Carbon Tracker estimates there are 2.6 million unplugged onshore wells in the United States. (1)
Carbon Tracker estimates that plugging 2.6 million documented onshore U.S. wells will cost $280 billion. (1)
Although oil and gas companies are required to seal their non-producing, unplugged wells, the necessary funds and motivation for plugging them are not always available.
Oil and gas companies frequently opt for bankruptcy as a solution to cope with financial challenges caused by various economic conditions, enabling them to shed both debt and environmental responsibilities.
"Orphaned" wells fall under the control of state regulators. Even though bankrupt operators provide some financial assurance for well closure, the allocated funds are usually inadequate to cover all the expenses for plugging and restoration.
(1) Schuwerk, Rob & Rogers, Greg. (2020) Billion Dollar Orphans: Why millions of oil and gas wells could become wards of the state. Carbon Tracker.
Dry Creek Environmental, LLC is committed to lessening the burdens of government, combatting community deterioration, and promoting environmental preservation by accelerating the closure or repurposing of abandoned oil and gas wells.
The Bipartisan Infrastructure Law directed the Secretary of the Interior to establish programs to inventory and properly close orphaned wells. The Law provides $4.7 billion for orphaned well site plugging, remediation and restoration activities on federal, Tribal, state and private lands.
The crucial question that lingers is: Where will the required funding come from to tackle the full extent of the abandoned well problem?
Donald McGannon
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