PA Environment Digest Blog: New Report: Shale Gas Industry Expected To Drill 8,400 More Wells In PA; 171 Shale Wells Abandoned So Far; Shale Well Plugging Expected To Cost Up To $8.5 Billion

On May 6, the Ohio River Valley Institute released a pair of reports on the growing cost of plugging shale gas and conventional oil and gas wells in the Appalachian Basin and who will pay those costs-- the well owners or taxpayers.

The best estimates available show Pennsylvania now only has 0.2% of the funds needed to plug shale gas and conventional wells to cover the estimated $20.1 billion cost of having taxpayers plug those wells, if their owners abandoned them.

Shale Gas Wells

The report estimates shale gas drillers can drill at least another 8,400 wells to develop gas from both proven and non-proven reserves in Pennsylvania-- an increase of nearly 58% over the 14,791 unconventional wells drilled so far in the state.

This estimate was developed using US Energy Information Agency estimates showing natural gas production is likely to peak in 2032 followed by a slow decline. Both the price of gas and improving technology could extend that date.

Since 2010, the Department of Environmental Protection has issued shale gas drillers in Pennsylvania 396 violations for abandoning 171 wells, according to the report.

After repeated citations, 47 have returned to production, and 66 have been plugged, the report said.

Last year showed the highest number of citations, the highest number of unique wells, and the highest number of shale companies cited by DEP.

[Note: Just three months into 2025, DEP has already issued 40 violations for abandoning shale gas wells to 10 shale gas drillers. Read more here.

[The shale gas companies include-- Anegada Energy LLC; Apex Energy (PA) LLC; Blackhill Energy LLC; Diversified Production LLC; Diversified Production LLC; EQT ARO LLC; EQT Chap LLC; EQT Production Co.; Rice Drilling B LLC; Roulette Oil & Gas LLC; and Taft Operating LLC.

[Leading the pack is Diversified Production, LLC which has been issued 31 violations for shale gas well abandonments by DEP. Read more here.

[The abandonments include a cryptocurrency mining facility and associated shale gas wells in Elk County. Read more here.

[Most of the shale gas wells receiving violations for abandonment were drilled in the beginning of shale gas operations in Pennsylvania-- from 2007 to 2012.]

“Whether by qualitative or quantitative analogy, the evidence shows that horizontal shale wells will join the warehouse of accumulated liability within the coming years while the current inventory of conventional wells is being plugged at a glacial pace.”

The estimated cost to plug existing and 8,400 future shale gas wells is between $3.5 billion and $8.5 billion, according to the report.

[Note: This number of new shale gas wells could also be very low if the President is successful in overturning the moratorium on fracking shale gas wells in the Delaware River Watershed. Read more here.]

Conventional Oil & Gas Wells

The report estimated there are estimated 134,000 unplugged conventional oil and gas wells in Pennsylvania and another 100,000 or more yet to be identified conventional wells yet to be discovered.

The report said 71,000 conventional wells have been plugged-- 499 between 2018 to 2023.

[Note: DEP has records of 202,919 conventional wells drilled in the state.]

A December 2022 compliance report by DEP found conventional oil and gas well owners routinely abandoned their wells as a business practice and well abandonment was the most frequent violation issued by DEP. Read more here.

Since 2023, DEP has issued 1,518 notices of violation to conventional oil and gas well owners for abandoning their wells, and the pace of these abandonments is also picking up.

In 2023, DEP issued 512 violations and in 2024, DEP issued 860 violations.

Just three months into 2025, DEP has already issued 146 violations for abandoning conventional oil and gas wells to 46 well drillers. Read more here.

A 2023 report by the Environmental Defense Fund found Pennsylvania has 55,000 conventional oil and gas wells at high risk for abandonment and another 51,000 wells are at risk of being transferred to low solvency owners who do not have the resources to plug them. Read more here.

Conventional wells drilled before April 1985 are not required to be covered by any well plugging bonds.

Laura Legere of the Pittsburgh Post-Gazette reported in 2021 DEP had less than $15 per well available to plug active conventional oil and gas wells in Pennsylvania. [Read more here]

Just plugging the 134,000 conventional wells will cost an estimated $16.1 billion and adding another 100,000 would cost at least another $12 billion, according to the new report.

Click Here to read Report I - The Problem.

A Solution

The plan begins with a small excise tax on production to fund a new, government- sponsored enterprise (not a government agency) that can take final and permanent responsibility for legacy and orphan wells, as well as existing and new wells if elected by active companies.

The same entity also serves as a clearinghouse for information on best practices and costs, as a reinvestment vehicle to assist the transition of the oil and gas industry, and as an enforcer of existing responsibilities through civil and bankruptcy law.

Meanwhile, active companies would be required to catch up with accumulated liabilities then to maintain a timely plugging program.

Companies that have operated and planned in good faith should not have a problem meeting the obligations, but those who have not would suffer the loss of the right to operate.

