WASHINGTON — Oklahoma is set to receive a federal grant to begin addressing an orphaned oil and gas well problem that has plagued the state for decades. Since the discovery of oil in the late 1800s, an estimated 500,000 oil and gas wells have been drilled statewide.
The U.S. Department of the Interior said Oklahoma will receive $25 million to plug an estimated 1,196 orphaned oil and gas wells as part of the Bipartisan Infrastructure Law passed in November 2021. That’s less than 10 percent of the 17,865 uncapped wells across the state, according to a 2021 report by the Interstate Oil and Gas Compact Commission.
Matt Skinner, director of public information for the Oklahoma Corporation Commission, said this is expected to be only the first round of funding.
“This is just the first shot of money into the program,” Skinner said. “We intend to continue our applications as more money becomes available.”
The grant comes from phase one of a $4.7 billion investment from the federal government to plug orphan oil and gas wells across the country.
Oklahoma representatives have sought to mediate this issue through congressional legislation. U.S. Rep. Frank Lucas (R-OK3) and U.S. Rep. Stephanie Bice (R-OK5) introduced the Abandoned Well Remediation Research and Development Act in July 2021, which would improve data collection of well locations while advancing states’ plugging and environmental remediation efforts.
“In Oklahoma, we have thousands of abandoned wells with an average cost of $40,000 to $70,000 to properly close,” Lucas said. “For some sites, the costs could rise to nearly $1 million. This legislation will help us identify new materials and advanced techniques to find and manage abandoned wells, which will help our environment and our energy sector.”
The bill was ordered to be amended in January of this year and remains stuck in Congress.
In a news release about the grants, the U.S. Department of Energy said Oklahoma plans to give priority to “wells that pose the greatest threat to health and human safety, the environment and personal property.”
With the federal funding, the OCC will look broadly at its database of abandoned wells and tackle individual cases based on the categories they fall into. “Purging wells” fall into the category of highest priority, as they are wells that are actively leaking salt water, oil and gas into nearby water and soil.
The federal government expects the funding to assist environmental justice communities, which have been disproportionately affected by orphan oil and gas wells and tend to have lower income levels.
Operators have obligation to plug old wells
Uncapped wells can pose serious threats to the environment and residents of nearby communities. The Department of the Interior lists methane leakage from wells as a serious contributor to climate change. Methane is 25 times as potent as carbon dioxide at trapping heat in the atmosphere.
Catalin Teodoriu, a professor at the University of Oklahoma’s Mewbourne School of Petroleum Engineering, said the primary environmental risk involves the release of uncontrolled fluids into the near vicinity. Such fluids can include anything from remaining oil and gas in the well’s reservoir to saltwater leaking from an unsealed zone.
While the wells present obvious environmental threats, plugging them can be a complicated and expensive process, costing anywhere from $25,000 to hundreds of thousands of dollars.
The responsibility for plugging wells falls upon the well operator, Skinner said.
“Anybody who’s in the business has to plug their wells,” he said. “And then if we have to come in and plug them, we get the money from them. We will take them to court if needed.”
Penalties assessed against the owners of unplugged wells fall under the jurisdiction of the Oklahoma Corporation Commission, which oversees the oil and gas industry in the state.
Under Title 165, made effective by the commission in October 2021, any operator who fails to comply with the requirements for plugging and closure of a well can be fined up to $500. To operate a well in the state, the OCC requires proof of financial net worth of at least $50,000 and a surety to the commission in the amount of $25,000 as an insurance policy that an operator will be capable of plugging a well once it is taken out of service.
Skinner said Oklahoma’s number of unplugged wells is high for a number of reasons, including a change in plugging standards. Today, wells must be plugged with at least 10 feet of cement or other material approved by OCC’s Pollution Abatement Department. From the early 1900s through the 1950s, operators plugged wells with certain types of “drilling mud,” a clear violation of today’s standards. While technically plugged, the wells are included in the orphaned well count.
Additionally, accurate records of wells were not kept throughout Oklahoma’s long drilling history. Wells, some of which were drilled over 100 years ago, often do not have the proper documentation of plugging or ownership. If there is no paperwork reflecting a well has been properly plugged, the Corporation Commission assumes it has not been.
“It’s not a matter of if [the well] is going to purge, but when,” Skinner said, referring to when an improperly plugged well begins to leak wastewater, oil or gas.
(Correction: This article was updated at 10:10 a.m. Tuesday, Sept. 27, to correct references to well plugging.)