Special Report: Millions
of abandoned oil wells are leaking methane, a climate menace
Nichola Groom
Reuters
Wed Jun 17, 2020 / 5:18
PM EDT
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(This June 16 story
corrects comparison in paragraph eight of climate damage from methane leaks
to that from U.S. oil consumption. The leaks cause climate damage roughly
equivalent to typical U.S. oil consumption in one day, not two days.)
mobile.reuters.com
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FILE PHOTO: Hanson Rowe,
a landowner who blames a leaky gas well on his property for health problems,
smells for the odor of gas emanating from an abandoned well on his property in
Salyersville, Kentucky, U.S., February 28, 2020.
Reuters/Bryan Woolston
FILE PHOTO: Hanson Rowe,
a landowner who blames a leaky gas well on his property for health problems,
tightens a valve on an abandoned gas well on his property in Salyersville,
Kentucky, U.S., February 28, 2020.
Reuters/Bryan Woolston
SALYERSVILLE, Kentucky
(Reuters) - (This June 16 story corrects comparison in paragraph eight of
climate damage from methane leaks to that from U.S. oil consumption. The leaks
cause climate damage roughly equivalent to typical U.S. oil consumption in one
day, not two days.)
In May 2012, Hanson and
Michael Rowe noticed an overpowering smell, like rotten eggs, seeping from an
abandoned gas well on their land in Kentucky. The fumes made the retired couple
feel nauseous, dizzy, and short of breath.
Regulators responding to
the leak couldn’t find an owner to fix it. J.D. Carty Resources LLC had drilled
the well near the Rowes’ home in 2006 - promising the family a 12.5% royalty
and free natural gas, which they never got. But Carty went bust in 2008 and
sold the site to a company that was later acquired by Blue Energy LLC. Lawyers
for both companies deny any responsibility for the leak.
A year later, Kentucky's
Division of Oil and Gas declared the well an environmental emergency and hired
Boots & Coots Inc - the Texas contractor that doused oil-well fires after
the Gulf War - to plug it. During the 40-day operation, the Rowes retreated to
a trailer on their property and lived with no running water to escape the gases
and noise. Regulators determined the leak was a toxic blend of hydrogen
sulfide, a common drilling byproduct, and the potent greenhouse gas methane.
"I wouldn't go
through this again for $1 million,” said Hanson Rowe, who with his wife is
suing the energy companies for compensation.
The incident, while
extreme, reflects a growing global problem: More than a century of oil and gas
drilling has left behind millions of abandoned wells, many of which are
leaching pollutants into the air and water. And drilling companies are likely
to abandon many more wells due to bankruptcies, as oil prices struggle to
recover from historic lows after the coronavirus pandemic crushed global fuel
demand, according to bankruptcy lawyers, industry analysts and state
regulators.
Leaks from abandoned wells
have long been recognized as an environmental problem, a health hazard and a
public nuisance. They have been linked to dozens of instances of groundwater
contamination by research commissioned by the Groundwater Protection Council,
whose members include state ground water agencies. Orphaned wells have been
blamed for a slew of public safety incidents over the years, including a
methane blowout at the construction site of a waterfront hotel in California
last year.
They also pose a serious
threat to the climate that researchers and world governments are only starting
to understand, according to a Reuters review of government data and interviews
with scientists, regulators, and United Nations officials. The
Intergovernmental Panel on Climate Change last year recommended that U.N.
member countries start tracking and publishing the amount of methane leaching
from their abandoned oil and gas wells after scientists started flagging it as
a global warming risk. So far, the United States and Canada are the only
nations to do so.
The U.S. figures are
sobering: More than 3.2 million abandoned oil and gas wells together emitted
281 kilotons of methane in 2018, according to the data, which was included in
the U.S. Environmental Protection Agency’s most recent report on April 14 to
the United Nations Framework Convention on Climate Change. That’s the
climate-damage equivalent of consuming about 16 million barrels of crude oil,
according to an EPA calculation, or about as much as the United States, the
world’s biggest oil consumer, uses in a typical day. (For a graphic on the rise
in abandoned oil wells, click tmsnrt.rs/2MsWInw )
The actual amount could
be as much as three times higher, the EPA says, because of incomplete data. The
agency believes most of the methane comes from the more than 2 million
abandoned wells it estimates were never properly plugged.
The problem is less
severe in Canada, where the bulk of oil production comes from oil sands mining
instead of traditional drilling. The government estimated that its 313,000
abandoned wells emitted 10.1 kt of methane in 2018, far less than in the United
States.
