STATE & IIJA FUNDS PROVIDING BOOST TO IMPROVE HEALTH, SAFETY, ENVIRONMENT
Available state and federal funding is providing heavy-construction contractors with literally and figuratively uncapped potential for profitable work throughout Ohio.
While the Ohio Department of Natural Resources (ODNR) has had its Orphan Well Program in place for nearly 50 years, recent federal funding through the Infrastructure Investment & Jobs Act (IIJA) is increasing potential funding to $634 million through 2035 to embolden Ohio’s efforts in properly plugging abandoned oil and natural gas wells.
The term orphan well defines a well with no owner of record. Although oil and gas operators are required to seal, cap, or plug a site when it reaches the end of its productive life, nearly two centuries of oil and gas development has left a large inventory of abandoned, or orphan well, sites.
With more than 20,550 documented orphan wells – and potentially tens of thousands of undocumented wells – needing attention throughout the state, ODNR Orphan Well Program Engineer Jason Simmerman said there are plenty of opportunities for contractors. “There is plenty of work from the perspective of the number of orphan wells,” he said. “There’s a career or more of orphan wells for us to plug at the current time, and there are also significant amounts of funds to go around.”
Simmerman said Ohio is fortunate in having both a state severance tax – because of 2017 legislation deriving from Marcellus Shale drilling that increased program funding from $1 million annually to more than $20 million – and additional federal funding from 2021’s REGROW Act in the IIJA. “We have a lot more funds than other states in the country, because we have two funding sources that are feeding the program. So, it has allowed us to really grow into a significant amount.”
Abandoned wells not properly capped or plugged are risks to health, safety and the environment. According to the Environmental Defense Fund (EDF), “When a well is left unplugged, it can leak oil and other toxic chemicals, endanger water wells, contribute to air pollution and emit methane …” The New York-based environmental advocacy organization adds, “Orphan wells also significantly impact local communities and economies by threatening the health and well-being of residents and decreasing property values – which lowers funding for schools, police departments and other public services.”
Simmerman added, “Public drinking water supplies subsurface can be affected by orphan wells, and methane and oils coming to the surface can affect the environment along with human health.”
Ohio’s history of oil and natural gas drilling combined with its geographic size and population makes for heightened issues regarding orphan wells. “Ohio has probably the most dense population around where our wells are located in the country,” Simmerman said. While orphan wells are located throughout the state, Northeast Ohio’s heavily populated areas make encounters more prevalent. “It really occurs all over the state, but it is really prevalent in the northeast corner of the state, where we have the Cleveland Akron-Canton area,” he added. “… So, when someone goes to excavate for building, many times they will find a well; when someone actually completes the building and moves into it, they might find methane in that building because there is a well nearby that that they didn’t locate … We have found ourselves plugging wells very close to homes; we’ve plugged them in gymnasiums in schools; along road rights-of-way; we’ve plugged them in gas station parking lots. I can show you many, many situations where there is basically a footprint of human activity and there is a gas well that caused them a problem.”
While there has been much talk about current lifestyles and carbon footprints influencing climate change, abandoned wells add to this problem. The EPA estimates emissions from inactive, unplugged wells are equivalent to 7 million to 20 million tons of CO2 per year in methane. The EDF said a reduction of this amount in methane emissions would be “equivalent to taking anywhere between 1.5 and 4.3 million cars in the United States off the road for a year.”
The influx of funding and inventory of abandoned wells has ODNR working with the heavy-construction industry to publicize the state’s Orphan Well Program.
Seeing ODNR’s “extreme need for more contractors” to perform well capping due to the added funding, and to continue developing a working relationship with the department, Ohio’s International Union of Operating Engineers (IUOE), Local 18, the Labors’ District Council and Ohio Contractors Association are helping get the word out regarding these projects. “We have started doing this by spotlighting the Local 18 Apprenticeship Program and the Ohio Labor Training Program,” said IUOE, Local 18, Business Manager Michael R. Bertolone.
“We reached out to ODNR to see if our working members and signatory contractors could provide some relief in this (well capping) industry,” said Ohio Laborers’ District Council Field Representative Adrian Harrison. “… The Abandoned Well Program is having a difficult time succeeding in milestones due to labor constraints and rig operators … The federal government funds’ (IIJA/REGROW) require prevailing wage and plan to issue $300 million by year 2030. What a great opportunity to get a few crews going and working steady for close to a decade.”
