Filling the Hole: Decommissioning Liability for Shale and Non-shale wells of Appalachia

Plateauing Appalachian gas production underscores the need for transformational policy reform to ensure the oil and gas industry, rather than the public, pays for the growing cost of decommissioning the region’s hundreds of thousands of legacy oil and gas wells, according to “Filling the Hole,” a new, two-part report from the Ohio River Valley Institute.

As Appalachia’s first fracking wells reach retirement age, total liability for the region’s 19,300 unplugged shale wells and 265,000 unplugged non-shale wells has climbed to nearly $40 billion. Yet existing financial assurance available from oil and gas companies to plug spent wells totals just $115 million, representing 0.3% of current liability from non-shale wells alone, according to Part I of the report.

To date, policy and enforcement have failed to compel well owners to fulfill their plugging obligations. Part II of the report proposes a comprehensive policy solution to fund decommissioning of the region’s existing legacy well inventory and stem the proliferation of new orphaned wells without abating future drilling or disadvantaging smaller oil and gas companies.

Join co-authors co-authors Dwayne Purvis, Founder & Principal Advisor of Purvis Energy Advisors, and Senior Researcher Ted Boettner to learn more.

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