To assist with the transition, an amnesty program is proposed to mitigate the consequences of the catch-up policy.

They would maintain their employment temporarily but would transfer ownership and responsibility to the decommissioning entity.

For new wells, companies would be required to place the full cost of decommissioning in an escrow account which they would continue to own but which could be invested by the same independent panel as the excise tax, including investment back in oilfield communities, workers, and companies.

The report noted the cost per unit of production becomes small when the cost of decommissioning all of the wells is spread across the producing reserve base of 115 trillion cubic feet plus additional proved reserves of 71 trillion cubic feet of new drilling in the Appalachia Basin.

Depending on the scope of the costs intended to be covered by the fund (instead of being placed directly on the most appropriate operators), the cost could range from $0.05 to $0.21 per Mcf at today’s costs.

While the proposed solutions could be implemented at a state-by-state level, implementation at a regional or national level would be more efficient.

The proposed solutions do not impair existing energy supply or meaningfully curtail future drilling. The effect on energy prices would be very small.

By contrast, the US Energy Information Administration estimates that exporting natural gas will increase consumer prices by multiples of the impact of the resolution fee.

In the three Appalachian states studied, the proposal would directly increase oil and gas employment an estimated 32% over current levels, create over 19,000 new jobs in total, and would not suffer layoffs when commodity prices cycle down.

For more background on this concept, visit the True Transition website and read the proposed Abandoned Well Act.

Click Here to read Report 2 - The Solution for many more details.

Visit the Ohio River Valley Institute Filling The Hole webpage to learn more about the new orphan oil and gas well reports.

Click Here for a video of the announcement.

Ted Boettner, Senior Researcher, ORVI, presentation slides.

Dwayne Purvis, Purvis Energy Advisors, presentation slides.

PA Attempts To Increase Well Bonding

Since 1984, the Environmental Quality Board has had the authority to review the adequacy of oil and gas well plugging bonding amounts every two years, but has never exercised that authority.

In November of 2021, the EQB accepted separate rulemaking petitions for study from environmental groups proposing to increase bond amounts for both conventional oil and gas and unconventional shale gas wells. Read more here.

In July 2022, the General Assembly passed and Gov. Tom Wolf signed legislation into law taking away the EQB’s authority to review conventional oil and gas well bonding amounts for 10 years. Read more here.

It also modestly increased blanket bond amounts for an unlimited amount of wells. Wells drilled before April 1985 still were not required to be bonded.

The rulemaking petition to increase bonding for shale gas wells is still pending.

In August 2023, environmental groups filed a lawsuit in Commonwealth Court against the General Assembly and the Governor challenging the constitutionality of the law preventing the EQB from increasing bonding amounts for conventional oil and gas well owners. Read more here.

In October 2023, DEP tried to interest conventional oil and gas well owners in an alternative to bonding-- a “life insurance” concept for well plugging.

A private company-- One Nexus-- made a presentation to conventional well owners at a DCED PA Grade Crude [Oil] Development Advisory Council meeting suggesting an insurance model had more advantages than bonding to cover a well owner’s plugging obligations. Read more here.

The concept hasn’t gone anywhere.

NewsClip:

-- PA Capital-Star/Inside Climate News: Scientists Map Where Abandoned Conventional Oil & Gas Wells Pose Threats To Aquifers [Parts Of PA Look Like ‘Swiss Cheese’]

Resource Links:

-- PA Oil & Gas Weekly Compliance Dashboard - Dec. 21 to 31 - Record Number Conventional, Shale Gas Abandoned Well Violations In 2024; Gas Storage Area Well Leaks [PaEN]

-- DEP Report Finds: Conventional Oil & Gas Drillers Routinely Abandon Wells; Fail To Report How Millions Of Gallons Of Waste Is Disposed; And Non-Compliance Is An ‘Acceptable Norm’ [PaEN]

-- EDF: Pennsylvania Has 55,000 Oil/Gas Wells At High Risk Of Being Abandoned; 51,000 Wells At Risk Of Being Transferred To Low Solvency Owners; Current Conventional Well Owners Abandon 561 Wells A Year, On Average [PaEN]

-- House Hearing: Let’s Work Together To Make Conventional Oil & Gas Industry Practices Cleaner, Respect Property Rights, Protect Taxpayers And Prevent New Abandoned Wells [PaEN]

-- Conventional Oil & Gas Industry Still Fighting To Make Road Dumping Its Wastewater Legal; DEP Introduces Concepts Of A ‘Life Insurance Policy’ For Plugging Wells; Certified 3rd Party Inspectors [PaEN]

-- Lawsuit Filed Against General Assembly, Governor Challenges Constitutionality Of Law Preventing DEP From Protecting Public Health, Environment From Harm Caused By Abandoning Conventional Oil & Gas Wells [PaEN]

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - April 26 to May 2: Contaminated Livestock Water Supply; Ruptured Gathering Pipeline; Failure To Comply With Shale Gas Well Plugging Order [PaEN]