Technical Explainer: Orphaned Oil and Gas Well Carbon Credits

The document analyzes the use of the voluntary carbon market (VCM) to finance the plugging of orphaned oil and gas wells in North America to reduce methane emissions. It evaluates four existing methodologies (ACR, BCarbon, CarbonPath, and OCP), noting that while these projects offer strong additionality and significant co-benefits, they face challenges regarding emissions quantification and long-term permanence due to a lack of empirical data on orphaned well behavior. The report provides a risk framework for buyers and developers, highlighting the tension between industry expertise in producing wells and the uncertainty of non-producing, abandoned wellbores.

• Orphaned wells represent a significant climate risk, accounting for up to 6% of methane emissions from abandoned wells in the United States, with over 120,000 documented orphaned wells across the United States and Canada.
• The voluntary carbon market (VCM) has issued approximately 8.3 million credits from 80 projects targeting orphaned wells, though these represent less than 1% of total energy sector credits.
• Orphaned well projects generally demonstrate a strong quality profile regarding additionality and co-benefits, as public funding is insufficient to address the scale of the problem and plugging protects water quality and public safety.
• Emissions quantification is a very common risk with medium severity because there is no market consensus on baseline estimation methods, with approaches varying between flat extrapolation of current leaks, decline curve modeling, and volumetric analysis.
• 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 little to no monitoring beyond 18 months post-plugging.
• The choice of Global Warming Potential (GWP) significantly impacts credit volumes; using GWP20 (which reflects methane's immediate impact) can yield nearly three times more credits than GWP100.
• Carbon rights for orphaned wells are legally ambiguous in the US and Canada, as they may be interpreted as extensions of surface, mineral, or pore rights, requiring developers to secure 'uncontested rights' through contracts.

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} }