The American Carbon Registry (ACR), a nonprofit enterprise of Winrock International, announces the development of a Methodology for the Quantification, Monitoring, Reporting and Verification of Greenhouse Gas (GHG) Emissions Reductions from the Plugging Abandoned & Orphaned Oil and Gas (AOOG) Wells.  This first of a kind methodology, developed by ACR in partnership with Dr. Mary Kang of McGill University and with the support of industry partners, provides the eligibility requirements and accounting framework for the creation of carbon offset credits from the reduction in methane emissions by plugging AOOG wells.

Oil and gas wells are often inactive for years prior to undergoing plugging. The maximum length of time that a well can be idle varies by jurisdiction and wells that may never be productive again can remain unplugged for years or decades. Well testing and maintenance requirements are not uniform, and this can lead to deterioration, methane emissions, and groundwater contamination.

The US Environmental Protection Agency (EPA) estimates that there are 2.3 to 3.2 million AOOG wells in the U.S.  that emit 280,000 metric tons (MT) of methane per year, though few of these wells have been tested for emissions. Since methane is approximately 30 times more potent than carbon dioxide (CO₂) over a 100-year period, this equates almost 8 million MT CO₂ equivalent per year. Several studies report that methane emissions from these wells are likely underestimated due to uncertainty in the total population of AOOG wells and associated emissions.

The proper plugging and remediation of all the AOOG wells in the U.S. and Canada represents a huge financial burden. While state and provincial regulations require some financial assurance through bonds, reports show that bonding amounts are insufficient to cover plugging documented wells.  Estimates for plugging costs range from US$24 billion to plug and remediate 500,000 wells and up to US$435 billion to address existing documented AOOG wells. The remaining undocumented wells represent additional financial and logistical challenges.

The ACR Methodology provides a framework for the quantification, monitoring, reporting and verification of GHG gas emission reductions associated with plugging of AOOG wells in the U.S. and Canada by creating an incentive pathway for carbon markets to help finance this activity.

The public stakeholder consultation period is now closed.