In State After State, Frackers Drill, Then Walk, Leaving Little To Cover Cleanup Of Abandoned Wells
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That first oil well drilled in Pennsylvania was 70 feet deep. Modern fracked wells, however, can be well over 10,000 feet in total length (most new fracked wells are drilled vertically to a depth where they turn horizontal to fracture the shale that contains the oil and gas). Because the longer the total length of the well, the more it costs to clean up, the funding required to properly clean up and cap wells has grown as drillers have continued to use new technologies to greatly extend well lengths. Evidence from the federal government points to the potential for these costs being shifted to the tax-paying public.
The Government Accountability Office (GAO) released a report this September about the risks from insufficient bonds to reclaim wells on public lands. It said, “the bonds operators provide as insurance are often not enough to cover the costs of this cleanup.” The report cited a Bureau of Land Management (BLM) official’s estimate of $10 a foot for well cleanup costs. StateImpact Pennsylvania noted that costs to reclaim a well could add up to $20,000, and DEP spokesperson Fraley said they could be “much, much higher.” The GAO report noted that “low-cost wells typically cost about $20,000 to reclaim, and high-cost wells typically cost about $145,000 to reclaim.”
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South Dakota allows companies to post a $30,000 bond for as many wells as the company chooses to drill. Spyglass Cedar Creek is a Texas-based company that was operating in South Dakota and recently abandoned 40 wells, which the state has estimated will have a cleanup cost of $1.2 million. However, there is a twist to this story. That $30,000 bond doesn’t really exist. The owners of the company had put $20,000 of it into a Certificate of Deposit. But when the state went looking for that money, the owners said they had cashed it in 2015 because, as reported by the Rapid City Journal, “company officials did not remember what the money was for.”
Spyglass Cedar Creek does not have the money set aside that was required to clean up these wells, the state does not have recourse to get that money, and some of the wells are reportedly leaking. So, what can be done? According to Doyle Karpen, member of the South Dakota Board of Minerals and Environment, the answer is for the taxpayers of that state to cover the cost.
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https://www.desmogblog.com/2019/10/18/public-paying-cleanup-fracking-boom-oil-gas-bonds
