Tuesday, October 20, 2015

Oil and gas bust leaving states and taxpayers to foot bills to plug abandoned wells

When the oil and gas boom goes bust and companies leave town, the state—and taxpayers—are often left to foot the bill for cleanup costs of abandoned wells, Stephanie Joyce reports for NPR. "Companies put up bonds to cover their cleanup costs in the event they go bankrupt. But the bonds they pay upfront are almost never enough. Right now, companies only have to pay $75,000 for all of their wells on private land in Wyoming."

The methane industry collapse in Wyoming left the state with 4,000 abandoned wells, Joyce writes. Jeff Campbell and Jeff Gillum of the Wyoming Oil and Gas Conservation Commission are in charge of making sure the abandoned wells get cleaned up and plugged. But first, Gillum says, they have to find them."

"Workers begin the plugging process with bentonite, a kind of super absorbent clay that gets poured down the well to seal it," Joyce writes. "Once the bottom of the well is filled with bentonite, a cement crew comes in and then, a pipe cutting crew. Campbell, who said it takes 20 workers to plug a hole, told Joyce, "It's a lot more work than a lot of people realize." It's also costly, amounting to about $10,000 apiece to plug. With "so many orphaned wells, it could cost up to $30 million over the next decade to clean them all up."

But $10,000 is small change to fill the shallow holes compared to much steeper costs anticipated to fill deeper oil and gas wells recently drilled when that business goes bust, Joyce writes. "These deeper wells will cost tens of thousands of dollars each to clean up." (Read more)

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