CHARLESTON, W.Va. — The House of Delegates Energy Committee has passed a bill aimed at plugging thousands of abandoned gas and oil wells in West Virginia.
HB 4090 is similar to a bill the legislature passed last year (HB 2673), but was vetoed by Gov. Jim Justice, who did not like funding structure. Committee Chairman Bill Anderson (R-Wood) said Tuesday changes have been made to this year’s bill to accommodate the governor.
West Virginia has an estimated 4,500 “orphan” gas and oil wells that are unplugged and the companies that operated those wells have gone out of business. The wells are an environmental hazard.
The bill would lower the severance tax on small, non-horizontal wells from five percent to two-and-one half percent. The money raised would be deposited in a special fund to pay for plugging. It is estimated that each well plug costs between $10,000 and $45,000.
The Oil and Gas Abandoned Well Plugging Fund would cap at $6 million. When the fund reaches that amount, the tax would drop to zero until the money is spent. Officials believe that is unlikely to happen since the state Department of Environmental Protection is expected to use the new source of revenue to cap the wells.
The committee approved the bill on a unanimous voice vote after little discussion. It next goes to the House Finance Committee.