Plugging Wells (LINGO Incentives)

Leaking wells contribute significantly to methane emissions. In recent years, governments (especially in the U.S. and Canada) have started to allocate funds to deal with orphaned wells. For example, in the U.S., the Bipartisan Infrastructure Law (passed in 2021) dedicated $4.7 billion to this effort. In some cases, private companies engage in plugging wells as part of climate finance mechanisms. The sites are identified based on their methane leakage and environmental risk. Government agencies, often supported by environmental organizations, use satellite data, infrared cameras, and well databases. Contractors, funded through climate finance programs, then seal these wells by injecting cement. Methane reductions are measured using sensors. Plugging a well costs $110,000 or more for a single site closure. In terms of climate impact, a single well can emit around 300 tons of CO2e per year for a 25 years lifespan translating to a nominal price of 9-10 USD per ton. As of early 2023, over 3,000 wells had been plugged across Pennsylvania.Onyx Transition seeks to close down profitable, active, and highly emissions-intensive oil assets to produce high-quality carbon credits. Its methodology is currently under review by Gold Standard. These credits are then to be invested in carbon removal and climate restoration initiatives.

Resources :

•  DEP (2023) Plugging Pennsylvania’s Abandoned Oil and Gas Wells, Article, January 2023
•  Onyx Transition (2024) How it works, Blog Post 
•  EDF (2021) Plugging orphan wells across the United States, Blog Post, October 2021