The global impact is
harder to measure. The governments of Russia, Saudi Arabia, and China – which
round out the top five world oil-and-gas producers – did not respond to
Reuters’ requests for comment on their abandoned wells and have not published
reports on the wells’ methane leakage.
Researchers say it’s
impossible to accurately estimate global emissions from leaky abandoned wells
without better data. But a rough Reuters calculation, based on the U.S. share
of global crude oil and natural gas production, would place the number of
abandoned wells around the world at more than 29 million, with emissions of 2.5
million tonnes of methane per year - the climate-damage equivalent of three
weeks of U.S. oil consumption.
HIDDEN MENACE
In a forested area of
western New York state in February, a group of state regulators, along with
researchers from the State University of New York at Binghamton, trudged
through the snow. They stopped at a rotting wooden structure encircling a
rusted pipe.
Department of
Environmental Conservation (DEC) official Charlie Dietrich held a bright orange
device over the heap. It emitted a high-pitched signal, and its screen showed a
code indicating the presence of ignitable gas. A scent of petroleum wafted
through the air.
“There’s some methane
coming up out of there,” DEC Mineral Resources Specialist Nathan Graber said.
The abandoned well lies
in the forests of Olean, New York, which was an oil boomtown at the turn of the
20th century. The site was one of 72 locations logged by geophysicists Tim de
Smet and Alex Nikulin in December, researchers from Binghamton, using a drone
equipped with a metal detector, part of a program launched in 2013 to help New
York identify and plug abandoned wells.
New York’s DEC has
records of 2,200 abandoned wells dating back to the late 1800s. But the state
believes the actual number could be much higher, because of incomplete records.
“It’s a lot easier to
find stuff when you know where to look,” Nikulin said.
The group is among an
array of regulators, activists and federal agencies now seeking out abandoned
wells from the U.S. Northeast to California. The heightened interest in the
climate threat posed by the wells started with a 2014 study by Princeton
graduate student Mary Kang, who was the first to measure methane emissions from
old drilling sites in Pennsylvania. She concluded in 2016 that abandoned wells
represent 5% to 8% of total human-caused methane emissions in the state.
“It's not like they leak
for one year, and then they stop,” said Kang, now a professor of civil
engineering at McGill University in Montreal. “Some of these have been there
maybe for 100 years. And they are going to be there for another 100 years.”
Although the Trump
administration has downplayed global warming and its link to fossil fuels, the
U.S. Energy Department has been financing efforts to improve data on emissions
from abandoned wells. Researchers from DOE’s National Energy Technology
Laboratory (NETL) recently took measurements from more than 200 wells in
Kentucky and Oklahoma and are planning field work in Texas. They plan to publish
their data by next spring.
NETL researcher Natalie
Pekney said the work was crucial to better understanding the climate impact of
abandoned wells. Many wells don’t leak much or at all, she said, while others
have “huge” methane emissions.
NETL had previously used
aerial surveys to locate old wells in Pennsylvania – home to the massive
Marcellus gas deposit – so drillers could avoid pushing fluids and gases up
through old abandoned well sites deep in the state’s forests. Its researchers
found many old wells contained bubbling fluids, an indicator of methane leaks.
GROWING PROBLEM
Nationwide, the number
of documented abandoned wells has jumped by more than 12% since 2008, around
the start of the hydraulic fracturing boom, according to the EPA estimates.
Many experts believe the
number will keep growing. Oil-and-gas firm bankruptcies in the United States
and Canada rose 50% to 42 in 2019, and analysts say the rate is likely to
accelerate as the pandemic-related slide in energy prices shakes out producers.
Research firm Rystad
Energy estimates that about 73 U.S. drilling companies could go bankrupt this
year, with an additional 170 succumbing in 2021, assuming an average oil price
of $30 a barrel.
“When prices are this
low, it becomes a very serious problem. It becomes a fight over who is going to
ultimately have to pay” for cleaning up abandoned wells, said John Penn, a
bankruptcy attorney with Perkins Coie LLP in Dallas. “It makes it really bad,
and it's going to get worse.”
A school district in
Beverly Hills, California, was saddled with a bill of at least $11 million to
plug 19 oil wells on the property of its high school, after a judge in 2017
absolved Venoco LLC - the bankrupt company that had been operating the wells -
of any responsibility for clean-up because other creditors took priority. The
city of Beverly Hills is contributing another $11 million to the job.
“This is an incredible
amount of money" siphoned away from education, said Michael Bregy,
superintendent of the Beverly Hills Unified School District.
State and federal
regulations normally require drillers to pay an up-front bond to cover future
cleanups if they go belly-up. But the rules are a patchwork, with wildly
differing requirements, and they seldom leave governments adequately funded. In
Pennsylvania, for example, it would take several thousand years to plug its
estimated backlog of 200,000 abandoned oil wells at the current rate of
spending, according to data from the state regulator.
