Study: Price Tag For Plugging Abandoned Wells Could Exceed $100,000

A new Carnegie Mellon University study puts a price tag on what it costs to plug an abandoned Marcellus Shale well – and argues both impact fees in front of the General Assembly fall short, when it comes to the amount of money they require drillers to post up front.
From the Post-Gazette:

Plugging an abandoned Marcellus Shale gas well in Pennsylvania could cost $100,000 or more, and well bonding changes proposed by the Corbett administration could stick taxpayers with almost all of that bill, according to a study from Carnegie Mellon University.
The CMU study found that the new Marcellus gas well bonding fees, recommended by Mr. Corbett’s Marcellus Shale Advisory Commission and now under consideration in the Republican-controlled Legislature, would require drilling companies to cover only a fraction of the costs of plugging and decommissioning old, nonproducing and abandoned gas wells.

The proposed new bonding requirements, while higher than those now in place, would eventually have dire economic and environmental consequences for the state, similar to those caused by the inadequate bonds required of the early coal, oil and shallow gas industries, the study said. It will appear in the journal Environmental Science & Technology and has been published online.
Neither the existing $2,500 per well bonding requirement nor the proposed increase to $10,000 per well are high enough to make gas drilling companies clean up after themselves or cover the costs of plugging and decommissioning a well, said Austin Mitchell, a doctoral student in the Department of Engineering and Public Policy at Carnegie Mellon University, who co-authored the study with Elizabeth Casman, an associate research professor in that department..

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