Any summer blockbuster worth its salt features a global disaster montage: a fleet of spaceships hover over world landmarks, asteroids careen into skyscrapers and pyramids, zombies lumber around small towns and mega cities alike.
These scenes serve several functions. First, they are an opportunity to blow things up. Second, these montages establish the stakes—the threat is global. Previous political, geographical, and ideological boundaries melt in an instant. The threat is agnostic and universal. In a darkened movie theater, it’s strangely comforting to imagine a scenario where former factions must join forces to fight a common enemy. If you will indulge me, I’m going to begin this article with a similar disaster montage.
Scene 1. Suburban Denver neighborhood. Newly built craftsman-inspired homes. Interior: Two men wrangle with a hot water heater in the basement, a woman is on the first floor, and an 11-year-old boy is in his room. No one knows that lurking below the neighborhood is an oil well and an unsealed flowline leading to a buildup of explosive gas. First there is a deafening boom, followed by an explosion that engulfs the house in flames. The two men are killed, the entire top floor collapses onto the woman, and the boy quickly jumps from a second floor window in an unthinkable gambit to save his young life. Nearby construction workers are able to pull the woman from the flames and rubble. Over the next week neighbors mourn their neighbors’ death, unaware that a second gas pocket has formed beneath the community.
Scene 2. Southern Los Angeles. A construction crew and an oil crew are busy at work attempting to reseal a 1937 oil well in the middle of a new hotel parking lot. Underground pressure, built up over decades, suddenly erupts—this is known as a blowout—and sprays a worker with oil, gas, water, and sand before he can slide down a safety rope to escape the geyser. The well spews this toxic mix into the sky for 10 minutes, and continues to leak gas unreported for a week. On the street, families walk unknowingly to and from school, work, and home. Across the street apartment buildings full of Angelenos go through their day, totally unaware that they are breathing in toxic air and that an explosion could happen at any moment.
Scene 3. An elementary school in Ohio. A teacher is at the board and the kids quickly cover their noses and mouths. Someone loudly asks “Who farted?” The teacher is annoyed, but annoyance switches to worry as the smell becomes stronger. She instructs the kids to stand up and follow her. The entire school starts to trickle out and make their way to the athletic field. The camera tunnels to below the school where we hear the familiar hissing of gas from an old oil well. The air down there is distorted by gas.
Scene 4. A montage within a montage. A map view of the United States, jumping from one state to the next—Louisiana marshes, New Mexico plains, California high desert, Pennsylvania forests—and from one jump to the next we see rusted valves, hear the telltale hiss of distorted air that means gas (mostly methane) of untold volume is spewing from the depths and rising high, high into our atmosphere with a heating impact 84 times more potent than carbon dioxide.
Divided We Fall
These horrors happen constantly, but they are never juxtaposed as they would be in a disaster movie. Instead of being portrayed as parts of a single story featuring the oil and gas industry as the singular menace and responsible threat, each of these events are framed in the news as a tragic accident, a failure of a particular regulatory body, a relic of the region’s past, or just a quirk. They are nothing but anomalies. And, as a consequence, they are fights that families and communities wage alone. No alliances, no solidarity. And no one is able to see the secret boss who maims and wreaks havoc on American communities every day.
This is entirely the point. Regulation of oil and gas activity in the United States is a fragmented and scattered thing. The oil and gas industry divides and conquers. It likes to push regulatory issues down to states where they can easily buy out whole state legislatures, rig local tax and zoning laws, drive down bonding requirements, and then underfund, understaff, and capture state agencies that regulate oil and gas activity. In total, oil and gas exploration and production takes place in 27 states on private, Tribal, state, and federal land and waters.
After 150 years of oil and gas production in the United States, the industry’s footprint is ubiquitous and inescapable. With the advent of fracking, the industrial invasion into residential and commercial spaces has only accelerated. Oil- and gas-controlled state legislatures allow pipeline companies to seize private land, and oil and gas operators encroach into residential areas. As Dr. Anthony Ingraffea, former industry insider and current fracking opponent puts it, “oil and gas law in most states trumps zoning. It permits the oil and gas industries to establish its industry next to where we live. They are imposing on us the requirement to locate our homes, hospitals and schools inside their industrial space.”
The Life of Oil and Gas Wells in the U.S.A.
