Across West Virginia, tens of thousands of old oil and natural gas wells dot the hills and valleys, unplugged and abandoned by their owners. Despite no longer producing oil or gas, they can be hazardous for both humans and the environment, contaminating groundwater and emitting significant amounts of methane.
Lawmakers know how to fix this problem: every year for the last six years, they’ve introduced a bill to keep operators from abandoning their wells and leaving them unplugged. But while legislators have introduced the measures, they’ve never put the bill on a committee agenda. Yet this year they’re moving another measure through the House: a bill to make the problem worse and bail out the nation’s largest well owner.
West Virginia has at least 18,000 unplugged wells scattered across the state. For some, the owner is known, and liable for clean-up. But for more than 6,000 wells, the responsibility to clean up these polluting sites has been left up to state regulators — a massive undertaking and one that is likely to get worse.
The bill that would put more accountability on operators to plug their wells hasn’t made it on to a committee agenda yet, but delegates are advancing another measure that would exempt companies that have an agreement with the state from the state law that requires them to “promptly” plug their wells.
The state Department of Environmental Protection currently has at least three of these negotiated settlements, known as consent orders, relating to the plugging of abandoned wells, according to the agency’s general counsel Jason Wandling. Diversified Energy Company, the largest gas and oil well owner in the country is among the companies with an agreement with the state; the Alabama-headquartered company has about 2,200 abandoned wells in West Virginia.
While under current law, the company would be required to plug all its abandoned wells, HB 5076 would exempt Diversified since it has an existing order issued by state regulators, further delaying cleanup. The bill would also protect companies from lawsuits for failing to plug their abandoned wells, limiting surface owners’ legal recourse against operators.
Lawmakers are pushing this bill as a federal lawsuit filed by surface owners continues against Diversified, its affiliates and natural gas producer EQT Corporation, alleging that the companies’ failure to “promptly plug” abandoned wells has negatively impacted them. The companies moved to dismiss the complaint, arguing their agreement with the DEP supersedes West Virginia’s well-plugging regulations and protects them from lawsuits, but the judge disagreed.
But the bill, advanced by the House Energy and Manufacturing Committee late last week could change that, as it could legally shield Diversified and other companies in similar situations. While it’s unknown whether the legislation — if passed — would affect the current lawsuit against Diversified, it’s “very clear that it would affect future lawsuits by surface owners,” said David McMahon, the co-founder of the West Virginia Surface Owners’ Rights Organization.
Del. Bill Anderson, R-Wood — the lead sponsor of the bill — said that it is an effort to ensure “an orderly process” regarding the plugging of wells and to clarify that they expect individuals who want a well plugged to go through “the administrative process with the DEP” instead of through the courts.
“Basically it was an effort to say let the DEP manage this as they are charged with doing and not have judges somewhere jumping in the middle of it,” said Anderson, the chair of the House Energy and Manufacturing Committee. “You got to have somebody managing without people throwing in things from the outside.”
But others see the bill differently as it comes amid Diversified’s legal troubles.
“I think that this bill has been proposed because that lawsuit is showing promise of succeeding so they’re changing state code,” said Del. Evan Hansen, D-Monongalia. “If you can’t win in court, change the law.”
In an emailed statement, a spokesperson for Diversified Energy said the company is focused on environmental sustainability.
“Diversified Energy is a responsible steward of existing natural gas assets, as we acquire wells, invest in them to improve production and environmental performance, and permanently retire at the end of life,” he wrote. “Asset retirement is part of our stewardship model.”
But while that bill has already cleared one committee, two others that address the industry’s growing environmental liability haven’t moved.
West Virginians are already facing a multibillion dollar liability for cleaning up old coal mines, and natural gas wells represent hundreds of million dollars more in cleanup.
When operators don’t plug their wells and go out of business, a well can become “orphaned”, and the cost of cleanup falls to the state — and taxpayers. While the DEP estimates about 6,500 orphaned wells, it doesn’t account for the tens of thousands of undocumented ones the West Virginia Geological Survey estimates are scattered throughout the state, or the thousands of abandoned wells that are likely to become orphaned in the future. A recent influx of federal money is only enough to plug a fraction of them.
Despite having introduced bills in both chambers to prevent state regulators from having to bear the brunt of cleaning up even more wells, lawmakers continue to sit on the measures.
Both SB 532 and HB 5414 would prevent wells from becoming orphaned by ensuring proper funding to plug wells once they no longer produce oil or gas.
The bills, dubbed the Orphan Oil and Gas Well Prevention Act, would replace the current bonding system and instead require operators to set aside money to cover the full cost of plugging their wells in advance.
The legislation would prevent “new orphan wells and ensure that companies pay and they’re not shifting that burden on the taxpayers,” said Ted Boettner, a senior researcher at the Ohio River Valley Institute.
However, this is not the first time these bills have been introduced. A version of the legislation has been introduced in both chambers every year since 2019 but has never been considered by a committee or advanced to the floor for a vote.
It would seem the Senate’s version might make one committee agenda: Sen. Randy Smith, R-Tucker, has been the bill’s lead sponsor every year, and as the chair of the Senate Energy, Industry and Mining Committee has control over what bills his committee considers. But he’s never put it on the committee’s agenda.
This year, Smith would only say there’s a “pretty good chance” he would run the bill, saying he was working to find a version of the bill gas companies can agree on.
“I don’t know if it’ll go any further than that, but I’m big on plugging wells because we have so many of them in the state,” said Smith, who works in the coal industry. “You stop the bleeding before you try to fix the wound.”
And in the House, Anderson — who said he’s a big proponent of plugging wells — would only say that he’s “looking at it but won’t guarantee it’ll go this year.”
Disclosure: The law firm of Bailey and Glasser represents landowners in their lawsuit against Diversified Energy Company. One of the firm’s founders, Ben Bailey, is chairman of Mountain State Spotlight’s Board of Directors, but he is not personally involved in the case. The law firm’s other co-founder, Brian Glasser, is among the counsel of record and has donated to Mountain State Spotlight.
Correction: This story has been updated to include a statement provided by Diversified Energy.