The Trump administration wants to reverse a Biden-era rule that raised the amount drilling companies are on the hook for to make sure a well is cleaned up, resetting it to the rates they’ve paid since 1960 or earlier.
Officials with the Interior Department claim it will modernize oil and gas drilling policy while lowering energy costs and expanding U.S. energy production.
In a statement, the Arizona Department of Environmental Quality said there are around 200 potential abandoned wells in the state. Because oil drilling dates back to the early 1900s before the state had regulations or standardized records, it says there is always the possibility that there are more. This is why ADEQ encourages community members to report potential orphaned wells.
The agency says remaining oil and gas from orphaned wells can contaminate nearby land and groundwater supplies. Unplugged or improperly plugged wells also release methane gas into the atmosphere, contributing to increased levels of greenhouse gas emissions.
The National Wildlife Federation, which opposes the Trump administration’s proposal, has identified a variety of threats that idled oil and gas wells pose to the environment, recreation and communities.
Aaron Kindle with the federation says drilling companies paid the same cleanup fees to the federal government for more than 50 years until the Biden administration passed new rules.
“The bonding requirements for an individual lease went up to $150,000, and for a statewide lease it went up to $500,000,” Kindle said. “That was a response to the original bonding fees that were decided in 1951 and 1960, respectively. So they hadn’t been updated since then.”
“What the rule is proposing now is to put them back to those rates. And if you look at just inflation, $25,000 in 1960 is about $320,000 now, and $10,000 in 1951 is about $120,000 now," he said.
Kindle says the bonding requirement is insurance for communities and the government against abandonment because it is meant to provide adequate funds up front to cover the costs of clean up. By lowering these rates, Kindle says this will create less incentive to be a good well steward.
He says the Bureau of Land Management estimates an average cost of $71,000 to plug an individual well, “and there’s about 16,000 abandoned wells out there on public lands right now. So that’s over a billion dollars that the public is on the hook for,” Kindle said.
ADEQ says it received a $25 million federal grant in 2022 to address orphaned wells. Under the program, 85 of the 200 identified abandoned wells could not be plugged, were still active, or were converted to water wells. That left around 115 remaining and eligible wells, of which 54 were plugged.
The agency says oil and gas well depths in Arizona range from 100 to 8,000 feet and the average estimated cost to properly plug one is about $160,000.
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