Special Report: Millions of abandoned oil wells are leaking methane, a climate menace
By Nichola Groom
SALYERSVILLE, Kentucky (Reuters) - In May 2012, Hanson and Michael Rowe noticed an overwhelming smell like rotten eggs that oozed from an abandoned gas well on their Kentucky land. The fumes made the couple feel nauseous, dizzy and short of breath when they retired.
The regulators who responded to the leak could not find an owner to fix it. J.D. Carty Resources LLC drilled the well near Rowes' home in 2006 and promised the family a 12.5% royalty and free natural gas they never got. But Carty went bankrupt in 2008 and sold the website to a company that was later taken over by Blue Energy LLC. The lawyers of both companies decline any responsibility for the leak.
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A year later, Kentucky's Oil and Gas Department declared the well an environmental emergency and instructed Boots & Coots Inc - the Texas contractor who extinguished oil well fires after the Gulf War - to plug. During the 40 days of operation, the Rowes retired to a caravan on their property and lived without running water to escape the gases and noise. Regulators found that the leak was a toxic mix of hydrogen sulfide, a common drilling by-product, and the powerful greenhouse gas methane.
"I wouldn't go through that again for $ 1 million," said Hanson Rowe, who is suing energy companies for compensation with his wife.
While the incident is extreme, it reflects a growing global problem: more than a century of oil and gas drilling has left millions of abandoned wells, many of which leach into the air and water. And drilling companies are likely to leave many more wells due to bankruptcy, as oil prices are finding it difficult to recover from historic lows after the coronavirus pandemic, according to insolvency attorneys, industry analysts, and government regulators.
Leaks from abandoned wells have long been recognized as an environmental problem, health risk and public nuisance. They have been linked to dozens of cases of groundwater pollution through surveys commissioned by the Groundwater Protection Council, which include state groundwater authorities. Orphaned wells have been blamed for a number of public security incidents over the years, including a methane outbreak at the construction site of a waterfront hotel in California last year.
They also pose a serious climate threat that researchers and world governments are only beginning 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 United States member countries track and publish the amount of methane leached from their abandoned oil and gas sources after scientists began to identify them as a risk of global warming mark. So far, the United States and Canada are the only nations to do so.
The U.S. numbers are sobering: more than 3.2 million abandoned oil and gas wells emitted 281 kilotons of methane in 2018. This emerges from the data contained in the latest April 14 report by the United States Environmental Protection Agency on the United Nations Framework Convention on Climate Change. This corresponds to climate damage which, according to an EPA calculation, corresponds to the combustion of 16.2 million barrels of crude oil. That's more than the United States, the world's largest oil consumer, consumes in two days. (A graphic of the rise in abandoned oil wells can be found at https://graphics.reuters.com/USA-DRILLING/WELLS/gjnpwylaapw/USA-DRILLING.jpg.)
The actual amount could be up to three times higher due to incomplete data, according to the EPA. The agency believes that most of the methane comes from the more than 2 million abandoned holes that are estimated to have never been properly plugged.
The problem is less severe in Canada, where most of the oil production comes from oil sands mining instead of traditional drilling. The government estimated that its 313,000 abandoned holes bore 10.1 kt of methane in 2018, far less than in the U.S.
The global impact is more difficult to measure. The governments of Russia, Saudi Arabia, and China, which round out the five largest oil and gas producers in the world, have not responded to Reuters' requests for comments on their abandoned wells and have not released reports of the well's methane leakage.
Researchers say it is impossible to accurately estimate global emissions from leaking abandoned wells without better data. A rough Reuters calculation based on the United States' share of global oil and gas exploration would bring the number of wells shut down around the world to over 29 million with emissions of 2.5 million tons of methane per year - that Climate - Damage equivalent of three weeks of US oil consumption.
In February, a group of state regulators, along with researchers from the State University of New York at Binghamton, trudged through the snow in a wooded area in western New York State. They stopped at a rotting wooden structure that surrounded a rusted pipe.
Charlie Dietrich, an official at the Department of Environmental Conservation (DEC), was holding up a bright orange device. There was a high signal and a code was displayed on the screen indicating the presence of flammable gas. A smell of petroleum blew through the air.
"Some methane comes out," said DEC Mineral Resources Specialist Nathan Graber.
The abandoned fountain is in the woods of Olean, New York, which was an oil boomtown at the turn of the 20th century. The site was one of 72 sites that were logged in December by geophysicists Tim de Smet and Alex Nikulin, researchers from Binghamton, using a drone equipped with a metal detector. This was part of a program launched in 2013 to help New York identify and plug abandoned holes.
New York's DEC has records of 2,200 abandoned fountains from the late 19th century. However, the state believes that the actual number could be much higher due to incomplete records.
"Finding things is much easier if you know where to look," said Nikulin.
The group belongs to a number of regulators, activists and federal agencies who are now looking for abandoned wells from the northeastern United States to California. Increased interest in the borehole climate threat began with a 2014 study by Princeton graduate student Mary Kang that was the first to measure methane emissions from old Pennsylvania wells. In 2016, it concluded that abandoned wells represent 5% to 8% of total man-made methane emissions in the state.
"It's not like they expire for a year and then stop," said Kang, now a professor of civil engineering at McGill University in Montreal. “Some of them may have been there for 100 years. And they will be there for another 100 years. "
Although the Trump administration has downplayed global warming and its link to fossil fuels, the U.S. Department of Energy has funded efforts to improve data on emissions from decommissioned wells. Researchers at the DOE's National Energy Technology Laboratory (NETL) recently completed measurements on more than 200 holes in Kentucky and Oklahoma and are planning fieldwork in Texas. They plan to release their data by next spring.
