(Bloomberg) -- House Democrats opened an inquiry into Diversified Energy Co., the largest owner of US oil and gas wells, warning that the company’s unusual business model poses risks to taxpayers and the global climate.

On Monday, members of the House Energy and Commerce Committee led by New Jersey Democrat Frank Pallone sent a nine-page letter to Diversified Chief Executive Officer Rusty Hutson Jr. requesting documents and information about the company’s methane emissions and business practices. 

Read the full text of the House committee letter here

Diversified specializes in buying old, minimally productive wells and keeping them in operation as long as possible. In the letter, the Democrats said Diversified eventually might walk away from thousands of wells, leaving billions of dollars of cleanup costs to state governments in Pennsylvania, West Virginia, Ohio and Kentucky. Old wells are also prone to leak methane, the main component in natural gas and a powerful contributor to climate change.

“Diversified Energy’s strategy of leaving thousands of marginal wells unplugged for decades and potentially underestimating future cleanup costs could undermine important efforts to fight climate change,” the members wrote. Because Republicans hold the committee majority, the Democrats don’t have the power to issue subpoenas.

Douglas Kris, a senior vice president at Diversified, said in an emailed statement that the company was reviewing the request for information. “Diversified’s actions to equip each well tender with hand-held methane detectors, routinely conduct LiDAR emissions surveys, and vertically integrate well retirement operations are some examples, among many, of how our smarter asset management program drives emissions improvement and operational efficiencies in the assets we responsibly manage,” he said. 

The House letter cites a 2021 Bloomberg Green investigation into the environmental risks of Diversified’s business model, as well as subsequent reports by the Ohio River Valley Institute, an Appalachia-focused organization that advocates for a shift away from fossil fuels.  

Diversified owns about 65,000 wells from Pennsylvania to Texas, far more than any other US company. According to a report commissioned by the Clean Air Task Force based on Environmental Protection Agency estimates, it was the fourth-largest methane emitter among oil and gas producers in 2022, despite being only the 22nd-biggest gas producer. The company is based in Birmingham, Alabama, and shares trade on both the London and New York stock exchanges.

(Adds comment from Diversified in fifth paragraph.)

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