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Management of Abandoned and Orphaned Oil and Gas Wells

Download the factsheet, Benefits to Safely Managing Orphaned Oil and Gas Wells (PDF) to learn more.

When an oil or gas well is no longer in use, it must be properly closed and sealed to prevent impacts to water and air quality. Orphaned or improperly closed wells can pose a risk to the environment and the health of neighboring communities and contribute to climate change.

Increased volatility in the oil and gas industry threatens to lead to a surge of unplugged wells without legal owners, leaving states responsible for closing wells and cleaning up sites to prevent hazardous pollution. State regulators, state and federal land managers, and tribal or indigenous authorities may be burdened with a growing number of orphaned wells. Estimates of the cost to states to plug high-priority orphaned wells range from hundreds of millions to billions of dollars.

Orphaned, improperly closed wells can emit large volumes of oil, other fluids, or natural gas, including methane, a potent greenhouse gas. Emissions from wells pose a risk to the health of neighboring communities by contaminating groundwater and releasing toxic air pollutants such as naturally occurring radioactive materials, metals, and other volatile organic compounds such as benzene. Oil, natural gas and fluids can migrate from neighboring operational wells to the surface. Gas leaks from old wells have caused explosions in homes and the evacuation of schools.

An “orphaned” well is generally considered to be any oil or gas well without a legally responsible party to conduct proper plugging and site restoration. These include modern wells associated with company bankruptcies and legacy wells abandoned prior to contemporary regulatory standards for plugging and for which there is no current responsible party. Orphaned wells can be found on federal, state, private, and/or tribal land in every oil and gas producing state in the United States.

When energy prices fall and production slows, more companies shut in wells and may sell those wells to companies unable to meet the financial obligations to properly operate or plug them. There are rarely adequate regulatory mechanisms or financial incentives for companies to properly plug wells and restore well sites. Financial assurance levels required of companies by regulators are often well below the cost to plug wells, which can range from several thousand to hundreds of thousands of dollars per well.

Locating, monitoring, and plugging orphaned wells and restoring well sites can avert costly impacts and reduce risks to the environment and human health.

The number and exact location of many orphaned wells remains unknown. States use slightly different definitions for orphaned wells, which can further complicate estimates of the scale of the problem. As of 2018, the Interstate Oil and Gas Compact Commission (IOGCC) reported 56,600 documented orphaned wells, and 194,400 approved idle wells out of a total of 1.6 million unplugged wells throughout the United States. As of 2018, the states had already plugged over 63,000 orphaned wells. Estimates of undocumented orphaned wells range into the hundreds of thousands.

Efforts to identify and track well sites and establish monitoring systems can help assess risks and prioritize the cleanup and plugging of wells that pose the greatest danger to health and the environment. Plugging orphaned wells and restoring well sites can create future investment opportunities and provide employment for oil and gas workers while protecting the health of neighboring communities.

Additional Resources

Orphan Well Association: FAQs

Interstate Oil and Gas Compact Commission: Report on Idle and Orphan Oil Wells

Government Accountability Office: BLM Needs a Comprehensive Strategy to Better
Manage Potential Oil and Gas Well Liability (2011)

Government Accountability Office: Bureau of Land Management Needs to Improve Its Data and Oversight of Its Potential Liabilities (2018)

California Council on Science & Technology: Orphan Wells in California

 

Last updated April 12, 2021

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