Oil-industry lobbyists
have been fighting state and federal efforts to increase the bonding, arguing
it would hurt jobs and economic growth during an already tough time for the
industry.
“States and the federal
government have many sources of funding available to reclaim and plug abandoned
wells,” said Reid Porter, a spokesman for the American Petroleum Institute, the
country’s largest oil and gas trade group.
The API spent $1.44
million in the first quarter of 2020 lobbying on Capitol Hill, with oil well
bonding legislation one of the target issues, lobbying disclosures show.
The U.S. Government
Accountability Office estimates that cleaning up and plugging an abandoned well
runs from $20,000 to $145,000, putting the price tag for cleaning up all of
America’s abandoned wells somewhere between $60 billion to $435 billion.
'SHOOTING OUT OF THE
EARTH’
The pollution threat
goes beyond climate change. Leaks from abandoned wells have been found to
contaminate groundwater and soil. In extreme cases, gas from abandoned wells
has caused explosions.
In Ohio and Texas, state
regulators have each found an average of around two groundwater contamination
incidents per year related to orphaned wells, according to research by the
Groundwater Protection Council published in 2011 and dating to the 1980s.
In April 2017, for
example, neighbors of Ohio farmer Stan Brenneman alerted him to the smell of
oil coming from a drainage ditch on his 111-acre corn and soybean farm near the
town of Elida, Brenneman told Reuters. The ditch drains water from the farm and
carries it into rivers, streams and eventually Lake Erie.
Ohio’s Division of Oil
& Gas Resources Management excavated 800 feet of the farm’s drainage system
to find a well casing - about 130 years old - releasing oil three feet
underground. The plugging operation took two months to complete and cost the
state $196,915, according to a spokeswoman for the state Department of Natural
Resources.
More recently, in 2018,
the U.S. EPA was alerted to the presence of nearly 50 abandoned oil and gas
wells on Navajo Nation lands within the borders of Utah and New Mexico that
were bubbling water at the surface. Tests showed the way from some of the wells
contained potentially dangerous levels of arsenic, sulfate, benzene and
chloride.
The Navajo Nation
Environmental Protection Agency said plugging the wells would require “major
funds” and that, in the meantime, the public had been warned not to drink the
water.
In rare cases, gas from
long-abandoned wells can cause dangerous accidents.
In January of last year,
a 1930s-era well sent a geyser of gas and dirt 100 feet into the air at the
construction site of a Marriott seaside hotel in Marina del Rey, California, an
upscale community in the Los Angeles area, according to a state report. The
hotel owners did not respond to a request for comment.
“It was horrifying,”
said resident Marilyn Wall, who witnessed the explosion from her home across
the street. She said she was stunned “by the extent and the length of time that
the stuff was shooting out of the earth.”
A worker standing on a
construction platform above the plume was sprayed with debris and scrambled to
lower himself down with an escape rope, a video of the explosion shows.
DON’T DRINK THE WATER
For Hanson and Michael
Rowe, their troubles did not end the day their abandoned well was plugged. They
no longer drink from the water well on their property because it gives them
diarrhea, they said. Michael Rowe said she still suffers from headaches and
coughing spells.
Kentucky’s Energy and
Environment Cabinet is still fighting to recoup the $383,340 cost from the
now-defunct J.D. Carty and Blue Energy in an ongoing court battle.
An attorney for John
Carty, founder of J.D. Carty, said his client had sold what few assets remained
in the company and therefore bore no responsibility. A lawyer for Blue Energy
said the company denies ever operating the wells on the property and has no
responsibility to maintain or plug them.
J.D. Carty was only
required to have one $50,000 “blanket bond” to cover all its wells in Kentucky.
The amount forfeited to pay for the leaky well on Rowe’s land, determined in
part by its depth, was just $2,500 - less than 1% of the cost to fix it.
After the incident,
Kentucky lawmakers passed a bill last year that effectively doubled bond
requirements for shallow wells to help cope with the state’s 13,000 abandoned
wells. Still, state regulators say the list of wells is growing.
Hanson Rowe said he supports
fossil fuel development because using natural gas for heat and cooking has
improved his quality of life. But the couple say they hope their lawsuit
against the companies involved will help change the way the energy industry
manages its wells.
“You lost your health,
you’ve lost it all,” Hanson Rowe said.
(Reporting by Nichola
Groom; Additional reporting by Ekaterina Golubkova in Moscow, Rania El Gamal in
Riyadh; Editing by Richard Valdmanis and Brian Thevenot)
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