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(Alliance News) - Diversified Energy Co PLC on Wednesday responded to a congressional inquiry into its energy production practices, claiming that it takes a responsible approach to well maintenance and retirement.
Diversified, the largest owner of US oil and gas wells in the country, received a letter in December from four members of the United States House of Representatives Committee on Energy and Commerce.
The letter requested information regarding the company's well retirement and emissions practices, expressing concern over the company's purchase of "a substantial share of the country's ageing oil and gas wells".
A significant portion of the 70,000 oil and gas wells under Diversified's control are so-called "marginal wells", which the committee's letter claimed are "notoriously expensive and difficult to maintain".
The letter said that Diversified's underestimation of the clean-up costs for these wells could result in "thousands of orphaned, methane-leaking wells and undermine efforts to respond to the worsening climate crisis". It added that this risks deferring billions in environmental liabilities and clean-up costs onto state governments.
On Wednesday, Diversified issued a letter in response, stating that it remains "committed to the responsible retirement of our end-of-life wells".
In terms of cost, the company said that it was able to retire 100 wells in the six months ended June 30 at an average cost of USD25,000. Diversified said that it achieves this low cost by performing "a large majority" of well-retirement work itself.
Regarding the specific standards to which it adheres in well-retirement, a key area of concern in the letter, Diversified said that it undertakes retirement work "in accordance with applicable state regulations and the associated permits with the respective states".
The group claimed that its "Smarter Asset Management" program is focused on "effective leak detection and reduction", supplemented by "an extensive number of physical inspections for our wells". It said that the inspection rate depended on "the well’s production level and relevant
regulatory guidance", but did not provide an exact figure. In 2023, the group said that it completed two or more leak inspections on practically all of its producing well sites.
It defended its investment in "ageing energy infrastructure", stating that it employs "industry standard practices for the operation, inspections, maintenance, and retirement of our wells". The group said that its "stewardship business model" encourages the optimisation of well productivity and the creation of economies of scale.
The group also noted its achievements in emissions monitoring, which earned it a gold standard pathway rating from the United Nations Oil & Gas Methane Partnership.
Diversified ended its response by stating: "We are an important part of the solution for economic growth and emissions reduction, and we remain committed to the responsible ownership and operation of existing energy infrastructure."
Shares in Diversified were down 1.9% at 1,127.50 pence each in London on Wednesday.
By Hugh Cameron, Alliance News reporter
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