When Weatherly Oil and Gas went bankrupt in February 2019, it left the state of Texas on the hook for $10 million of cleanup costs, the Texas Observer and Grist report. Bankrupt drillers leaving behind unplugged wells has only worsened in the wake of the novel coronavirus pandemic. So-called because they have been abandoned by unknown or insolvent operators, orphaned wells can leach toxins into ground water and release heat-trapping methane and other pollutants into the air. In Texas alone, 31 companies worth more than $50 billion went bankrupt in 2020, leaving behind a wave of wells for which taxpayers will be on the hook.
Even though oil and gas companies are supposed to set aside money to pay to cap wells if they go bankrupt, weak and frequently-waived, regulatory requirements will leave Texas taxpayers to foot the $300 million bill to clean up the state’s (at least) 6,000 orphaned wells, according to a new report from Commission Shift. No one knows how many abandoned and orphaned oil and gas wells exist in the U.S., but EPA-cited estimates in 2018 ranged from 2.3 million to approximately 3 million — numbers that have almost certainly grown since then. Plugging and remediating orphaned well sites could be a major job creator, employing as many as 125,000 oil and gas industry workers. Weatherly paid its top executives a combined $8.6 million in the year before its bankruptcy and its former CEO became a bankruptcy expert for FTI Consulting. (Texas Observer and Grist)