total around $100,000 per well, Mitchell and Casman illustrate that these current fees are not enough to properly cover the costs.
In response to the increased gas drilling, both the Pennsylvania Senate and House of Representatives have put forth new bills that modify the current Oil and Gas Act. Mitchell, however, believes that “both proposals are still very far from where they need to be, and they don’t answer the question of how much [well reclamation is] going to cost.” He plans to travel to Harrisburg next week to meet with legislative aides regarding the published research.
Mitchell, who began his research in February, hopes to make some important changes in Harrisburg. “I am optimistic. I wouldn’t do my work if I didn’t think I could make the world a better place, or inform the debate going on,” he said.