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'Green stimulus' to plug wells, could create oil jobs, cut emissions – report

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'Green stimulus' to plug wells, could create oil jobs, cut emissions – report

The U.S. government could cut methane emissions and provide jobs for hundreds of laid-off oil rig workers by using some coronavirus aid to plug abandoned oil and gas wells across the country, a new report said.

"A significant federal program to plug orphan wells could create tens of thousands of jobs, potentially as many as 120,000 if 500,000 wells were plugged," Columbia University's Center on Global Energy Policy and energy and environmental economics think tank Resources for the Future said in a July 20 report urging what the authors called a "green stimulus for oil and gas workers."

The total number of abandoned, or "orphaned," oil and gas wells in the U.S. is estimated to range as high as 3 million. Many were drilled more than a hundred years ago and abandoned as operators went out of business or walked away from wells with low production. They are often found by property owners or developers who stumble onto the sites.

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The report envisions states receiving federal dollars to plug wells, which could provide job opportunities for the 76,000 oil and gas workers laid off since February. Reclaiming orphaned wells is similar to the process of drilling and completing new wells and requires much of the same equipment and expertise.

North Dakota is already operating one such program. The state's Industrial Commission in June authorized spending $33 million of federal coronavirus aid money to plug 350 wells across the state, maintaining 500 to 600 oil and gas jobs, and it is pursuing another $33 million to expand the program.

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"The major advantage of running a program through states is that many states already have regulatory structures and processes to administer a well-plugging program," Resources for the Future senior research associate Daniel Raimi, one of the report's authors, said. "The [U.S.] Bureau of Land Management does administer its own well-plugging program, but this program is small relative to programs in Texas, for example, and it does not necessarily have the state-level expertise that state regulators do."

One state that would welcome help in plugging old wells is Pennsylvania, where oil drilling began with the Drake well in 1859, a spokesman for the state's Department of Environmental Protection, or DEP, said. "There are currently over 8,000 unplugged or inadequately plugged wells on Pennsylvania's official books, over 1,000 more in the process of being evaluated as a result of recent company bankruptcies, and possibly hundreds of thousands more that are unaccounted for based on peer-reviewed literature," DEP spokesman Neil Shader said. "The question of plugging wells has often been an issue of a lack of resources for DEP; we have the expertise to plug the wells, just not the resources."

The good news, according to Shader and the report's authors, is that the bulk of older wells are shallow and simple, and plugging them should be relatively inexpensive.

Not all wells will be low-hanging fruit, the report cautioned. For example, plugging wells near groundwater sources and restoring the surface to contemporary standards can be a complex and expensive undertaking. The Columbia report estimates that plugging the 56,600 known orphaned wells will cost between $1.4 billion and $2.7 billion. To find and plug another 500,000 wells could cost between $12 billion and $24 billion and employ up to 120,000 workers, the report said.

A secondary effect of plugging these wells will be a cut in methane emissions, the authors noted. The U.S. Environmental Protection Agency estimates that unplugged and abandoned wells in the U.S. emit, on average, 280,000 metric tons of methane per year, the carbon dioxide-equivalent of 2.1 million passenger cars, the report said.