Buried Risk to Opportunity: Abating Methane Through Carbon Finance

Methane,
a greenhouse gas that is 80+ times more potent than carbon dioxide over a
20-year period, has become a critical focus in climate action. While industries
scramble to reduce emissions from active operations, a significant source
remains hidden across the US landscape: orphan oil and gas wells.

Many of these decades-old, neglected
wells
— abandoned by operators that have disappeared or dissolved — silently leak
methane into our atmosphere. With no responsible party to be found, these
“orphans” are a public burden — state, federal and tribal — with an outsized
climate impact. Yet innovative approaches are emerging to transform this
environmental liability into an opportunity for meaningful climate action.

While an estimated 120,000 orphan wells are officially documented, the
Environmental Defense Fund
reports
that the actual number could reach 800,000. Other public research estimates are
even higher.

Over the course of a year, the US Environmental Protection Agency says these
wells release methane 7-20 million metric tons of
CO₂-equivalent
— comparable to emissions from 2 million to 5 million cars during that same
period.

“The data we’ve collected in field measurements of more than 3,000 orphan wells
reveals a much more urgent and complex situation than previously understood,”
explains Staci
Taruscio,
CEO of Rebellion Energy
Solutions
— a carbon-credit project developer. “In parallel with other methane-reduction
efforts,
one way society can accelerate progress in abating fugitive methane emissions is
to direct resources to plugging orphan wells.”

Beyond their climate impact, these wells threaten the 14 million people in the
US who live within one mile of them — potentially exposing communities to
groundwater contamination and physical hazards from deteriorating
infrastructure.

Tackling this challenge requires multiple approaches, each with different
strengths and limitations.

• Public funding: The 2021 Infrastructure Investment and Jobs Act
  allocated $4.7 billion to plug orphan wells. While significant, this
  federal funding — and limited state resources — wouldn’t come close to
  satisfying the need to plug all orphan wells. Also, this structure
  prioritizes wells near population centers rather than those with the highest
  methane emissions. Recent policy changes have also created uncertainty
  around IIJA funding distribution and future federal government support.

• Community-driven initiatives: Organizations blending government support
  with private donations have created localized impact but lack the scale
  needed to address the full scope of the problem. These efforts lack a
  standardization in operational practices that is much needed to quantify
  impact and iterate on future decisions.

• Carbon finance: Private capital through voluntary carbon
  markets
  has emerged as perhaps the most promising scaling mechanism. As the Payne
  Institute for Public Policy
  notes,
  “Plugging orphans offers an attractive climate-mitigation
  activity
  — given critical attributes such as permanence, quantification,
  additionality and benefits to local communities.”

The carbon market approach allows companies to prioritize wells based on their
methane emissions impact along with other location-specific factors, potentially
maximizing climate benefit per dollar invested.

The Packard family cattle ranch in Oklahoma illustrates the transformative
potential of high-integrity carbon
finance.
Their multi-generational ranch was scattered with orphan wells — some alarmingly
close to the family home where children and grandchildren play. These 40+
year-old wells, which had been unattended for more than a decade, posed ongoing
safety and environmental hazards.

With direct engagement from the landowners, Rebellion Energy permanently plugged
these methane-leaking wells through its Heartland Methane Abatement and Land
Restoration
Project,
which in 2024 became the first to generate carbon credits under the American
Carbon Registry‘s orphan-well
methodology.
Rebellion also restored the land to native prairie ecosystem and created a
designated monarch butterfly waystation.

“Our project relied 100 percent on carbon finance, demonstrating the power of
private-sector initiatives to catalyze action where public resources fall
short,” Taruscio says. “By confronting the true scale of the problem and
embracing innovative approaches, we can chart a path toward a sustainable
future.”

The environmental impact has been substantial. That first Heartland project (the
developer now has four) abated CO₂-equivalent emissions comparable to removing
more than 185 million gallons of gasoline consumed, according to EPA
equivalencies, and generated carbon credits independently rated by leading
carbon-ratings agency BeZero
Carbon.

The orphan well crisis represents both a climate imperative and a market
opportunity. As voluntary carbon market standards evolve, projects meeting the
highest verification, additionality, and transparency thresholds are commanding
premium prices from corporate sustainability programs seeking high-impact
climate investments.

Government funding remains essential but insufficient. As the Payne Institute
emphasizes, “Addressing a meaningful portion of these wells will cost tens, if
not hundreds, of billions.”

By leveraging high-integrity carbon finance, forward-thinking companies are
helping solve one of the US’s most persistent environmental challenges while
making measurable progress on climate goals. The result is a powerful example of
how market-based solutions can accelerate environmental restoration and methane
reduction at a scale that would be impossible through public funding alone.

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Published Apr 11, 2025 8am EDT / 5am PDT / 1pm BST / 2pm CEST