*Before we continue, it will be helpful to have at least a vague understanding of these terms:
Orphan wells: abandoned oil and gas wells for which no viable responsible party can be located. Private owners “orphan” wells, and leave the costs and responsibility to decommission and plug the wells to American residents.
Abandoned wells: wells that have been plugged and are no longer producing oil or gas. When a well stops producing commercial quantities of oil and gas, companies “abandon” it, usually by placing cement or bentonite clay plugs inside the wellbore, stopping the flow of gas and fluid. Regulators have different standards for abandonment, and the time period when a well was “abandoned” determines the useful life of a plug. Plugged and forgotten, local authorities unknowingly permit construction of homes, schools, and commerce on these former oil and gas sites. But cement and clay deteriorate and plugs weaken.
Stripper / Marginal well: a well that is nearing the end of its economically useful life. Owners of a well like this may artificially extend this phase to stall plugging and abandonment requirements.
Idle wells: oil and gas wells which are not in use for production, injection, or other purposes, but also have not been permanently sealed. Operators forego plugging the well to a later date and designate the well as idle. Instead of plugging a well, operators cap it. Capping a well is much cheaper than plugging a well, and wells can be capped and left “idle” for indefinite amounts of time.
Legacy Wells – any previously undiscovered, unreported, un-permitted historic well. The status may be active, shut-in, abandoned or plugged (but with older technologies). All wells will become legacy wells unless monitored and maintained. Most jurisdictions do not require monitoring or maintenance.
An oil well is essentially a straw that reaches down into the earth, down to where oil and gas are trapped, often at high pressures. Once that straw goes in, the oil companies can capture the oil and gas that comes out, and they can keep pumping more out once the pressured flow stops. But sinking a metal straw thousands of feet into the ground is no easy feat. The financial rewards for doing so incentivize oil companies to organize the financing and engineering know-how to get the straw in and get the oil and gas out. Unfortunately, as of now, that is where the incentives end. Companies have little reason to spend the money and resources to make sure their straw holes are sufficiently closed off when they’re done extracting.
The life of an oil well begins with financing. Oil and gas exploration and production is a money-intensive industry that requires technical geophysical and geologic investigations (is there oil or gas in the first place?), unknowns and risks (the geologic data may have been misleading or the resource is not economically recoverable), heavy machinery rentals and specialized human labor (if you can use prison labor or import captive labor, all the better!), and finally a guaranteed market for the stuff you pull out of the ground (no one wants to be left holding tankers full of worthless oil). Concurrent with financing is access—is the publicly owned land available for lease? While states and the federal government can’t even contend with existing inventories of oil and gas wells, both lease new areas for drilling almost weekly. For decades, both federal and state law has required biannual and sometimes monthly auctions of oil and gas resources. The Gulf of Mexico is up for grabs twice a year, every year. Federally-owned land in New Mexico is on the digital auction block four times a year, each year. And many states hold sealed-bid online lease sales every single month. Imagine a market where, regardless of demand or commodity price, the seller is required to sell by law. These are literal fire sales of our public resources. And then there are private landowners. Do the farmers own the mineral rights on their property? When you purchase a home, there’s typically a clause stating that you don’t own the subsurface resources below your home. There’s a whole economy of landmen and title trackers who smooth the path for mineral rights.
Once all of that is sorted out, the drilling rig is in place, and the staff geophysical scientist or geologist confirms where to punch through, a well is drilled straight down into the ground to a depth of 100 feet below the deepest known water aquifer. The widest type of casing is called a conductor pipe, usually about 30 to 42 inches in diameter for offshore wells and 16 inches in diameter for onshore wells. (See here for a basic step-by-step on fracking.) When target depth is reached, the drill pipe is removed and a steel pipe is pushed to the bottom. This “well casing” steel straw is cemented in place. Oil flows up the straw and production begins.
But these structures are not always fail-safe. Deficiencies in the design or construction of the wellbore, or weakening of the pipe or sealant over time, can connect sediment layers that would naturally remain geologically isolated. Wellbore leakage can occur along actively producing wells or wells that have been permanently abandoned after their productive life is over. Most jurisdictions require plugging (with cement) of the production casing and site remediation, but most jurisdictions do not have the resources or capacity to enforce these rules, or to investigate and confirm whether all machinery has been removed and the land restored. As a result, these wells are lost to records and oversight. Even a well that is considered safe and plugged on paper may have an undetected leak with gas escaping above ground or building up below, until one day a house explodes, a school is evacuated, or the well has already gushed 97,100 tons of methane into the atmosphere.
