Orphaned and abandoned wells in the United States

Orphaned and abandoned wells can cause environmental damage by leaking pollutants into the atmosphere or water supplies.[5] Important determinants of how much orphaned and abandoned wells impact the environment include the techniques used and precautions taken when first drilling the well, whether it is a gas well, oil well, or combined oil and gas well, and if and how the well was sealed.[5]

If wells are not properly sealed when orphaned or abandoned, there can allow oil and gas to contaminate groundwater. It is also possible for orphaned and abandoned wells to be significant emitters of methane into the atmosphere.[6] Furthermore, brine present in wells dug into shale formations can contain some radioactive and toxic substances that contaminate groundwater if the well leaks.[1] Plugging wells can reduce the risk of explosions and protect groundwater, but does not always prevent methane emissions.[6] The costs to mitigate the impact of orphaned and abandoned wells varies, but may include removing all equipment from the site, restoring the land and topsoil, and planting local species, in addition to plugging the well itself.[1] For example, plugging a well and restoring the surrounding land costs an average of $100,000 for wells in the Marcellus Shale.[1]

One problem with studying the impacts of orphaned and abandoned wells is that data about them can be scarce and incomplete. In the United States, it is possible for wells to have been orphaned or abandoned for over a century, and information about them, if it exists at all, can be difficult to find.[6]

One way to encourage well owners not to abandon or orphan wells and to make sure wells are safely abandoned is to use well bonds. These are bonds paid by well operators to a surety company and are held by an obligee (state or federal entity) until the well has been satisfactorily plugged and the land surface restored. A significant challenge of making well bonds an effective policy tool is to set their price to a point that does not make market entry prohibitively expensive, but also does not incentivize well operators to forfeit the bond instead of undertaking the abandonment requirements specified in local law.[1]

Another way to encourage well owners not to abandon or orphan wells is to retrofit oil and gas wells to produce geothermal energy.[7] One benefit of this approach is that it is less expensive to retrofit an abandoned well to produce geothermal energy than it is to drill a new oil or gas well.[7] It also saves the cost of exploring sites for geothermal fields.[8] Avoiding new exploration and drilling avoids the environmental impacts of these activities.[8] However, geothermal fluids can contain environmentally hazardous chemicals such as hydrogen sulfide, ammonia, methane, arsenic, mercury, and lead.[8]

A third option is to mandate that well operators establish reclamation trusts which would be used to pay reclamation costs if the operator does not perform the necessary plugging and land restoration within a given time period after abandoning the well.[1] This policy option has been used to mitigate the environmental impact of mines in the United States as part of a combined command-and-control and market incentive policy response to environmental protection.[9] One risk attached to this policy option is that if wells become economically unproductive before the period planned for in the trust agreement, the abandoned well could become a liability held by the relevant government authority.[1]