U.S. states expand abandoned well repurposing for clean energy use

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States repurpose abandoned wells

Highlights

Texas, New Mexico, and Alabama passed laws in the past year to repurpose abandoned oil and gas wells for clean energy uses, with Pennsylvania and Oklahoma considering similar measures.
Plugging an orphan well in the U.S. costs on average $40,000 and up to $250,000, with Oklahoma estimating over 200 years needed to seal its 17,000 orphan wells despite federal funding.
Biden’s Infrastructure Investment and Jobs Act allocated $4.7 billion for orphan well remediation, but lawmakers see commercial clean energy reuse as key to attracting private capital and offsetting public costs.

State legislation targets new uses for idle wells

As reported by Financial Times, a growing number of states are creating or advancing laws that make it easier to repurpose abandoned oil and gas wells for energy storage, heat generation and, in some cases, geothermal power. Texas and New Mexico passed such bills last year, Alabama did so this year, Pennsylvania has similar legislation awaiting approval and Oklahoma aims to pass its own measure next year.

Pennsylvania state representative Arvind Venkat, who is leading that state’s bill, says converting wells into productive clean baseload energy assets would be a major gain. Lawmakers backing the approach argue that commercial reuse could draw private capital into a problem that otherwise depends heavily on public funds.

The U.S. has about 4 million abandoned oil and gas wells, according to the Environmental Protection Agency, while the Interstate Oil & Gas Compact Commission says states had identified 141,000 orphan wells as of 2023. Those wells, which have no known owner, can be costly to seal and may leak methane, contaminate groundwater and release hazardous air pollutants such as benzene.

Funding limits and technology shape the outlook

Biden’s Infrastructure Investment and Jobs Act provided $4.7 billion for states to identify and plug orphan wells, but the programme has faced criticism for shifting cleanup costs to taxpayers and for not going far enough. The U.S. Department of the Interior says much of that funding is available again after a temporary freeze by the Trump administration.

Plugging costs remain a major obstacle. The IOGCC says sealing an orphan well can cost as much as $250,000, with an average of about $40,000 per well, and Oklahoma’s Corporation Commission says it would take the state more than 200 years to plug all known orphan wells on its own despite receiving one of the largest federal allocations.

Not every well can be repurposed, because boreholes must be deep enough and casings intact, conditions that many older wells may not meet. The clean energy technologies are also still developing, although companies such as Colorado-based Gradient Geothermal are studying how orphan wells could support geothermal projects, including a district heating and cooling model in Pierce, Colorado, that showed technical potential but also high upfront costs.

In our earlier article, we covered the 21st Century ROAD to Housing Act becoming law as a bipartisan effort to tackle the U.S. housing shortage by removing barriers to construction. We noted that the measure emphasizes taxpayer protection and local control while aiming to expand long-term housing stability and access to homeownership for American families.

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