HB 5414
New Oil and Gas Well Plugging Assurance Act
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- Passed House of Delegates
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill, the New Oil and Gas Well Plugging Assurance Act, aims to prevent abandoned oil and gas wells in West Virginia from posing environmental and property risks. It requires new horizontal oil and gas wells, filed for permit after July 1, 2026, to either post a single-well bonding amount or establish an escrow account to cover the cost of plugging the well when production ceases. The bill seeks to address the issue of ‘orphaned’ wells – those without an operator to plug – and protect surface property owners from devaluation and potential groundwater contamination.
Key provisions
- Requires new horizontal oil and gas wells to have a single-well bonding amount or an escrow account established.
- The bonding amount is determined by the Chief of the Office of Oil and Gas.
- Escrow accounts must be held by a federally insured bank.
- Payments into escrow accounts are based on estimated production, plugging costs, and inflation.
- Earnings from escrow accounts are to be used for plugging costs.
- Failure to comply with the bill can result in forfeited bonding amounts.
- The State Treasurer can propose rules to implement the bill.
- The bill does not affect existing wells.
Who is affected
- Oil and gas operators
- Surface property owners
- The Office of Oil and Gas
- The State Treasurer’s Office
- West Virginia residents
Notable changes
- Introduces a requirement for plugging assurance for new horizontal wells, which has historically relied on blanket bonds.
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