Managing Environmental Liability: An Evaluation of Bonding Requirements for Oil and Gas Wells in the United States.

Inactive oil and gas wells present an environmental hazard if not properly plugged. Upon drilling a well, operators are required to post a bond, which ensures that the operator has an incentive to plug and abandon (P&A) at the end of the well's life, and that, if the state is left with the liability of managing "orphaned" wells, it can cover the cost of P&A. Using data from 13 state agencies on their orphaned well plugging expenditures, we provide new estimates of P&A costs in the United States and compare them to bond amounts. Current state bonding requirements are insufficient to cover the average P&A cost of orphan wells in 11 of these 13 states. These should be reviewed and revised where necessary. We also examine the factors influencing P&A costs using detailed data on orphaned wells in Kansas. Given the variability of P&A costs, bonds would be more effective if they varied by factors that are meaningful in explaining P&A costs, such as well depth, location, and proximity to groundwater. State regulators can use the statistical approach developed in this paper to improve bonding requirements and to better predict the P&A costs of their orphaned wells.

Characterization and Analysis of Liquid Waste from Marcellus Shale Gas Development.

Hydraulic fracturing of shale for gas production in Pennsylvania generates large quantities of wastewater, the composition of which has been inadequately characterized. We compiled a unique data set from state-required wastewater generator reports filed in 2009-2011. The resulting data set, comprising 160 samples of flowback, produced water, and drilling wastes, analyzed for 84 different chemicals, is the most comprehensive available to date for Marcellus Shale wastewater. We analyzed the data set using the Kaplan-Meier method to deal with the high prevalence of nondetects for some analytes, and compared wastewater characteristics with permitted effluent limits and ambient monitoring limits and capacity. Major-ion concentrations suggested that most wastewater samples originated from dilution of brines, although some of our samples were more concentrated than any Marcellus brines previously reported. One problematic aspect of this wastewater was the very high concentrations of soluble constituents such as chloride, which are poorly removed by wastewater treatment plants; the vast majority of samples exceeded relevant water quality thresholds, generally by 2-3 orders of magnitude. We also examine the capacity of regional regulatory monitoring to assess and control these risks.

Shale gas development impacts on surface water quality in Pennsylvania.

Concern has been raised in the scientific literature about the environmental implications of extracting natural gas from deep shale formations, and published studies suggest that shale gas development may affect local groundwater quality. The potential for surface water quality degradation has been discussed in prior work, although no empirical analysis of this issue has been published. The potential for large-scale surface water quality degradation has affected regulatory approaches to shale gas development in some US states, despite the dearth of evidence. This paper conducts a large-scale examination of the extent to which shale gas development activities affect surface water quality. Focusing on the Marcellus Shale in Pennsylvania, we estimate the effect of shale gas wells and the release of treated shale gas waste by permitted treatment facilities on observed downstream concentrations of chloride (Cl(-)) and total suspended solids (TSS), controlling for other factors. Results suggest that (i) the treatment of shale gas waste by treatment plants in a watershed raises downstream Cl(-) concentrations but not TSS concentrations, and (ii) the presence of shale gas wells in a watershed raises downstream TSS concentrations but not Cl(-) concentrations. These results can inform future voluntary measures taken by shale gas operators and policy approaches taken by regulators to protect surface water quality as the scale of this economically important activity increases.