Orphaned oil and gas well stimulus—Maximizing economic and environmental benefits

Abstract

Orphaned oil and gas wells are abandoned wells for which the cost of environmental impacts usually falls on governments and the general public. Government agencies responsible for well plugging often face funding shortfalls and many orphaned wells remain unplugged. To address this and support the oil and natural gas industry, federal governments are already spending, or considering spending, billions of dollars to plug orphaned oil and gas wells. Here, we analyze oil and gas data for the United States and Canada and identify policy recommendations that can best address environmental impacts of abandoned and orphaned wells. At least 116,245 wells across 32 states and four Canadian provinces/territories are operated by companies filing for bankruptcy in the first half of 2020, which may be an indication that many wells will be orphaned in the near future. Moreover, there are 4,700,000 historic and active oil and gas wells in the United States and another 790,000 in Canada. Of these, 2,000,000 and 310,000 wells are active in the United States and Canada, respectively. Thus, three of five wells ever drilled in the United States are currently inactive (2,700,000 wells), but only one in three are plugged (1,500,000 wells). Plugging involves isolating zones containing oil, gas, and water and is the main strategy for well abandonment. If the orphaned well stimulus funding comes through, tens of thousands of wells will be plugged within a few years. Well plugging at this scale far exceeds current rates of plugging, and it is important that we work to ensure long-term environmental benefits of well abandonment to water, air, climate, ecosystems, and human health. Minimizing environmental impacts of the millions of abandoned and orphaned wells in the United States, Canada, and abroad will allow for an economically beneficial and environmentally safe transition to a carbon-neutral economy.