The Price to Plug an Old Well in the Gulf of Mexico?  $30 Billion, Study Says.

Since first offshore platform rising from Louisiana 85 years ago, the Gulf of Mexico has become an oil and gas giant. But decades of drilling have left more than 14,000 old wells disconnected from resources at risk of hazardous leaks and spills that may cost more than $30 billion to shut down. a new study has found. Non-producing wells that have not been capped now outnumber active wells in the bay, the study said.

Researchers also found that, in federal waters, nearly 90 percent of old wells were owned at some point in the past by oil giants known as “supermajors,” including BP, Shell, Chevron, and Exxon. Under federal law, that means the companies are still liable for cleanup fees, even though they may have sold the well in the past, the study authors said.

Oil and gas companies are responsible under federal and state regulations for plugging wells that are no longer operating safely. Yet, in the boom-and-bust world of oil and gas drilling, operators often go bankrupt, leaving wells orphaned and uprooted, and the taxpayer hanging on edge.

That raises the risk that oil and other pollutants will leak into the sea and wash off onto beaches and cover wetlands, especially the sensitive salt marshes along the northern Gulf Coast. Wells that are not properly plugged with concrete can also leak significant amounts of methane, a potent greenhouse gas that contributes to climate change and its worsening consequences.

Orphaned oil and gas wells are also a big problem on land. “But offshore is a different animal, especially in terms of cost,” said Mark Agerton, an energy economist at the University of California, Davis, who was one of the study's authors. “The well is bigger, and the price is much more expensive. You can't just drive a truck over there.”

The $1 trillion infrastructure bill that President Biden signed into law in 2021 sets aside $4.7 billion to plug orphaned wells, both onshore and offshore. It was a sizable amount, but not enough to cover the orphanage's stash.

However, in federal waters, the government can hold the previous owner of the well liable for clogging it, even if the current owner goes bankrupt or does not fulfill their cleanup obligations. Eighty-seven percent of wells under federal jurisdiction were once owned by one of the supermajors, many of which have recently posted large profits.

“So for federal waters, these deep-pocketed companies are going to be on the rocks,” said Dr. Agerton. “There's someone to chase”

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 there is no such provision. Wells in state waters also tend to be in shallower locations, which makes them less expensive to install. Any pollution from wells closer to shore has a higher chance of reaching the coast and wreaking havoc on the coastal environment, so plugging those shallower wells becomes all the more urgent.

Even as the world begins to shift away from coal, oil and gas towards renewable energy, decades of mining and drilling in almost every corner of the world, including in the oceans, have left the need for immense plugging and cleanup efforts.

In bays, abandoned wells, platforms and pipelines are also becoming increasingly vulnerable to the extremes of weather associated with global warming. When Hurricane Ida hit the Louisiana coast with winds of nearly 150 miles per hour in August 2021, it triggered an oil spill detected from space.

The latest analysis focuses on offshore wells, examining well data in the Gulf of Mexico, including those in offshore federal and state waters of Texas, Louisiana, and Alabama. It was published Monday in the journal Nature Energy.