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?
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.