Federal oil and gas bonding levels have not changed since the 1950s and 60s, despite deeper wells and rising reclamation costs
What happens to oil and gas wells on public lands after they are done producing? Those wells are supposed to be reclaimed‚Ää—‚Ääplugged and the area around them cleaned up. Sometimes, though, companies abandon wells, either due to bankruptcy or lack of funds, leaving taxpayers on the hook for that cleanup.
A new study commissioned by the Center for Western Priorities finds that reclaiming oil and gas wells on U.S. public lands could cost a potential $6.1 billion, far exceeding the $162 million in reclamation bonds paid by oil and gas operators, according to the last government estimate. While taxpayers will not have to pay to clean up every well, the analysis underscores the need to update the Interior Department’s outdated bonding requirements.