NEW FRANKLIN — The state has millions of dollars to spend on plugging old and potentially hazardous oil and natural gas wells. Now, it’s looking for more contractors to do the work.
Prolific shale wells and a change in state law have boosted the Ohio Department of Natural Resources fund for plugging so-called orphan wells.
The orphan well program has nearly $25 million this fiscal year — $10 million more than the previous year — and is looking to have $28.1 million next fiscal year.
“We’ve got a lot of money to spend, and we want to plug a lot of wells,” Rick Simmers, chief of ODNR’s Division of Oil and Gas, told a group of plugging contractors Wednesday during a meeting at Portage Lakes State Park.
“We need more contractors,” Simmers said.
A similar meeting will be held at Salt Fork State Park in Guernsey County on Thursday.
Orphan wells are oil and gas wells that weren’t plugged properly and don’t have an owner who could pay to do that work.
The wells are health and environmental hazards because they can leak oil, natural gas and brine, and even cause explosions when natural gas collects in a building near a leaking well.
Orphan wells have been found under a school, next to houses, in farm fields and even under a reservoir in Ohio.
“You name it, we’ve seen it in terms of where they show up,” said Jason Simmerman, orphan well program engineering manager.
ODNR has identified nearly 1,000 orphan wells in 71 counties. Summit has nine and Stark has seven.
But the actual number of orphan wells is unknown. ODNR estimates that more than 280,000 wells have been drilled in the state since the mid-1800s.
The state has had a program to plug orphan wells since the 1970s. It earmarks a percentage of the fees and taxes collected on oil and natural gas production for ODNR’s plugging program.
Shale drilling has generated more taxes and fees in recent years, and in a move supported by drillers, environmentalists and landowner groups, state lawmakers last year upped the percentage of money allotted to the plugging program and streamlined some of its requirements.
The cost to plug a well varies widely, depending on the well’s depth, location and the difficulty of the job, but most contracts exceed $50,000.
In the fiscal year that ended June 30, the state entered contracts to plug 153 wells and plugged 75 wells. Contractors have up to a year to complete a job.
This fiscal year, the state wants to sign contracts to plug some 200 wells.
But if Ohio hopes to plug even more wells, it will need more contractors. Right now, only about nine contractors regularly bid on plugging projects, Simmers said.
About 20 industry folks attended the Portage Lakes meeting; about half of them worked for companies already certified to get state plugging contracts.
They suggested they would be more inclined to bid if they knew which wells ODNR planned to plug over the next several years. The state releases its plugging schedule a year in advance.
ODNR gives priority to plugging high-risk orphan wells, but the state is hoping to roll out a revised program this fall that would allow landowners to contract with a plugger, who would be paid by the state.