There is a fight in Harrisburg about how much conventional well operators should pay for well bonding. In 2021 the Sierra Club, and other environmental extremist groups, filed a petition asking PA to raise conventional well bonds from $2,500 per well to $38,000 per well. Sierra Club et al Conventional Wells Bonding Increase Filing to EQB.pdf In its Petition the Sierra Club asserts that higher bonding will prevent operators from abandoning wells, and at page 7 of its Petition the Sierra Club throws out the frightening number of 560,000 unplugged wells. (DEP says the more accurate number is about 200,000.)
But does increased bonding prevent abandoned wells? 3 truths the Sierra Club conveniently ignores:
1. 93% of the wells on PA DEP’s abandoned list were drilled before well bonding was required! In other words, raising the well bond will have no impact on 93% of the problem wells. Why? Most of PA’s problem wells were abandoned 50, 100 or more years ago. The problem is not an epidemic of PA’s current conventional operators walking away from wells. The problem wells are from a time when PA law did not require any plugging!!!
2. DEP doesn’t make use of the bonds it already has. In the last five years the DEP has seized bonds from only two operators. In other words, the DEP uses the “cure” of a bond seizure, on average, less than once every two years. If bonding was an effective cure we would see bond seizures being used much more often.
3. DEP already has other stiff remedies. Over the last 5 years DEP collected civil penalties 20 times greater than what DEP collected in the two bond seizures. In addition to civil penalties DEP can impose a lien on all or any of the real and personal property of an operator who abandons a well and DEP can seek criminal penalties of up to one year imprisonment and a daily fine of $5,000.
The Sierra Club doesn’t tell you about the hardships of bonds. Bonding devastates the cash flow of a business. Every dollar that goes into a bond is a dollar that cannot go to the purchase of a piece of equipment or the wage of an employee. Under current law, an operator with ten wells must already post cash or a certificate of deposit in the amount of $25,000. If HB 962 becomes law, and PA sets bonding at the $38,000 amount requested by the Sierra Club, that same operator would have to come up with $380,000 to post bond, or be forced out of business.
Finally, the Sierra Club doesn’t tell you that most environmental extremists oppose bonding for windmills and solar facilities, even though solar facilities contain toxic materials and wind turbine blades are too large to go to most landfills. Yet solar and wind facilities have a much shorter life span (about 20 years) than conventional oil and gas wells. See the chart on our “Oil” or “Natural Gas” pages: OIL | Energy Blog (energy4life.today) None of us can enjoy life as we know it today without precious oil and natural gas—we all relied upon oil and gas to have breakfast and to get to work today. The Sierra Club wishes for the extinction of PA’s conventional oil and gas business. Be careful what you wish for.
Photos of PA’s Abandoned Wells:
Typical Abandoned Well drilled in WW I era and not produced for decades
Abandoned Well (mere hole in the ground) recently discovered
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