What happens when oil and gas resources die? West Virginia has a new plan for that

Copyright © HT Digital Streams Limited All rights reserved. David Uberti, The Wall Street Journal 3 min read 16 Oct 2025, 18:21 IST America is plagued by millions of oil and gas wells that have disappeared over decades. (File photo: Reuters) Summary A privately financed fund aims to extract 20,000 wells at no cost to taxpayers. West Virginia is expected to unveil a potentially first-of-its-kind fund Thursday aimed at one of the thorniest environmental issues plaguing America’s oil and gas-producing regions. The Mountain State Plugging Fund is designed to plug about 20,000 wells over the coming decades at no cost to taxpayers, limiting the chances that old infrastructure will contaminate groundwater or leak planet-warming methane into the air. Diversified Energy, one of America’s largest owners of natural gas wells, said it would plow $70 million into the fund over the next 20 years in hopes of growing that holding to as much as $650 million through compound interest and returns. The company agreed to retire at least 1,500 wells while establishing the fund, and at least 250 annually thereafter. The goal is to continue capping and plugging old oil and gas wells even if Diversified goes out of business. “It was born out of an effort to facilitate economic growth, find high-paying jobs and make sure we don’t just leave a problem to future generations,” said Gov. Patrick Morrisey. State governments have increasingly poured money into decommissioning old wells, while West Virginia and others have drawn massive federal funding to help in recent years. But Morrissey believes this is the first time a company has set up a financial insurance fund for long-term cleanup efforts. “We believe this could set a precedent for other companies to follow,” he said. View Full Image (WSJ) America is plagued by millions of oil and gas wells that have disappeared over decades. But record keeping made precise estimates difficult. Analysts believe that much of that infrastructure continues to pollute nearby areas, while at least tens of thousands of wells have been “orphaned” by companies that have changed ownership or disappeared. Large producers have increasingly faced public backlash and regulatory action in response, with Diversified often near the center of criticism because of its business model. The boom that has turned America into an energy superpower is thanks to drillers boring through shale rock that yields amazing springs of gas. Alabama-based Diversified, on the other hand, is picking up old, conventional wells that can slowly produce the heating and power generation fuel for decades. The company has withdrawn about 200 wells annually across Appalachia in recent years, according to its 2024 Sustainability Report, most of them through a subsidiary focused on cleanup. The third-party company that will manage Diversified’s fund for West Virginia, OneNexus, compared its offerings to life insurance policies for aging wells. “If Diversified sells out in the future, that money stays with the state,” said Rusty Hutson Jr., CEO of Diversified. Retirement costs can range from about $25,000 per well to more than $50,000, Hutson said. Difficult terrain and remote locations can push prices much higher. Diversified operates just a fraction of the wells that dot Appalachia, home to two of America’s most prolific shale formations. Even if companies like his have the money in hand to retire everyone, Hutson said, there isn’t enough capacity to keep up. “We’re talking about 100 years, no matter what,” he said. Write to David Uberti at [email protected] Get all the industry news, banking news and updates on Live Mint. Download the Mint News app to get daily market updates. more topics #Oil and Gas #business news Read next story