Last week, Senate Republican Leader Mitch McConnell announced that Kentucky would receive nearly $104 million to plug legacy abandoned and orphan wells scattered across the oil and gas producing areas of Kentucky. This windfall of federal funding, resulting from the bipartisan Infrastructure Investment and Jobs Act of 2021, will go a long way to help remediate and cap some of the state’s identified 14,000 abandoned and orphan wells.
While the Commonwealth leads the nation in documented orphaned oil and natural gas wells, we have made considerable progress in neutralizing this issue through proactive regulatory measures, industry participation, and now, critical federal funding. Yet, the questions remain, how did we get here, and what else is the industry doing to help plug these nuisance wells?
Orphan wells, by definition, are wells that have been abandoned and for which there is no remaining financially responsible party. Kentucky’s oil and gas history predates the Civil War and was largely unregulated for more than a century.
Historically, operating with little to no oversight meant that oil and natural gas producers could drill and abandon their wells if they did not produce or were unprofitable. Other companies simply went out of business and left no paperwork indicating the existence or location of the wells. While most of these unplugged orphan wells have little to no environmental impact, some could be problematic for landowners and ecological conservation.
Since the 1960s, the industry and state regulators have made significant strides to regulate the oil and gas industry. Lawmakers passed the Kentucky Oil and Gas Conservation Act of 1960, which established regulatory oversight to address a host of oil and gas issues, including bonding liability and orphaned well plugging.
Because most of these legacy orphan wells were drilled before the law’s passage, the state was saddled with a high volume of unplugged orphan wells out of the gate that was often left unaddressed. Over the last 30 years, state regulators rose to the challenge and began to document these well locations meticulously.
Unlike many states, Kentucky’s Division of Oil and Gas has done a superb job locating, categorizing, and plugging orphan wells. While the number of documented orphan wells seems high, the Division is responsible for plugging over 4,000 wells throughout their history, including nearly 500 plugged in the past three years. If a well poses an environmental threat or impedes beneficial re-use of land, the Division prioritizes those wells for plugging and the reclamation of the affected area.
Kentucky’s producers have also stepped up to the challenge of plugging their non-producing wells. Annually, our producers plug hundreds of non-producing wells (non-orphan wells) as a part of doing business. The industry is committed to plugging more wells in accordance with state regulations.
The Kentucky Oil and Gas Association (KOGA) and its members have and will always prioritize public health and safety while responsibly producing oil and natural gas in Kentucky. Over the past decade, the industry has partnered with Kentucky’s Energy and Environment Cabinet, conservationists like the Kentucky Resources Council, and public stakeholders, among many others through Kentucky’s acclaimed Oil and Gas Workgroup to modernize Kentucky’s oil and gas regulations, including legacy orphan well plugging.
The Workgroup has worked persistently with lawmakers to address several oil and gas issues, including:
- Plugging orphan wells and providing program funding mechanisms
- Increased bonding to cover the cost of plugging wells
- Imposing bad actor provisions to prevent permit-ineligible producers from operating in Kentucky
- Preventing radioactive “produced” drilling wastewater from being dumped in Kentucky landfills
The Workgroup also proposed and asked the legislature to establish the Kentucky Abandoned Storage Tank and Orphan Well (KASTOW) reclamation program, including a funding mechanism for remediating abandoned oil storage tanks. Currently, both the General Assembly and Governor Andy Beshear have allocated funds in their respective budgets to jumpstart this essential remediation and reclamation program.
KOGA applauds Leader McConnell for delivering these much-needed funds to help our state regulators and provide them with the resources they need to tackle this issue aggressively. KOGA also commends the Kentucky Division of Oil and Gas for being a national leader in identifying and plugging orphan wells.
With these tools and our continued partnerships, we are confident that we can accomplish our goals of reducing the surface and ecological impact of orphan wells. The Kentucky Oil and Gas Association and its members will continue their efforts to assist in the efforts to modernize oil and gas regulations as well as the plugging and remediation of legacy orphan wells.
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