Finance & Investment

Buried Risk to Opportunity:
Abating Methane Through Carbon Finance

The orphan well crisis is both a climate imperative and a market opportunity to foster environmental restoration and methane reduction at a scale impossible through public funding alone.

Sponsored Content | / This article is sponsored by Rebellion Energy Solutions | By Christina Robertson | Published 4 days ago | About a 4 minute read

Image: Millions of people in the US live within 1 mile of an orphan oil and gas well, many of which leak methane. | The Orphan Well Cooperative

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.

The scale of the problem

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.

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“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.

3 paths to orphan-well methane abatement

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.

Transforming environmental hazards into climate solutions

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.

Scaling solutions through market innovation

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.