Diversified Energy Faces Regulatory Challenges Over Allegedly Abandoned Crypto Mining Site in Pennsylvania
Elk County, Pennsylvania – Diversified Energy, a company primarily known for its acquisition and operation of low-producing natural gas wells, is currently facing regulatory scrutiny and public backlash following accusations that it abandoned a cryptocurrency mining site in rural Pennsylvania without fulfilling environmental obligations. The controversy has placed the company at the center of a broader national conversation about the intersection of crypto mining and energy regulation.
The Longhorn Pad A Controversy
The site at the heart of the dispute is Longhorn Pad A, located in Horton Township, Elk County. Once a dormant natural gas extraction pad, it was reactivated in 2022 after nearly a decade of inactivity—not to resume traditional energy production, but to power cryptocurrency mining computers using natural gas from previously idled wells.
However, problems emerged quickly. The operation was launched without an air quality permit from the Pennsylvania Department of Environmental Protection (DEP), a clear violation of regulatory procedures. Although Diversified Energy was later granted the necessary air permit in December 2023, a follow-up inspection in March 2025 revealed that the site’s mining infrastructure—including tanks and generators—had already been dismantled and removed without prior notice to local officials or the DEP.
The DEP responded by issuing a formal Notice of Violation (NOV), citing the improper abandonment of natural gas wells and the absence of required environmental closure procedures. Diversified Energy, for its part, denied that it had abandoned the site, suggesting that gas production might resume and that the removal of equipment was not indicative of a permanent shutdown. Despite the company’s claims, DEP regulators and environmental advocates argue that Diversified has failed to meet its obligations under state law and prior agreements.
Unfulfilled Closure Commitments
The Longhorn Pad A case gains further gravity in light of a 2021 agreement Diversified signed with Pennsylvania regulators. Under the terms of that agreement, the company committed to properly decommission and plug the Longhorn Pad A well, along with 13 other aging wells, at the end of their productive lives.
That commitment, according to regulators and watchdog groups, remains unfulfilled.
“This isn’t just about one pad or one company—it’s about an entire pattern of regulatory evasion that places the burden of cleanup on taxpayers,” said an anonymous DEP official familiar with the case.
Indeed, the financial stakes are high. Plugging a single well in Pennsylvania can cost more than $100,000. With over 350,000 orphaned and abandoned wells already scattered across the state, the potential cleanup liabilities are staggering.
A Business Model Under Fire
Environmental groups have long been critical of Diversified’s business model. The company has acquired tens of thousands of old and low-yield wells across Appalachia, betting that small residual volumes of gas can be profitably extracted—especially when paired with off-grid applications like cryptocurrency mining.
However, critics argue that this model is unsustainable and socially irresponsible, especially when there are no clear and enforceable plans for decommissioning wells at the end of their usefulness. A 2022 report described Diversified’s strategy as a “business model designed to fail Appalachia,” warning that the public would likely bear the financial cost of remediating unsealed wells.
Although Diversified recently reached a separate legal settlement agreeing to plug 3,000 wells by 2034, that effort is widely seen as insufficient given the scale of the problem and the company’s ongoing expansion into new ventures like crypto mining.
Local Officials Left in the Dark
Compounding community frustrations is the lack of communication from Diversified Energy to local government officials. Horton Township officials reported that they were never informed of the equipment removal or the company’s future plans for the Longhorn site.
“All we know is that the property looks like it’s been abandoned,” said PJ Piccirillo, a local township supervisor. “The generators and tanks were taken out without any notification. If they plan to come back, they haven’t told us.”
The incident has heightened tensions between local municipalities and companies leveraging rural infrastructure for crypto mining, especially when such operations skirt local oversight.
Crypto Mining Faces Broader Resistance Across the U.S.
The Longhorn Pad A controversy is not an isolated incident. Across the United States, municipalities are taking a harder stance against cryptocurrency mining operations, especially those that create environmental noise, air pollution, or energy strain on local grids.
On April 25, the Vilonia Planning Commission in Arkansas unanimously rejected a proposal to establish a crypto mining facility within city limits. The move followed strong opposition from local residents concerned about noise, pollution, and energy consumption.
Earlier this year, Arkansas legislators introduced a bill that would ban crypto mining operations within 30 miles of any U.S. military facility. The proposal was driven by both national security concerns and community complaints about unregulated facilities operating in remote or economically vulnerable areas.
In October 2024, residents of Granbury, Texas, filed a lawsuit against Marathon Digital Holdings, one of the largest crypto mining companies in the country. The plaintiffs cited “unbearable noise pollution” from Marathon’s mining rigs, which operate 24/7 and, according to residents, have disrupted their daily lives and lowered property values.
The Regulatory Road Ahead
As cryptocurrency mining continues to attract both corporate investment and community resistance, regulators are finding themselves in a difficult position—balancing the economic potential of digital asset industries with the environmental and social costs they impose.
In the case of Diversified Energy, the Pennsylvania DEP is reportedly considering further enforcement actions. Meanwhile, the U.S. House Committee on Energy and Commerce has launched a broader investigation into the environmental impact of crypto mining, with Diversified among the companies under review.
“We are concerned not just about the abandoned sites, but about the precedent being set for how extractive industries can pivot to new technologies without being held accountable for old obligations,” said a congressional aide involved in the inquiry.
For residents of Horton Township and other affected communities, the hope is that regulators will step in before more sites are abandoned—and before more taxpayer dollars are spent cleaning up after private profits.
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Conclusion
The case of Diversified Energy and Longhorn Pad A illustrates the complex and often contentious intersection of legacy fossil fuel infrastructure and emerging technologies like cryptocurrency mining. Without comprehensive oversight and enforceable closure plans, these operations risk leaving behind environmental damage and financial liabilities that communities cannot afford to bear.
As the crypto mining industry continues to evolve, it will need to do so within a framework of accountability and sustainability—or risk losing public trust entirely.