Plugging and cleaning up the open oil and gas wells in Texas could cost companies and taxpayers as much as $117 billion, according to a new report.
Carbon Tracker, a nonprofit financial think tank that studies the effects of climate change on financial markets, estimates there are some 3.8 million unplugged oil and gas wells nationally, including more than 783,000 across Texas. As the coronavirus pandemic forces more oil and gas companies into bankruptcy, Carbon Tracker fears more of these unplugged wells could be abandoned, leaving taxpayers on the hook for plugging and cleaning up so-called “orphan wells.”
“Texas by far has the highest number of wells of any state in the US, and orphan wells are going way up,” said Greg Rogers, a special advisor and coauthor of the Carbon Tracker report. “We’re seeing a lot of operators go bankrupt, and they can’t afford to fulfill their legal obligations to plug in abandoned wells.”
More than 30 oil and gas producers have filed for bankruptcy protection since the coronavirus began widely spreading in the US broke out nationally in March, according to Haynes and Boone. The Dallas-based law firm said bankruptcy filings this year are up 62% compared with the same period last year. There are more than 6,200 abandoned oil and gas wells in Texas, according to the Texas Railroad Commission, which oversees oil and gas companies operating in the state.