Plugging the 14,000 orphaned wells left behind after decades of drilling in the Gulf of Mexico may cost more than $30 billion to plug, a new study published in Nature Energy has found.
The four researchers who authored the study, including LSU Center for Energy Studies Interim Director Greg Upton, also concluded that nonproducing wells that haven’t been plugged now outnumber active wells in offshore waters, inland waters and wetlands.
According to an abstract, wells in shallower waters closer to shore make up 90% of inactive wells but only 25% of total plugging and abandoning, or P&A, costs. They also present larger environmental risks. Prior owners of wells in federal waters (deeper and farther from shore) can be held liable for P&A costs if the current owner does not plug and abandon them. Among the findings: 88% of outstanding P&A liability in federal waters is associated with wells currently or formerly owned by one of the large, financially stable ‘supermajor’ companies, including BP, Shell, Chevron and Exxon.
In 2021, President Joe Biden signed into law a $1 trillion infrastructure bill that sets aside $4.7 billion to plug orphaned wells, both onshore and off. That’s enough to cover about 15% of the estimated backlog of orphaned wells.