When people think about Appalachia, they probably think about
forests and mountains, and maybe they also
think about coal mines. But when you go there, you
see that there's actually also gas wells all over the place, the whole region is covered in gas wells. In many cases, these marginal wells, they're actually a lot dirtier than coal because so much of the methane that comes out of these wells is
actually escaping into the air rather than going into a pipeline. And so, we kind of got interested
in asking the question, well, who owns these wells? We realized this company,
Diversified Energy, owns far more wells than
anyone else in Appalachia. Diversified says it
owns over 60,000 wells. That makes it the biggest
well owner in America, beating out Exxon, beating out Chevron. The fact that this one
company was buying up so many of these wells across Appalachia kind of piqued our curiosity. And so, we decided to go
out into the mountains and see for ourselves what was
going on in all these wells. So, as an energy reporter, when we think of methane emissions, a lot of times we think
about what's going on in the Permian Basin in West Texas, which is where we have a
lot of this new production where you see a lot of
the new methane emissions. Methane is a greenhouse gas, and it's also the main
component of natural gas. And it's a particular problem because if you have the same amount of methane and the same amount of carbon dioxide, when both rise up into the atmosphere, methane has a far greater
warming potential. And scientists think that about a quarter of all
the human-caused warming that we've experienced to date is because of methane emissions by humans. If you think of the U.S. as having somewhere around 1 million
active oil and gas wells today, about three quarters of them are marginal or stripper wells, these tiny producers. In many cases, they're just kind of like these old rusted pieces of equipment. And what the research shows is that these types of wells are
actually a pretty big contributor to the methane problem, because they're far more
likely to have leaks, they're not super well-maintained. Most of the big companies you've heard of in the oil business, Exxon and Chevron, they don't want to be
owning a bunch of old wells in the middle of nowhere that
were drilled in the 1960s. But it turns out, that
there's this one company that has the exact opposite approach. They've bought up, essentially, all the old wells they can get. Diversified Energy, they just
became a huge, huge player. And it's a company that not only most Americans haven't heard of, but even people who are in
the oil and gas industry in Houston have not heard of before. We'd read all this research that shows these marginal wells can actually be major
contributors to climate change. And so, we were curious about whether Diversified Energy's
wells were among those that might have leaks in them. So, we decided to go to
Appalachia and see for ourselves. We didn't have permission from the company to visit any of their
sites on private land so we focused on sites
that were on public land, so, state game lands, national
forests, places like that. It required a lot of hiking. A lot of the places the
weeds were, you know, up to our waist or higher, you were just kind of hoping you were going in the right direction. Definitely should have brought a machete. We are not a professional methane hunters. And so, Rachel actually took a course and got certified as an Optical
Gas Imaging Thermographer. Methane emissions are
invisible to the human eye, it's not something that
you can go out and see. And there are these cameras that allow the operator to see methane. We can go into the high sensitivity mode then you can really see it. And then, we also got a sniffer device that can actually test the
air and identify methane. So, the first day, we
started in Pennsylvania and we drove as close as we could to the lat and long of the first well. We hiked probably about 20 minutes until we came to the well. You can see here that there is
a leak that we're looking at. So, the very first well
that we went to was leaking. And then, we went to our second well, which was on the same patch of game land, that one was also emitting methane. Right about here. I think we went to six or seven wells before we found one that didn't have a emissions significant enough to set off the gas detector. In a few of the cases
where we found emissions, those emissions may have been part of the normal operating of the
well, rather than a leak. But in the vast majority
of cases we found, it was unintentional leaking. Day two was Ohio. It was pretty wild. It was kind of like one of those movies where the adventurers are
going through a jungle and suddenly they
uncover some kind of like evidence of a lost civilization. There was just vines and
growth covering everything. In Ohio, we also saw
wells that were leaking probably the same rate as the ones that were leaking in Pennsylvania. You can see at this joint, just moisture from the dew this morning
is bubbling for some reason. That alarm means that we've
reached the point of 10% of the amount of methane it would
take to be able to ignite. So, clearly there's a leak here. And then, the third day
we went to West Virginia West Virginia is very
difficult topography. We'd get out there and we
would walk for like two hours, trying to figure out where the trail is and losing it, and then finding it again. Zach? Zach? I'm up here, up this way, guys.
