State regulators are rejecting a petition from environmentalists to increase a key cost for natural gas drillers.
It’s not because they think current costs are appropriate. Trying to raise them now is against the law.
At its July meeting, the Environmental Quality Board voted 18-0 – with one abstention – to dismiss a request from the Sierra Club and others to raise the bond amount for conventional wells.
Drillers are required to secure a bond for each well, so money is available to plug the well at the end of its useful life.
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Last year, the Republican-controlled legislature passed a law freezing bond amounts for conventional wells at $2,500 each for the next decade. Companies essentially get a discounted rate the more wells they have, making the cost per well much lower.
The Department of Environmental Protection has said the average cost to plug one well is about $30,000.
In its recommendation on the petition, DEP said, “While the Department agrees the current bonding requirements for conventional oil and gas wells are insufficient, the EQB no longer has the statutory authority to take the action requested by the Petitioners. As a result, the Petition for Rulemaking must be denied.”
Ankit Jain, an associate attorney with the Sierra Club, said raising bonds shouldn’t be so political.
“People can argue about the merits of drilling and job creation and things like that, but the fact is that nobody wants abandoned wells in their community; and plugging abandoned wells actually creates jobs, it doesn’t take them away,” Jain said.
Abandoned wells leak the potent greenhouse gas methane, which contributes to climate change, and threatens peoples’ health and safety.
A DEP report released late last year said inspectors found more than 3,000 newly-abandoned wells over a recent 5-year period.
The report said failure to report required information about wells and drilling to the agency is so common among conventional operators that it seems to be an industry-wide rule rather than the exception.
Jain said the legislature could reverse course on bonding, now that the House is controlled by Democrats. A bill from Rep. Greg Vitali (D-Delaware) that would restore the EQB’s authority to raise conventional bond amounts passed out of committee in May and is awaiting a vote from the full House.
The House and Senate are in summer recess and are scheduled to return in September.
Jain said, while he believes bonding is the best option, DEP could look at other measures to make sure there is enough money to plug abandoned wells, such as increased permit fees or setting new rules for transfers of wells to a new company.
The Sierra Club is also petitioning for higher bonds on unconventional, fracked wells. That measure is still before the EQB.
