Cost to Secure Inactive Offshore Oil and Gas Wells in US Gulf of Mexico May Reach $30 Billion

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Securing 14,000 unplugged oil and gas wells in the US Gulf of Mexico could cost more than $30 billion, according to a recent study published in the journal Nature Energy. The research found that 90% of the inactive wells were in shallower waters closer to shore, but they accounted for only a quarter of the $30 billion in plugging costs. Co-author Gregory Upton suggested that the policy implication would be to focus on those shallow wells. Researchers identified some 13,000 idle wells in shallow waters close to the shore, either in the state waters of Texas, Louisiana, and Alabama or in federal jurisdiction. 

Plugging and abandoning the wells is a process that includes encasing the opening in concrete to stop oil and the potent greenhouse gas methane from leaking out. The study also found that oil leaks from shallow wells would be more likely to pose a threat to coastal habitats than those from deeper wells. Mark Agerton, lead author of the study, stated that both taxpayers and fossil fuel giants would likely be liable for the costs of plugging and abandoning the wells.

In federal waters, where nearly 90% of the wells had at one point been owned by “supermajor” companies like Chevron, Shell, ExxonMobil, ConocoPhillips, BP, Total and Eni, the vast majority of costs would be incurred. The research noted that much of what is known about the environmental impacts of oil and gas spills at different depths comes from the 2010 Deepwater Horizon explosion in the Gulf of Mexico, which was one of the worst environmental disasters in US history. 

The study concluded that before a taxpayer is liable for a well, a large oil and gas firm would be liable. Under US laws, the costs for plugging wells in state waters are more likely to fall on the taxpayer, while in federal waters, it is often the current or even previous owner that is liable. The authors suggested that with new government funding available for plugging old fossil fuel wells, the focus should be on offshore sites, which are relatively more costly and complicated to secure than those on land. 

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