Old, unplugged wells in Gulf
Study puts cleanup costs of over 14,000 sites, some still owned by oil giants, at $30B
Ever since the first offshore platforms went up off Louisiana 85 years ago, the Gulf of Mexico has been an oil and gas juggernaut. But decades of drilling have left behind more than 14,000 old, unplugged wells at risk of springing dangerous leaks and spills that may cost more than $30 billion to plug, a new study has found.
Nonproducing wells that haven’t been plugged now outnumber active wells in the Gulf, the study said.
The researchers also found that, in federal waters, nearly 90% of the old wells were owned at some point in the past by giant oil companies known as the “supermajors,” including BP, Shell, Chevron and Exxon. Under federal law, that means those companies would still be responsible for cleanup costs, even though they might have sold the wells in the past, the study’s authors said.
Oil and gas companies are responsible under federal and state rules for securely plugging wells that are no longer in service. In the boom-and-bust world of oil and gas drilling, though, operators frequently go bankrupt, leaving wells orphaned and unplugged, and taxpayers on the hook.
That raises risks that oil and other pollutants will leak into the ocean and travel to shore and smother wetlands, particularly sensitive salt marshes along the northern Gulf Coast. Wells that aren’t properly plugged with concrete can also leak significant amounts of methane, a potent greenhouse gas that contributes to climate change and its increasingly catastrophic consequences.
Orphaned oil and gas wells are a big issue onshore too.
“But offshore is a different beast, particularly in terms of the costs involved,” said Mark Agerton, an expert in energy economics at the University of California at Davis, who is one of the study’s authors. “The wells are bigger, and they’re just a lot more expensive. You can’t just drive a truck up to it.”
The $1 trillion infrastructure bill that President Joe Biden signed into law in 2021 sets aside $4.7 billion to plug orphaned wells, both onshore and off.
Still, in federal waters, the government can hold prior owners of wells liable for plugging them, even if the current owners go under or otherwise don’t fulfill their cleanup obligations. Of the wells under federal jurisdiction, 87% were once owned by one of the supermajors, many of which have recently booked record profits.
“So for federal waters, these companies with deep pockets would be on the hook,” Agerton said.
The companies named in the report did not respond to requests for comment.
It makes sense for public funds to prioritize plugging wells in state waters, where no such provision exists. Wells in state waters also tend to be in shallower locations, which make them cheaper to plug.
In the Gulf, the abandoned wells, platforms and pipelines have also become increasingly vulnerable to extreme weather linked to global warming. When Hurricane Ida hit the Louisiana coast with winds of nearly 150 mph in August 2021, it set off a flurry of oil spills detectable from space.
The latest analysis focused on offshore wells, scrutinizing data on wells in the Gulf of Mexico, including those in federal offshore and state waters of Texas, Louisiana and Alabama.