Legislation would allow Pennsylvania companies to bid on well plugging

The House Environmental Resources and Energy Committee advanced legislation on Tuesday that would allow any Pennsylvania company, regardless of the size, to bid for a Department of Environmental Protection (DEP) contract to plug oil and gas wells.

House Bill 2528 also would require the DEP to award contracts to eligible Pennsylvania companies before considering the bids of out-of-state companies. Currently, the majority of well-plugging contracts are awarded to out-of-state businesses.

Pennsylvania has between 100,000 and 200,000 orphaned gas and oil wells. Since January 2020, less than 20 have been remedied.

“This is common sense legislation that puts Pennsylvania workers and businesses first,” state Rep. Jim Struzzi (R-Indiana), who introduced the bill, said. “Granted, if DEP can’t find a suitable Pennsylvania-based business partner, it would obviously be allowed to look elsewhere for an eligible company to do the work. I was shocked to learn of these restrictive policies, but I’m glad we have an opportunity to rectify this unfortunate situation and help create and retain more jobs here.”

“As the commonwealth is slated to receive additional funding for well plugging through the federal infrastructure bill, it is important we get the most for our money – the taxpayers’ money – and plug as many wells as possible,” Rep. Martin Causer (R-Cameron/McKean/Potter), who sponsored the bill, said. “Department of Environmental Protection officials have acknowledged how cumbersome the process is currently, so the time is right to explore other options.”

In addition, the committee also advanced legislation that would create a program to provide grants to companies that work to plug orphan wells.

Under House Bill 2644, DEP would direct 20 percent of the funds it receives from the federal government toward the grant program. The remaining funding would go toward the existing well-plugging program.

DEP would award $10,000 grants for plugging wells of 3,000 feet or less in-depth and $20,000 grants for plugging wells more than 3,000 feet deep.

The bill also would fix the current bonding amounts for conventional wells and specify that the Pennsylvania Environmental Quality Board cannot adjust these amounts by regulation.

The bill moves to the full House for consideration.