MSGID: 1:317/3 6459cc5f   
   PID: hpt/lnx 1.9.0-cur 2019-01-08   
   TID: hpt/lnx 1.9.0-cur 2019-01-08   
    Cleanup of inactive Gulf of Mexico wells estimated at $30 billion    
    Waters off Alabama, Louisiana and Texas are home to 14,000 nonproductive   
   wells    
      
     Date:   
         May 8, 2023   
     Source:   
         University of California - Davis   
     Summary:   
         A new article examines the cost to plug 14,000 wells that are   
         inactive, have not produced for five years and are unlikely to be   
         reactivated in the Gulf of Mexico region, which is the epicenter   
         of U.S. offshore oil and gas operations.   
      
      
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   Wetlands, coastal areas and offshore waters near Alabama, Louisiana   
   and Texas have more inactive oil and gas wells than producing ones,   
   and the cost to permanently plug and abandon them could be $30 billion,   
   University of California, Davis, researchers suggest.   
      
   A paper published today in the journal Nature Energy examines the cost   
   to plug 14,000 wells that are inactive, have not produced for five years   
   and are unlikely to be reactivated in the Gulf of Mexico region, which   
   is the epicenter of U.S. offshore oil and gas operations.   
      
   The wells could pose future environmental and financial risks to the   
   public, and the cost differential for plugging onshore wells versus those   
   in offshore waters is large, said Mark Agerton, an assistant professor   
   at UC Davis and lead author of the paper.   
      
   Leaks from wells closer to shore are more likely to damage coastal   
   ecosystems and release greenhouse gases like methane into the atmosphere,   
   compared to wells in deep waters. The study found that more than 90%   
   of inactive wells are in shallow areas, and the cost to plug those would   
   be $7.6 billion, or 25% of a total $30 billion.   
      
   Informing policy decisions "The wells aren't supposed to be leaking   
   into the environment, but sometimes they do," said Agerton, of the   
   Department of Agricultural and Resource Economics. "How do you get the   
   most environmental benefit for the least amount of money?"  The findings   
   could help states decide cleanup priorities, especially as they access   
   $4.7 billion in federal money authorized by the Infrastructure Investment   
   and Jobs Act. That money is set aside for methane reduction programs,   
   including cleanup of old oil and gas wells, said Gregory Upton, an   
   associate research professor at the Louisiana State University Center   
   for Energy Studies and co-author of the paper.   
      
   "States have a pretty good idea of what it costs to plug these wells   
   on land, but there is really a lot of uncertainty as to what the costs   
   were for these offshore wells," Upton said during a media briefing about   
   the paper.   
      
   Liability for cleaning up wells abandoned in federal waters falls to   
   prior owners if the current owner becomes insolvent and is unable to   
   cover costs.   
      
   Large American oil companies currently own or have owned 88% of the   
   wells in federal Gulf of Mexico waters and would legally shoulder cleanup   
   liabilities before taxpayers, Agerton said.   
      
   But in state waters, each jurisdiction handles liability differently,   
   and prior ownership doesn't come into play. States oversee plugging   
   programs for orphaned wells whose owners have gone bankrupt, though the   
   cost to plug an abandoned offshore well increases with the length of   
   the well and the depth of the water.   
      
   "The bulk of the costs comes from plugging wells in deeper water where   
   the environmental consequences are less than for a shallow well closer   
   to shore," Agerton said. "That money is probably better spent on state   
   waters where they can't go after prior owners for cleanup costs and it's   
   going to be a cheaper cleanup job with more environmental benefit."   
   Siddhartha Narra, Brian Snyder and Gregory B. Upton Jr. of Louisiana   
   State University, are co-authors on the research.   
      
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   ==========================================================================   
   Story Source: Materials provided by   
   University_of_California_-_Davis. Original written by Emily Dooley. Note:   
   Content may be edited for style and length.   
      
      
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   Journal Reference:   
      1. Mark Agerton, Siddhartha Narra, Brian Snyder, Gregory   
      B. Upton. Financial   
         liabilities and environmental implications of unplugged wells for   
         the Gulf of Mexico and coastal waters. Nature Energy, 2023; DOI:   
         10.1038/ s41560-023-01248-1   
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   Link to news story:   
   https://www.sciencedaily.com/releases/2023/05/230508190604.htm   
      
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