Tackling a legacy of abandoned wells
A new Pittsburgh well-plugging company and a leak detection firm hope to apply ‘technology of the future’ to a climate problem
The first indication that something was wrong was the smell. Unmistakably hydrocarbon. Even before Paul Wehnert’s laser gun began to beep, it was obvious there was gas leaking. It actually hissed.
Mr. Wehnert, chief marketing officer with Texas gas leak detection firm Heath Consultants Inc., and Brad Maddox, CEO of NextLVL Energy, a new Pittsburghbased well plugging company, had selected this old oil well — a few hundred feet into the woods off a steep country road in eastern Ohio — because it was so obvious.
The thing was a mess. What better place to illustrate how much methane will be prevented from reaching the atmosphere when the old hole is plugged?
Mr. Wehnert took out the tools of the trade: a metal detector to locate buried iron or steel pipes, a handheld optical laser that beeped constantly when pointed in the direction of the rusted pump jack, and the thermal imaging camera to “see” the invisible gas and record it.
What he didn’t bring was the laptop that would translate that video into a leak rate for the site.
That’s the innovation, the “technology of the future,” Mr. Maddox said.
NextLVL and Heath have partnered to pursue a growing problem and an opportunity
— Appalachia’s long legacy of unplugged and leaking oil and gas wells.
Putting a number to a leak is critical for a few reasons, Mr. Maddox explained. First, it helps companies and regulators prioritize their well-plugging projects to achieve the greatest environmental benefit. It’s also a way for oil and gas companies, many of which have set net zero emission goals, to put data where their mouth is.
This wasn’t necessarily something that had concerned oil and gas companies in the past, Mr. Wehnert said. This is his 45th year in the leak detection industry and for almost his entire career, the focus has been on finding the leak and fixing the leak.
“There wasn’t a lot of emphasis of how big is the leak,” Mr. Wehnert said.
“Then we got into carbon taxes and methane taxes.”
A focus on methane’s contribution to climate change — the gas, which is the main component of natural gas, is estimated to be up to 86 times more effective at trapping heat in the atmosphere over 20 years than carbon dioxide — has pushed both regulators and companies to pay
A focus on methane’s contribution to climate change — the gas, which is the main component of natural gas, is estimated to be up to 86 times more effective at trapping heat in the atmosphere over 20 years than carbon dioxide — has pushed both regulators and companies to pay more attention to leaky wells and pipelines.
more attention to leaky wells and pipelines.
And while there are still no federal carbon or methane emission taxes on the books — both have been proposed and are still being debated in Congress — there is also another reason to quantify emissions. They might qualify for carbon offset credits.
Coal companies already do this by measuring how much mine methane they keep from reaching the atmosphere and earning carbon credits for each CO2 equivalent of mine gas that gets captured or destroyed.
The idea of generating carbon offset credits by plugging abandoned oil and gas wells was originally included in Pennsylvania’s plan for joining the Regional Greenhouse Gas Initiative, a multi-state compact that puts a price and a shrinking cap on carbon emissions. When that was removed from the plan, NextLVL wrote to the Pennsylvania Department of Environmental Protection in January 2021 urging it to reconsider and touting the thermal imaging camera and Heath’s software for quantifying emissions as a way to verify the environmental benefits.
“(The company) stands ready to work with DEP and lend its expertise to shore up the technical details and mechanics of the offset program,” Mr. Maddox wrote in that letter.
The next big thing
Mr. Maddox was vice president of drilling and completions at EQT Corp. when he left the Pittsburgh company in 2019 as part of an exodus of the old guard after Toby Rice led a shareholder revolt that installed him at the helm.
He said he took a few months off and bandied about ideas with fellow EQT alumni for what was missing in the space where he worked.
In 2020, they launched Next LVL as a kind of tech forward, logistics-minded, full-service plugging company whose owners could sit across the table from a client with hundreds of wells to plug and say, “We’ve been there.” Mr. Maddox said he used to run EQT’s plugging program.
It’s large scale project management, he said, and most of the work takes place on the earth’s surface — clearing trees, building roads, hauling away old equipment, routing cement trucks. Before any of that starts, there’s lots of desktop planning.
In its first year of operation, Next LVL plugged about 52 wells. This year, it plans to double that. With 25 employees and three rigs, the company is trying to fan out across Appalachia.
While it has mostly plugged for private companies, ranging between $15,000 and hundreds of thousands perwell, Next LVL is eager to connect with state agencies, especially now that their plugging programs are about to come into some serious money.
The DEP estimates that as much as $395 million may be headed to the state over the next decade to plug abandoned wells as part of a large federal infrastructure bill that passed last year. Its usual annual budget for plugging is about $1.5 million. The estimated cost to plug and remediate the 27,908 abandoned and orphaned wells that the state has documented so far would be more than $1.8 billion, the DEP recently wrote in a notice the U.S. Department of Interior.
“When we started this company, the federal funding wasn’t on our radar,” Mr. Maddox said. Now he looks like a prophet. Getting credit
On the screen of Mr. Wehnert’s thermal imaging camera, several plumes danced around the rusted wellhead and pump jack. There were also leaks in the pipeline that carried gas to the tank battery up the hill.
Traditionally, quantifying a leak meant trapping it in a kind of containment bag then measuring the volume over time. This could be tricky to do on a well site with multiple leak points, not to mention one that required choreography to wade through thickets of briars. A company that is going to plug the well anyway may not want to spend the time and money to do this.
The indirect measurement technique of turning a video of a plume into an emission calculation will allow Next LVL to characterize a lot more wells in a shorter period of time, Mr. Maddox said. And that data would get passed along to the well operator.
“You’re gonna go out and plug this well, but you can also use it to offset your carbon emissions,” would be the pitch, he said. That could mean a company highlights that data in its annual sustainability report or — and Mr. Maddox knows this is coming — the well operator uses the leak rate to apply for carbon credits.
While there are few mandatory carbon markets in the U.S. — the Regional Greenhouse Gas Initiative runs one of them — voluntary carbon markets are surging. In the voluntary markets, corporations or communities that have made commitments to releasing fewer greenhouse gases will pay for carbon credits to offset emissions they can’t yet eliminate.
The nuts and bolts of how to turn plugged wells into carbon credits is still being debated. For example, how many years would a plugged well have otherwise leaked and how does that translate into credits?
The American Carbon Registry, one of the three major carbon trading registries, put out a draft of its proposed methodology in September in which it suggested that well-plugging projects would have a 10year crediting period with a renewal option for another 10.
How to measure the leak is another story. The methodology, which calls for direct measurement through an enclosure method like a bag, was developed in coordination with the Well Done Foundation, a nonprofit that uses private money to plug abandoned and orphaned wells in order to reduce methane emissions. It is also looking to generate carbon offsets with its work.
So are oil and gas firms. In a November investor presentation, Diversified Energy Co., the largest aggregator of old oil and gas wells in Appalachia, said it plans to begin generating carbon offsets through an accelerated plugging program over the next several years.
Other companies have hinted their interest as well. But none has yet asked Mr. Maddox for leak rates and he said he is just starting to market that feature to companies and to state agencies.
There’s no reason why taxpayers who end up responsible for the leaks left by now defunct drillers shouldn’t get credit — carbon credit, that is — for cleaning them up, he said.