The Rising Cost of the Oil Industry’s Slow Death
Unplugged oil and gas wells accelerate climate change, threaten public health and risk hitting taxpayers’ pocketbooks. ProPublica and Capital & Main found that the money set aside to fix the problem falls woefully short of the impending cost.
There is a great hew and cry about the waste from EV production and later disposal… Hold your beer.
By law, companies are responsible for plugging and cleaning up wells. Oil drillers set aside funds called bonds, similar to the security deposit on a rental property, that are refunded once they decommission their wells or, if they walk away without doing that work, are taken by the government to cover the cost.
But an analysis by ProPublica and Capital & Main has found that the money set aside for this cleanup work in the 15 states accounting for nearly all the nation’s oil and gas production covers less than 2% of the projected cost. That shortfall puts taxpayers at risk of picking up the rest of the massive tab to avoid the environmental, economic and public health consequences of aging oil fields.
The estimated cost to plug and remediate those wells if cleanup is left to the government is $151.3 billion, according to the states’ own data. But the actual price tag will almost certainly be higher — perhaps tens of billions of dollars more — because some states don’t fully account for the cost of cleaning up pollution. In addition, regulators have yet to locate many wells whose owners have already walked away without plugging them, known as orphan wells, which states predict will number at least in the hundreds of thousands.m
