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- Graduate School of Public and International Affairs
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When should an aging oil and gas well be decommissioned?
Students at the University of Pittsburgh Graduate School of Public and International Affairs (GSPIA) recently assisted the Pennsylvania Department of Environmental Protection (DEP) with research on the economics and policy challenges of closing aging oil and gas wells in the state. The team presented their findings to the DEP Bureau of Oil and Gas Planning and Program Management and then to the governor’s office before releasing the report.
The collaboration began when GSPIA Associate Professor Jeremy Weber approached the DEP’s Seth Pelepko, director of the bureau and environmental program manager for its division of well plugging and subsurface activities, about working with his capstone class on topics that the office was grappling with. Pelepko and his team were eager to collaborate with Weber’s class to better understand ways to improve governance of low-producing oil or gas wells.
State law requires that well operators fill wells and restore the surrounding area when a well has reached the end of its economically useful life. It is often unclear, however, when a well has reached its end, and operators often have economic incentives to postpone cleanup as long as possible.
Using economic theory and data from a large private well operator, Weber’s team estimated a production threshold below which a gas well is highly likely to be uneconomical. They also provided a review of the regulations that other states and the federal government apply to low-producing wells — a comparison that allowed the DEP to put its regulations into a broader perspective.
“Managing gas wells in Pennsylvania as they near the end of their production life is a critical component of DEP’s regulatory program. The GSPIA capstone project positions the agency to understand better than ever before what constitutes economic production,” Pelepko said. “This kind of information is pivotal for ensuring that responsible operators decommission their wells along an appropriate timeline, thus preventing future growth of DEP’s unfunded plugging liability.”
The GSPIA students also benefitted from the collaboration. Will Fitzgerald, whose research focuses on energy and environment, participated in the course and called it a welcomed pedagogical anomaly.
“The capstone course was a collaborative investigation that required constant questioning, reformulation and critical thinking,” he said. “Through it, I learned how research proceeds as a trail of questions one follows and grew in my ability to pause and recognize when an issue needs to be reexamined, a question needs reframing or the trail has gone cold.”
Weber said he learned a lot too, “I enjoy lecturing, but it is even better to work with students as a team striving toward the common goal of clarifying issues and options for a decision maker. The capstone was a win for everyone involved.”
— Katie Weidenboerner Deppen