by David Jenkins | Nov 4, 2021 | Oil and Gas
Prior to drilling on public land, oil and gas companies must agree to completely clean up, plug, and fully restore drilling sites once they finish with them. Essentially, they must promise to clean up their mess as a condition of the drilling privilege. Unfortunately for us taxpayers, it is a promise that these companies break with increasing frequency. A common practice is for a company to declare bankruptcy and go out of business under the name it is operating under, then start back up as a new entity under a different name, thus shedding all of the financial obligations associated with its former identity. Anytime this happens—or these companies find some other way to skirt their clean-up responsibility—in results in “abandoned” or “orphaned” wells and the clean-up burden shifts to the American taxpayer. The oil and gas companies get all the profit, and leave you and me stuck with the bill. How big is that bill? A new report by CRS projects that we could be on the hook for as much as $13.7 billion for the 96,000 “producible and service” oil and gas wells currently on our federal public lands. And that does not even include the more than 3.2 million wells that the Environmental Protection Agency (EPA) estimates have already been abandoned across our nation. This shirking of responsibility by the oil and gas industry is a chronic problem. The solution, however, is quite simple. Require companies to post reclamation bonds in amounts that are adequate to cover the actual clean-up cost if they break their promise—as is supposedly required by law. That law, 30 U.S.C. §...
