Technical Explainer: Orphaned Oil and Gas Well Carbon Credits

This technical explainer by RMI analyzes the use of voluntary carbon markets (VCM) to finance the plugging of orphaned oil and gas wells in the United States and Canada. It evaluates the methodologies used to generate carbon credits, the associated quality risks—particularly regarding emissions quantification and permanence—and the systemic regulatory failures that lead to the proliferation of orphaned wells.

• The voluntary carbon market (VCM) has issued approximately 8.3 million credits from 80 projects aimed at plugging orphaned oil and gas wells in the United States and Canada.
• Orphaned wells represent a significant climate risk, accounting for up to 6% of methane emissions from abandoned wells in the U.S., with methane being 80 times more potent than carbon dioxide over a 12-year atmospheric lifespan.
• Systemic regulatory failures contribute to the orphaned well problem, including fragmented recordkeeping—exemplified by Pennsylvania, where only 30,000 of an estimated 700,000 orphaned wells were documented by 2025—and inadequate government funding and bonding requirements.
• There is no market consensus on baseline methane emission estimation, with methodologies varying between flat extrapolation of current leaks, 'potential to emit' approaches using terminal decline rates, and decline curve analysis based on production history.
• Permanence is rated as a medium-severity risk because there is limited empirical data on the long-term durability of cement plugs, and most current methodologies require minimal monitoring beyond 12–18 months post-plugging.
• Orphaned well projects generally show a strong case for additionality due to the vast scale of the problem and insufficient public funding, though buyers are advised to verify that targeted wells are not already prioritized for government plugging.
• Carbon rights for orphaned wells are complex and legally ambiguous in the U.S. and Canada, as they may be interpreted as extensions of surface, mineral, or pore rights, necessitating clear contracts with landowners and regulators.

APA

RMI (2026). Technical Explainer: Orphaned Oil and Gas Well Carbon Credits. https://rmi.org/resources/technical-explainer-orphaned-oil-and-gas-well-carbon-credits/

Chicago

RMI. Technical Explainer: Orphaned Oil and Gas Well Carbon Credits. 2026. https://rmi.org/resources/technical-explainer-orphaned-oil-and-gas-well-carbon-credits/.

Wikipedia

{{cite report |author=RMI |title=Technical Explainer: Orphaned Oil and Gas Well Carbon Credits |date=31 March 2026 |url=https://rmi.org/resources/technical-explainer-orphaned-oil-and-gas-well-carbon-credits/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2026technical, author = {{RMI}}, title = {{Technical Explainer: Orphaned Oil and Gas Well Carbon Credits}}, institution = {RMI}, year = {2026}, month = mar, url = {https://rmi.org/resources/technical-explainer-orphaned-oil-and-gas-well-carbon-credits/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }