The biggest owner of U.S. oil and gas wells said Thursday it will create a $70 million fund to help plug its abandoned and inactive wells in West Virginia, drawing praise from the state and concern from environmental critics.
Diversified Energy officials said they’ll use the money to pay a subsidiary to plug retired wells, and that the funds would go to the state of West Virginia if the company eventually folds.
West Virginia Gov. Patrick Morrisey (R) and Diversified officials said it was the first agreement of its kind in the country — and that it is backed by a new type of oil and gas insurance. But environmental groups and landowners say Diversified has already faced legal issues for failing to plug wells and that the $70 million fund is not enough to plug the thousands of abandoned wells it owns in the state.
“On the one hand, it’s nice to see some commitment of money,” said Adam Peltz, a director and senior attorney in the Environmental Defense Fund’s Energy Program. “But why aren’t they just plugging their wells?”
