Thousands of abandoned oil wells dot the Permian Basin in west Texas and New Mexico, endangering humans and wildlife. With oil costs plummeting, they’re likely to proliferate. A growing body of research suggests that these sorts of leaks make oil and gas wells significant contributors to climate change – especially if they’re not plugged. Leaking wells also have the potential to poison sources of drinking water.
Oil companies are legally required to “plug” their abandoned wells to prevent exactly these sorts of hazards. Drilling a well involves puncturing through layers of dirt, rock, and water to reach oil and gas deposits. The walls of the well are reinforced with steel casing and cement, but as they age – or if they were improperly drilled – cracks may form in the cement and the casings could corrode. This increases the risk of methane seeping into the air and oil migrating into the surrounding groundwater. For this reason, an operator is supposed to plug a spent well by pouring concrete into the well and also clean up the surrounding area by removing wellheads, tanks, pipes and other unused equipment that could endanger humans or wildlife.
Texas and New Mexico have already identified about 7,000 abandoned wells. State officials estimate these will cost $335m to plug. The states define wells as “orphaned” if they don’t have an approved operator on record; additionally, Texas only includes wells that haven’t produced in at least a year. However, a healthy chunk of roughly 100,000 “idled” wells in those states could also eventually end up abandoned.
While officials have argued that oil prices will eventually rise, reviving inactive wells, environmental advocates and energy analysts say that the industry is in a downward spiral that will cause the number of abandoned wells to balloon. The uncertain outlook means that independent estimates of the cleanup costs of Texas’s wells alone have ranged from a conservative $168m to a mind-boggling $117bn.
States have not collected nearly enough money from operators to foot the bill. Though they force oil and gas producers to front substantial cash to cover plugging costs in case their wells are abandoned, these bonds only covered one-sixth of Texas’s cleanup costs in 2015. In New Mexico, these bonds would cover just 18% of plugging costs for all of the state’s orphan wells.