Without regulation changes that would require full-cost bonding to cover the costs of plugging conventional and unconventional shale gas and oil wells in Pennsylvania, taxpayers will continue ‘getting fracked’ big time!
BOTTOM LINE: The bonding requirements for oil and gas producers in Pennsylvania are pitifully inadequate — only 7% of what they should be for conventional wells and only 12% of what they should be for unconventional wells — which continues to leave taxpayers on the hook for growing costs!
Photo: Old oil and gas well getting plugged near Hickory, Pa. after the hydraulic fracturing of a new Marcellus well ‘communicated’ with the 1902 well. A local farmer said foam was rising from the soil all over his nearby field.
CONVENTIONAL WELLS $2,500 increased to $38,000 The current bond amount for conventional wells is $2,500 per conventional well, with the option to post a $25,000 blanket bond, which does not come close to full-cost bonding (These are the same amounts enacted in the 1984 Oil and Gas Act). The petition asks for conventional well bonds to be increased to $38,000 per well. DEP’s average conventional well plugging costs for an abandoned well are $33,000. (Source) Click Here for a copy of the conventional well petition.
Photo: You really have to wonder how many of these 1890-era oil wells in the city of Washington, Pa. were properly plugged.
UNCONVENTIONAL WELLS (Marcellus and Utica Shale) $10,000 increased to $83,000 The current bond amount for unconventional wells is $10,000 adopted in 2012, with a blanket bonding system that greatly lowers the actual per-well amount, which also does not come close to full-cost bonding. The petition asks for unconventional well bonds to be increased to $83,000 per well. (Source) Click Here for the unconventional (shale) well petition.
Image: Permitting document for a new well near Cecil, Pa. – The scope and scale of newer Marcellus shale wells far exceeds the old vertical, conventional, oil and gas wells, with some laterals reaching out nearly 4 miles.
“Both the 1984 Act and Act 13 of 2012 have language authorizing the EQB to change the bonding amount. If the Board accepts the petition for study, DEP is required to report back to the Board within 60 days with its further recommendations for action on the issues raised by the petition.” (Source)
It’s way past time to correct this glaring travesty for Pennsylvania taxpayers! Bob