dostoyevsky-official:

Hutson is the founder and chief executive officer of one of the strangest companies ever to hit the American oil patch and the reason for our four-day visit to the Appalachian region. While other oilmen focus on drilling the next gusher, Hutson buys used wells that generate just a trickle or nothing at all. Over the past four years his Diversified Energy Co. has amassed about 69,000 wells, eclipsing Exxon Mobil Corp. to become the largest well owner in the country. Investors love him. Since listing shares in 2017, Hutson’s company has outperformed almost every other U.S. oil and gas stock, swelling his personal stake to more than $30 million.

But Diversified’s breakneck growth has alarmed some regulators, landowner groups, and industry insiders, not to mention environmental advocates. State laws require that every well be plugged with cement after it runs dry, an expensive and complicated chore. At the rate Diversified is paying dividends to shareholders, some worry there will be nothing left when the bills come due. If a company can’t meet its plugging obligations, that burden falls to the state, which means Ohio, Pennsylvania, and West Virginia could be stuck with a billion-dollar mess. “The model seems like it’s built on abandoning those assets,” says Ted Boettner, who’s studied abandoned wells at the Ohio River Valley Institute, a regional research organization. “It looks like a liability bomb that’s destined to explode.”

[…] By not requiring drillers to post cleanup costs upfront, state laws incentivize companies to delay plugging as long as they can. Marginal well owners also collect a federal tax credit, meant to support jobs in the oil and gas industry when prices fall below a certain level. Last year, Diversified reported an $80 million benefit from the subsidy, or about one-fifth of what it got from selling oil and gas. In West Virginia there’s an additional benefit. Last year the legislature cut the severance tax on the lowest-producing wells in half. Diversified, by far the biggest beneficiary of the cut, told investors it “engaged with state regulators in West Virginia to help craft” the bill, which also directs revenue toward plugging orphaned wells.

[…] Hutson says there’s no cause for worry. He claims to be able to squeeze more gas out of old wells than other companies can and keep them going longer. On average, he figures his wells have an additional 50 years in them, which means there’s no hurry to start socking away money to plug them. It also means they could be spouting pollution long past 2050, the target date set by President Joe Biden for zeroing out emissions across the economy.

State regulators say Diversified hasn’t broken any rules by building an empire of dying wells. Nor has it violated any restrictions on methane emissions, because none apply. Indeed, state and federal policies—from plugging regulations to tax subsidies—encourage companies to do exactly what Diversified is doing: Keep almost dead assets on life support as long as possible, no matter how much they may damage the planet.

[…] We found methane leaks at most of the places we visited. Some sites showed signs of maintenance in recent months, but others looked more or less abandoned. […] At 59% of the sites we visited, emissions were significant enough to cause our detector to sound a safety alarm, indicating that the concentration of methane near the instrument’s sensor exceeded 5,000 parts per million. Normal air contains about 2 parts.

[…] Advocates for natural gas call it a cleaner fossil fuel because it releases about half the carbon dioxide as coal when burned. But there’s a catch: Left unburned, natural gas consists mostly of methane, which is much better at trapping heat. Released into the air, a ton of methane will cause at least 80 times more warming over the next 20 years than a ton of carbon dioxide. That’s one reason controlling methane is among the cheapest and quickest ways to slow climate change and limit the wildfires, heat waves, rising seas, and droughts it’s unleashing. According to one recent estimate, putting a lid on human-caused methane emissions could prevent as much as one-third of the warming expected in the next few decades. 

[…] Only about 3% of gas needs to escape on its journey from wellhead to power plant to make it worse for the planet than coal. […] Two other peer-reviewed studies, using different measurement techniques and examining gas wells in West Virginia and Pennsylvania, found loss rates of 9% and 18% […] Taken together, the research suggests that gas from old wells in Appalachia is one of the dirtiest components of the U.S. energy system.The damage doesn’t end when these wells stop producing. Some continue to leak methane for years if they’re not properly plugged.