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States Turn Abandoned Wells Into Clean Energy Assets

Financial Times Companies •
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Texas, New Mexico, Alabama and Pennsylvania have enacted or are advancing bills that let abandoned oil and gas wells be converted to clean‑energy uses such as geothermal power, underground storage and carbon capture.

The EPA counts 4 million abandoned wells nationwide, with the IOGCC identifying 141,000 orphan wells that have no responsible owner. A 2022 study found those wells released 200,000 tonnes of methane — equal to the CO₂ output of 1.3 million cars — and 14 million Americans live within a mile of a documented orphan well, exposing them to benzene and groundwater contamination.

The Biden‑era Infrastructure Investment and Jobs Act earmarked $4.7bn for plugging, yet the average cost to seal a well is $40,000 and can reach $250,000. Oklahoma alone faces a 200‑year backlog despite receiving one of the largest federal allocations, prompting lawmakers to bet on private‑sector repurposing instead of waiting for taxpayer funds.

Start‑ups like Gradient Geothermal are testing the economics: a pilot in Pierce, Colorado could cost $11mn before incentives and save roughly $200,000 a year in heating costs. The non‑profit Well Done Foundation has already plugged 120 orphan wells, showing that a mix of legislation, market incentives and philanthropy can chip away at the problem.