The state Department of Environmental Protection yesterday announced a settlement agreement with two oil and gas companies for well plugging violations in 23 counties across Pennsylvania.
Diversified Gas & Oil Corporation of Birmingham, Alabama and Alliance Petroleum Company of Ohio will pay a $7 million surety bond for 1,412 abandoned or non-producing wells. Diversified Gas & Oil purchased Alliance Petroleum last year.
The settlement addresses a major discrepancy in state law, which requires a $25,000 blanket bond to cover all of a company’s wells. When DEP ordered gas and oil companies last year to plug 1,058 abandoned wells and 354 non-producing wells, the $25,000 bond requirement made the bond for each well compute to about two dollars. Actual plugging costs begin at about $20,000. The new agreement also covers future well acquisitions.
In our region, the settlement covers 209 wells in Indiana County, 260 in Jefferson County, 109 in Clearfield County, 106 in Westmoreland County, 95 in Armstrong County, and two in Cambria County.