NETL researcher Natalie Pekney said the work is crucial to better understand the climate impact of abandoned wells. Many wells do not leak much or not at all, while others have "enormous" methane emissions.
NETL had previously used aerial photography to locate old wells in Pennsylvania - home of the massive Marcellus gas deposit - so drillers could avoid pushing liquids and gases up through abandoned well sites deep in the state's forests. The researchers found that many old wells contained bubbling liquids, an indicator of methane leaks.
Nationwide, according to EPA estimates, the number of documented shutdown holes has increased by more than 12% since 2008, for example at the beginning of the hydraulic fracturing boom.
Many experts believe that the number will continue to grow. Bankruptcies of oil and gas companies in the U.S. and Canada rose 50% to 42 in 2019, and analysts say the rate is likely to accelerate as the pandemic fall in energy prices shakes producers.
Research firm Rystad Energy estimates that around 73 U.S. drilling companies could go bankrupt this year. Another 170 will succumb in 2021 if an average oil price of $ 30 a barrel is assumed.
“When prices are so low, it becomes a very serious problem. It becomes an argument about who will ultimately have to pay, ”said John Penn, a bankruptcy attorney at Perkins Coie LLP in Dallas, for cleaning abandoned wells. "It makes it really bad and it will get worse."
A school district in Beverly Hills, California was charged at least $ 11 million to close 19 oil wells on its high school property after a judge in 2017 Venoco LLC - the bankrupt company that operated the wells - acquitted - all responsibility for the restructuring, since other creditors had priority. The city of Beverly Hills has made another $ 11 million available.
"It's an incredible amount of money," said Michael Bregy, superintendent of the Beverly Hills Unified School District.
Under state and state regulations, drills typically have to make an upfront payment to cover future cleanups when they get on their knees. But the rules are patchwork with very different requirements, and they rarely leave governments adequately funded. In Pennsylvania, for example, the state regulator said it would take several thousand years for the estimated backlog of 200,000 decommissioned oil wells to be filled with the current spending rate.
Oil industry lobbyists have fought governmental and federal efforts to increase loyalty, arguing that this would hurt jobs and economic growth in an already difficult time for the industry.
"The states and the federal government have numerous sources of funding to recover and clog abandoned wells," said Reid Porter, a spokesman for the American Petroleum Institute, the country's largest oil and gas trading group.
The API spent $ 1.44 million on lobbying on Capitol Hill in the first quarter of 2020, with oil well binding legislation being a major problem, as lobbying data shows.
The US Government Accountability Office estimates that the cleaning and plugging of an abandoned well is between $ 20,000 and $ 145,000. The cost of cleaning all abandoned wells in America is between $ 60 and $ 435 billion.
"SHOOTING FROM THE EARTH"
The risk of pollution 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 found an average of two groundwater pollution incidents per year in connection with orphaned wells, according to 2011 groundwater council surveys dating back to the 1980s.
For example, in April 2017, Ohio farmer Stan Brenneman’s neighbors made him aware of the smell of oil from a drainage ditch on his 111-acre corn soy farm near the city of Elida, Brenneman told Reuters. The trench drains water from the farm and leads it into rivers, streams and finally into Lake Erie.
The Ohio Oil and Gas Resource Management Department unearthed 800 feet of the farm's drainage system to find a well casing that is approximately 130 years old and releases oil three feet underground. According to a spokeswoman for the State Department of Natural Resources, the plugging process took two months to complete and cost the state $ 196,915.
More recently, in 2018, the U.S. EPA was alerted to the presence of nearly 50 abandoned oil and gas wells in areas of the Navajo Nation within the Utah and New Mexico borders where surface water was bubbling. Tests showed that some of the wells contained potentially dangerous amounts of arsenic, sulfate, benzene and chloride.
The Navajo Nation Environmental Protection Agency said that closing the wells would require "large resources" and that the public had been warned not to drink the water in the meantime.
In rare cases, gas from wells that have long been abandoned can cause dangerous accidents.
In January last year, a 1930s well at a construction site of a seaside Marriott hotel in Marina del Rey, California, an upscale community in the Los Angeles area, sent a gas and dirt geyser 100 feet into the air a health report . The hotel owners did not respond to a request for comment.
"It was terrible," said resident Marilyn Wall, who witnessed the explosion from her house across the street. She said she was stunned "by the extent and length of time that the stuff shot out of the earth".
A worker standing on a construction platform above the cloud was sprayed with debris and pulled down with an escape rope, as a video of the explosion shows.
DO NOT DRINK THE WATER
For Hanson and Michael Rowe, their problems didn't end on the day their abandoned well was clogged. They no longer drink well from the water on their property because it gives them diarrhea, they said. Michael Rowe said she still has headaches and coughing fits.
The Kentucky Energy and Environment Cabinet is still struggling to recover the $ 383,340 cost from the now-defunct J.D. Bringing Carty and Blue Energy back in an ongoing lawsuit.
A lawyer by John Carty, the founder of J.D. Carty said his client had sold the few assets remaining in the company and was therefore not responsible. A lawyer at Blue Energy said the company denies that it has ever operated the wells on the property and is not responsible for maintaining or closing them.
J.D. Carty only needed to have a $ 50,000 blanket bond to cover all of his Kentucky holes. The amount withheld to pay for the leaky well on Rowes Land, which was partially determined by its depth, was only $ 2,500 - less than 1% of the cost of the repair.
After the incident, Kentucky lawmakers passed a law last year that effectively doubled the requirements for shallow well bonds to 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 heating and cooking has improved his quality of life. However, the couple hopes that their lawsuit against the companies involved will help change the way the energy industry manages their wells.
"You lost your health, you lost everything," said Hanson Rowe.
(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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