Attention all oil and gas enthusiasts! Did you know that there are over 14,000 uncapped wells along the Gulf of Mexico coast? That’s right, these wells aren’t producing and are unlikely to be brought back into service, but they still pose a major risk. The estimated cost of capping them all? A whopping $30 billion dollars! But don’t worry, in most cases, one of the major oil companies will be responsible for these costs.
So, what’s the big deal with uncapped wells? Well, for starters, material doesn’t necessarily stop coming out of them when the equipment the well was connected to is switched off and removed. This can lead to continued seepage of hydrocarbons, which can be harmful to the environment. Other contaminants can also find their way out of wells, including salty brines, which can contaminate drinking and agricultural water supplies.
But why aren’t these wells being capped if it’s required by law? One explanation is that the present owners may not be as well-positioned financially to pay for decommissioning. Another possibility is that enforcing these rules requires the federal government to step in, and its willingness to do so likely changes depending on which administration is running things.
Despite these challenges, a team of researchers has identified over 82,000 individual wells along the Gulf of Mexico coast, of which only 6,500 are actively producing. The majority (64,000) are already capped and retired. But there are still over 14,000 wells that are not currently producing and don’t have a permanent cap in place. While some of these wells could be revived due to changes in technology or fossil fuel prices, that is quite rare.
The cost of capping these wells rises considerably with the depth of the water they’re in. The good news is that most of the wells—85 percent of them—are in shallow waters. For these wells, the average cost is about $660,000 for each foot of water they’re in, with the overall total liability being $7.6 billion dollars. However, the deep water wells are where the costs pile up. Here, the average cost of decommissioning and capping is over $1 million per foot of water, so the roughly 1,600 deepwater wells that are ready to cap would take about $35 billion to decommission.
But don’t fret, 87 percent of the offshore wells were owned by one of the major oil companies (like Exxon and Chevron); Exxon could have paid for capping every single inactive well last year and still had a profit of over $80 billion. So, let’s put a cork in it and get these wells capped once and for all!
The five Gulf States of the United States are facing a major financial liability of approximately $30 billion of costs associated with closing and capping inactive and uncapped oil and gas wells. This issue has become a major concern for the states due to the significant environmental impacts that these wells can cause.
The U.S. Environmental Protection Agency has identified over 36,000 inactive, uncapped oil and gas wells throughout the Gulf Coast region. These wells represent a major environmental hazard as they can leak oil and gas into local waterways, air and wildlife habitats. In order to effectively prevent these leaks, each well must be safely closed and capped. That process involves inspections, tests, cleanup and capping, which can be extremely expensive and time consuming.
In an effort to address the potential financial burden of this issue, the Gulf States have recently begun to work together in an effort to create a regional system of oil and gas well closure. The system would involve uniform standards and a pooled fund to help manage the sustainability of gas and oil wells in the Gulf States. This system would include standard and uniform regulations and assessments, primarily focused on the identification and closure of inactive and uncapped wells.
Such a system would not only help the states save money, but also protect the environment by closing and capping wells that are posing a risk to the environment. This joint effort could help prevent spills, reduce environmental contamination, and create jobs related to environmental protection and cleanup.
The combined efforts of the Gulf States could help to reduce the total cost of inactive and uncapped oil and gas wells from $30 billion to a much more manageable figure. It is essential that these important states come together and come up with a plan that is beneficial to all of them. It is the only way to ensure that the environment, the health and safety of all, and the financial security of the Gulf States are all protected.
