By LAURA LEGERE and ANYA LITVAK, Pittsburgh Post-Gazette

PITTSBURGH (AP) – State environmental regulators have spent years sounding the alarm bells about the scourge of abandoned oil and gas wells littering the Pennsylvania landscape. The biggest hurdle was getting the funds to find and plug them in before they fell into unmanageable decay.

With the new federal infrastructure law, Pennsylvania will have more money for plugging wells than the state has ever seen. The next challenge is how to spend it.

The state’s Department of Environmental Protection estimates that Pennsylvania could be eligible for up to $ 395 million to find and plug abandoned wells over the next decade – that’s 10 times more money than the state has spent on plugging orphaned wells over the past 30 years. .

According to the agency’s projections, that much money could close up to 16,000 open wells without an owner that pose risks to the environment and public safety.

The operating budget for the DEP plugging program has never exceeded $ 3.5 million in one year. In the peak year of this funding increase, its annual hookup budget could reach nearly $ 80 million.

Kurt Klapkowski, office manager in DEP’s oil and gas office, called it “one-size-fits-all funding.”

“I’ve probably had five or six times in my career where I really felt I had made a huge difference, and I’ve been doing so since 1994,” he told the Petroleum and Petroleum Technical Advisory Board. state gas in September. “I think it will definitely be another one of those situations where we leave Pennsylvania better than we found it.”

But scaling up a hook-up program that has languished for lack of funds will lead to further complications – from administering a much larger initiative to finding workers ready for the jobs.

The law contains several types of grants that will be administered by the US Department of the Interior and distributed to states. Time is already running out for some of them.

Pennsylvania is expected to receive an initial grant of $ 25 million that requires states to apply for the money within the next six months and spend it within one year of obtaining the funds.

“Remember, we spent $ 40 million over 30 years. We’re talking about $ 25 million in 365 days, ”said Seth Pelepko, environmental program manager at the office of oil and gas, in a presentation earlier this month for Washington & Jefferson College.

The DEP has been preparing for the first round for months. Inspectors have been on the ground to verify the location and conditions of around 500 orphan wells that the agency can bundle into contracts and quickly issue a tender. He digitized historical records to make everything known about old wells accessible to inspectors in one app. He has issued guidelines for navigating the state contracting process for companies that have never plugged a government well before.

The next phase of funding will be much more important and more difficult to manage.

The Formula Grants – which are based on a state’s inventory of orphan wells and its recent oil and gas job losses – are expected to net Pennsylvania about $ 300 million. There is no immediate deadline to start tapping into this pot of money, so regulators will have time to strategize on how best to use it.

But once they get the money, they have to spend it within five years.

There are also other types of grants – worth up to $ 70 million combined – if Pennsylvania spends more state money on plugging and takes steps to toughen its rules to prevent further wells are abandoned.

At its peak, DEP could execute more than 300 multi-well patching contracts in a year, according to the agency’s projections. Between 2018 and 2020, the ministry had the funds to execute just nine contracts in total.

“This is something you have to be positive about, absolutely,” Pelepko said. “It’s something to be excited about. But that’s something to really focus on – how we can do all we can to prepare for a smooth transition into this era of increased funding. We are truly in uncharted waters.

The agency is preparing in particular by asking contractors about their ability to plug wells under government contracts, which can be tedious.

As of November 10, the agency had received responses from nearly 80 companies, and all of them said they were interested in plugging wells in Pennsylvania, Pelepko said.

About half of the companies that responded had previously plugged wells under a state contract. Two-thirds said they plan to hire additional staff if they are awarded contracts.

The art of a good butcher is difficult to master

Plugging contractors with a long history in the state are well aware of the difficulty of turning a flood of money into thousands of holes cemented in the ground.

“I think it will be a real challenge for states to put in place a program that spends money wisely but spends it nonetheless,” said Steve Plants, president of Plants and Goodwin Inc., a service company. well and connection. company that has been around for half a century.

“I’ve always said that I think people deal with adversity better than prosperity.”

Mr. Plants has been getting a lot of calls lately, he said, from “people who don’t know anything about plugging wells but want to know how they can attach themselves to our wagon.”

Recently, he spoke with a finance company that wants to get carbon credits for its clients by plugging orphaned wells that release methane, a potent greenhouse gas.

The influx of federal money will compete for scarce hook-up resources.

Some part of Plants and Goodwin’s work, for example, involves plugging orphaned or abandoned wells through contracts with state environmental agencies.

But another part is the often more lucrative and stable job of plugging old shale gas wells – those that were drilled at the start of the shale rush or those that encountered problems with leaks or were blocked by a lack of pipelines.

The same kinds of environmental concerns about methane leaks that drove federal legislation are also pushing big oil and gas companies, under pressure to show greenhouse gas reductions, to speed up their plugging programs.

“There is going to be a real shortage of contractors, a lack of equipment, a lack of personnel and certainly a lack of skills,” Mr. Plants said.

“Well hooking up, even if it’s not sexy, it’s an art,” he said. “There are a lot of things you can do (badly) that double and triple the cost of a project. “

Jason Nicholas, managing member of Ohio-based Nick’s Well Plugging, said the labor shortage has been severe over the past year.

“They’re going to have a lot of money that they can’t get rid of,” predicted Nicholas, who started the business with his father just over a decade ago.

Nick’s Well Plugging has a crew of half a dozen workers. The company would like to add more, but “we can’t even get someone in the door.”

Mr. Nicholas assumes the deterrent is the nature of the job itself: “It’s dirty, cold and a lot of people don’t like to do that. “

There is no formal training program for hookup professionals, Mr Plants said, and training newbies is expensive and time consuming. They require constant monitoring and it can take months to determine if the worker is suitable for the job or wants to stay there.

Of the 55 employees at Plants and Goodwin, about 10 now live in other states like Texas, Oklahoma, and Michigan. The company flies them to jobs, pays for their accommodation and gives them a daily allowance, then brings them home.

It’s expensive and “certainly nothing I would have imagined” in previous years, Mr. Plants said, or without the goad of his son, whose idea was to recruit experienced professionals across the board. country.

Regulators say they know they’ll need a range of strategies to use the windfall.

They hope the $ 4.7 billion in new nationwide plugging funding could spur big oil and gas companies into tackling plugging projects that were too paltry to be worth before, while also enticing smaller ones. conventional oil and gas companies to focus on plugging.

With more than a century and a half of drilling history, Pennsylvania has approximately 200,000 additional wells to locate, evaluate and research beyond the 8,900 that have been verified and listed on the official list of abandoned and orphaned wells.

Not all federal money should be spent on cleaning up old wells and cementing them. It can also be used to find and characterize abandoned wells and remedy the contamination they have caused.

Discussion at DEP’s Oil and Gas Advisory Board in September focused on how to empower municipalities or nonprofits to locate abandoned wells, and whether some of the funds could be used for systems. mitigation in neighborhoods that were built over old buried oil and gas wells that are unlikely to ever be discovered and plugged in.

Mr. Klapkowski said the law gives state oil and gas programs a lot of flexibility to tackle the abandoned oil and gas issues they face.

“The message we’re getting is that it’s money that’s really meant to do this job,” he said.

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