Big oil is shedding old wells in California, many leaking and environmentally unsound. When the new buyers go bankrupt who do you think will be ultimately left holding the bag? Good article at TPM.
If it’s not profitable to return wells to production, they need to be plugged. But if a company doesn’t plug its wells before walking away, wells are orphaned and the cleanup costs ultimately fall to taxpayers and current operators through fees.
This has happened with thousands of wells in California and hundreds of thousands, or more, across the country.
For example, the Greka group of companies left more than 750 wells for California to plug when its wealthy owner began pushing his businesses into bankruptcy in 2016 and retired to his Santa Maria winery. And a subsidiary of one of the country’s largest mining companies, Freeport-McMoRan, left dozens of likely orphaned wells, state records show, even though the company brought in nearly $23 billion in revenue last year.
Greka’s CEO didn’t respond to a request for comment, and a Freeport spokesperson said the company is working with the state to verify details about its orphaned wells.
I started looking into the abandoned oil well problem, the Santa Barbara Grand Jury sensed something was rotten two years ago, the County Supervisors did nothing, basically said it was the responsibility of the state.
Another article on the subject; Oil bankruptcies leave environmental cleanup bills to California taxpayers.
...RILP and HVI Cat Canyon are just two of more than 260 oil and gas exploration and production companies that have filed for Chapter 11 bankruptcy in North America since 2015, according to law firm Haynes and Boone. Also among them was California Resources Corp., one of the state’s three major oil and gas producers. In Chapter 11 bankruptcies, companies try to restructure and resume operations, but some are ultimately converted to Chapter 7 bankruptcies where their businesses are liquidated.
Those roughly 260 bankrupt businesses combined to carry more than $175 billion in aggregate debt into the filings, most of it unsecured.
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