Oh, that's really back here. So, the air right down there is almost enough to light on fire. I was pretty surprised. I guess I was anticipating that maybe fewer were emitting than weren't. And what we found was
that, that wasn't the case. In all, about 60% of
the 44 wells we visited did have methane emissions
significant enough to set off the gas detector. So, after our trip, we told
Diversified what we'd found. They said that you couldn't
draw many conclusions from visits to just 44
wells, considering all of the thousands and thousands
of wells that they own. And they also said that, in some cases, the problems we were seeing
were because of previous owners that had been neglecting the wells, and that they had acquired
these wells only recently. Diversified said it
actually sent people out to all the wells that we told them about. And they were able to find all the leaks and fix them relatively
quickly and cheaply for about 90 bucks on average. And, Diversified says a lot of the leaks they found were pretty small. And it's true, you can't
tell from the camera, or the gas detector, how
much methane is leaking out. You can just tell that some is. So, while we were in Appalachia,
we tried to figure out how much methane was
leaking out of a few wells. We were able to go out in the
field with Amy Townsend-Small, who's a professor at the
University of Cincinnati, and she has a device that can actually quantify methane emissions. The first step is to
find if there are leaks at a marginal well, and then, if there's a
certain level of methane, we can measure the emission
rate with a Hi-Flow Sampler. In my head, I thought of
this like big, fancy machine. It's this weird, like
kind of metal contraption with these tubes coming out of it. Like, one of the main parts is just like the same kind of hose that you
have on your vacuum cleaner. Now what does it say? 3.4. Okay. We take her to three of the wells we had been to the previous day. There's another big leak
right there, you're right. Wow. Good job, you guys. It was interesting after three days of seeing these leaks to
have some sort of context as to how big they were. One of the wells we went to, it was barely producing any gas at all. Last year, it produced 8,000
cubic feet for the entire year, which is nothing. The leak rate that she
calculated there was actually 600% of that 8,000 cubic feet. The wells that we measured
today are representative of most of the wells in America. They're not just a problem
for greenhouse gas emissions, they're a potential health
hazard and a explosion hazard. If they're leaking more
than they're producing, especially, they need to be plugged. When the well is no longer productive, you need to plug it, you
need to pour some cement down there to inactivate it. And that can cost anywhere
from 10 to 25,000 to, you know, upwards of a
hundred thousand dollars. So, owning a bunch of old wells, it looks like this huge
amount of liabilities. But we realized doing research that what this company Diversified did is kind of turned that on its head. Diversified Energy, they
promote this idea of what they call Smarter Asset Management. Basically, they say that they
can run these wells longer, cheaper, and better than other companies. Their whole business strategy
is essentially to say, we're gonna be able to just kind of keep pumping gas out of
these wells for a long time before we ever have to
think about plugging them. And the climate angle to that is that the longer you wait before plugging wells that really ought to be plugged, the more methane is gonna
be escaping into the air. Now, regulators have been pretty alarmed to see this happening. So, in 2018, the Pennsylvania Department
of Environmental Protection ordered a subsidiary of Diversified called Alliance Petroleum to
plug several hundred wells. A few weeks later,
Diversified appeals that order and says that they disagree
with some of the conclusions that the state had reached
surrounding well plugging. They ended up kind of cutting
this deal with Diversified that actually doesn't require them to plug hardly any wells at all. They only have to plug 20
a year in Pennsylvania, for instance, even though
they own 20,000 wells, so, do the math, it'll
take them a thousand years to plug all these wells. But the regulators are
in a very tough position. It's almost like they made a
too big to fail oil company. A failure of Diversified
would be a disaster for the state budgets of Pennsylvania, Ohio, and West Virginia because all of a sudden they would inherit this huge amount of liabilities of all these old wells that they
don't have the money to plug. Now, it's important to say that Diversified has been very clear that they don't think this is a problem. They'll generate enough
profit from oil and gas to eventually plug all these wells and there's nothing to worry about. At the end of the day, what we're really focused on is our commitment to our shareholders, making sure that we're growing the company in a very safe way. What Diversified has told
its investors is that the company is trying to replicate what it's done in Appalachia in Louisiana, perhaps in Texas. I think it'll be interesting to see whether the states down
here do anything differently than the states in Appalachia, where Diversified was able to extend these plugging agreements. To the extent that
lawmakers are thinking about this stuff at all, they're thinking about, what are we doing to
properly regulate frack wells that are producing vast amounts of gas? What they're not so much
thinking about is, you know, there's this other problem
with all these wells that have been around a long time. There was one well that
we visited in Pennsylvania that kind of sums up the
whole situation in a way. We had kind of made it
through like the trees into this little clearing,
but we couldn't see anything. And we were getting ready to call it, and we see just like the
bones of this really old well, it was yellow, but pretty rusty. This is a well that, as far as we know, last produced any gas
for sale back in 1998. It's not even hooked up
to a pipeline anymore, it's just basically a pipe
sticking out of the ground. I turned on the camera and booted it up, and you could see that there was methane coming out of that open pipe. And it was strange 'cause there were like these two hotspots inside. After a while, we could see that they were two bees inside the pipe. Aw, a little bumblebee. This is a well that even
Diversified doesn't think that they can get it to produce. So, it's on the list to be
plugged, but in Pennsylvania, Diversified only has to
plug 20 wells per year. And so, this well, like
thousands of others, are just kind of waiting
around for their turn to come. And this well's turn hasn't come yet.
Did they go back to the wells that they checked initially? If the company says that they fixed them, and those were ones that were on the roster to be fixed, along with other new wells. Then shouldn't you go back and see if they were truly fixed?
Another great example of profit before the environment. We are so screwed. If you live in these states lobby your politicians to force this company to fix it’s mess.