Simmerman said the IIJA funding promotes labor agreements, which in-turn provides ODNR with unique opportunities. “We started to engage with some of the unions that were presenting themselves to us and we’ve had several meetings over the course of last year to just kind of let them know what our program looks like and us to understand what they offer as well,” he said. “… At this point there is plenty of opportunity there for those contractors to get involved.”
Referencing the Operators’ and Laborers’ training programs, Bertolone added, the organizations are “ready to do what is needed to train the much-needed additional workers in this industry in order to accomplish the massive task in Ohio and all across Appalachia.”
Last year, the IUOE Local 18, and Ohio Laborers District Council participated in a webinar and “lunch and learn” to promote the ODNR Orphan Well Program to signatory contractors interested in working in the oil & gas industry and vice versa.
CAPPING 1-2-3
Simmerman describes three phases of a well capping project: access, plugging and restoration.
With no limit to where an abandoned well may be located, access to a project varies and can oftentimes require temporary road construction. “Sometimes you’re right off the road and it’s easy, but many times you’re not,” said Simmerman, who mentioned a recent well plugging within a lake – which he added isn’t unusual. “… With an orphan well, that well maybe sat there for as much as a century. So, we have to locate a route to get in that often involves some sort of nationwide permitting to maybe cross a stream or a wetland. We have to check for endangered species and historical structures. All that is on ODNR, but it shows the complexity of access.”
The plugging or capping process entails many variables as well. “A lot of these wells have many different types of things in them. Maybe the (original) plug consisted of materials that are not adequate today – such as drill cuttings and clay; they may have logs stuck down them; they may have had steel balls put in them, which aren’t standards for today,” Simmerman said. “… Beyond that, the wells are deteriorated; so, much of the casing and tubing – the steel – that is in them is deteriorated and wants to fall apart instead of come out of the well.” Once original plugging materials and well pieces are removed to the depth of the well, groundwater is protected by new casing. After the hole is cleaned, the site is checked to ensure it no longer is producing oil or gas before plugging commences. Simmerman said the new plugs consist of cement set at intervals from the total depth of the well to the surface.
The final step is restoration, which is comprised of grading, removal of the temporary road and reseeding. Simmerman explained the goal of this restoration is returning the site to how it was “prior to the disturbance of the well.”
Though crew size and project timelines vary, Simmerman said two to four workers and two to three weeks are typically needed to complete well capping projects. However, he adds projects can range from as little as several days to several months.
“We understand that plugging work may be outside the typical area that OCA members work in, but there are aspects to what they do as far as doing site access and site restoration,” said ODNR Division of Oil & Gas Resources Management Assistant Chief Tara Lee. She said opportunities for OCA members range from assisting an existing plugging company by performing site access and restoration work or adding Oil & Gas work to its company offerings. “Maybe they investigate it even further and decide that this is something they may be interested in and purchase a plugging rig and get in the plugging aspect as well,” Lee added “… There is substantial money available to do this work for at least the next 30 years, so someone could make an investment from a company standpoint; there’s going to be work out there where you can make a good living.”
Simmerman said Ohio’s current robust funding for its abandoned well program provides uncapped potential.
“It’s certainly a boost from the money standpoint,” Simmerman said of state and IIJA funding. “We expect to have over more than $300 million over the next decade from both the state and federal funds – so over $600 million to plug wells. Just the math shows you that it really did double our program over the course of that decade.
“The IIJA funds have boosted the national attention on orphan wells,” Simmerman added “… That brings everybody who has an interest in it to the table; those who are concerned about it; those who have the ability to do work. So, we’ve seen groups coming together to talk about it and we’ve also seen a larger contractor interest in it as well.”
Contractors can learn more about Ohio’s Orphan Well Program at https://ohiodnr.gov/business-and-industry/energy-resources/oil-and-gas-wells/ orphan-well-program to find ways to become involved. If interested in pursuing work, Simmerman said inquiries can be emailed to orphanwellprogram@dnr.ohio.gov