Joe Biden’s plan to plug tens of thousands of abandoned oil wells across the US risks rewarding fossil fuel operators who shirk their clean-up responsibilities and hooking the industry on taxpayer bailouts, critics say. The president’s $2tn infrastructure proposal includes $16bn for cleaning up disused wells and mines. The White House reckons the project could create “hundreds of thousands” of jobs while ending hazardous leaks.
But some analysts argue the project will leave taxpayers footing a bill for past negligence and encourage more bad behaviour in the future. “The worry is that the oil and gas industry is going to take this and say: ‘We don’t really have to clean up our act because if we don’t, we know the federal government is going to step in’,” said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis.
State regulations require operators to plug wells at the end of their lifetime — a process that can cost anywhere from $4,000 to $150,000. While this is only a fraction of the $8m expense of drilling a well in the first place, big drillers have become adept at offloading old wells, which often end up in the hands of smaller producers who cannot afford the clean-up costs.
“There’s a process of basically spinning off your liabilities into successively weaker operators . . . until the company is maybe thriving somewhere else but has no responsibility for cleaning up the mess they were initially responsible for,” said Williams-Derry.