Dine and Dash
In addition to being dangerous, the oil and gas industry’s wreckage is expensive. As more land is leased and more wells are drilled every day, the industry has not planned for the retirement of non-producing wells. Federal and state regulators require a certain amount of “bonding” to protect the public from the risk of an oil and gas company folding. “Bonding” here means buying an insurance bond—paying a small amount upfront to an insurance company for a policy that will pay out a larger amount for well cleanup if the company goes bust. While this might work in theory, it’s a different story in practice: Greg Rogers and Robert Schuwerk of Carbon Tracker recently compared bonding requirements to the actual costs of decommissioning and abandonment. Take New Mexico, ground zero for the nation’s shale boom. The New Mexico’s Oil Conservation Division’s bonding requirements are based on its own in-house cost estimates of $28,000 to plug a well with no spills, but Carbon Tracker’s analysis revealed that the real average cost for plugging the 73,000 open wells in New Mexico will be $141,000 per well—five times the state’s reported average. Let’s move onto California. Carbon Tracker estimated that it would cost $7 billion to plug the state’s 108,000 onshore wells, but the current bonding only amounts to $107 million, a shortfall of about $64,000 per well. In total, 2.6 million documented onshore wells in the United States alone are estimated to cost $280 billion to properly plug and abandon. (That’s onshore wells only—including offshore facilities would likely put the total cost in the trillions.)
Different states have different requirements on how long a well can sit idle before the operator is required to plug and abandon it. California has no time limit. North Dakota has a one year limit, but the operator can petition for a seven year time extension. Operators tend to delay permanent abandonment of wells as long as possible (kicking the can and costs down the road). You can see why: money spent later is better than money spent now. Also, an idle but open well might be a valuable asset if oil or gas prices increase dramatically.
Delay isn’t the only way operators try to avoid the cost of plugging old wells. Often large firms will offload these wells onto smaller firms, or create dummy firms to move the wells and environmental debt off their books. This year, BP sold its Alaskan assets to a company named Hillcorp. When Hillcorp was unable to secure financing for the $5.6 billion price tag, BP agreed to finance the sale itself! The State of Alaska reviewed Hillcorp’s financial statements and blocked the sale, citing insufficient financial ability to clean up the BP wells. In the end, BP agreed to remain responsible for those liabilities, but since there is no SEC line item for this kind of “contingent liability,” BP still booked the $5.6 billion sale and scraped the associated environmental liabilities off its books. So while BP remains legally and financially responsible for those wells, the value of BP’s stock does not reflect those future debts. These kinds of sales allow larger firms to artificially inflate their value.
Several of the seasoned researchers and scientists I have spoken with have emphasized that this shell game—passing off old wells from LLC to LLC and further down the line—is an intentional industry practice. Dr. Ingraffea explained: “There are bottom-feeding companies, the business purpose of those companies is to acquire aging, leaking oil and gas wells that are AROs (Asset Retirement Obligations) that owners want off their books. Why isn’t that illegal?”
When Dr. Ingraffea and I recently spoke, he stressed how bad of a deal this truly was for the American public. “Do my fellow 328.2 million American residents know that our public dollars are going to clean up a private mess?” he asked. “Or should that be paid by shareholders instead?” Dr. Dominic DiGiulio, 30-year EPA veteran and senior research scientist at PSE Healthy Energy, noted that this is not by accident and precisely the industry’s intent. Dr. DiGiulio explains that oil and gas shareholders and executives make off with short-term profits and then “externalize costs and impacts to society.” The oil and gas industry will not pay to clean up its wreckage unless we force it to.
The Geographical Scale
After 150 years of oil and gas production, an estimated 10 million [onshore] wells puncture the United States. (This figure does not include state or federal waters.) Of those, there has been much focus on orphan wells: those wells for which no responsible owner can be located, or where the owner is known but bankrupt. But “orphan well” is just a legal classification. There are wells with publicly-known and financially solvent owners that also spew methane into the atmosphere, contaminate groundwater, and poison nearby communities with little or no accountability.
The number of producing oil and gas wells in the United States stood at about 982,000 in 2018, and only about 21 percent of these wells produced more than 10 BOE (Barrel of Oil Equivalent) per day. These low-producing wells are also known as marginal, idle, or stripper wells. Operators keep these wells “producing” indefinitely to avoid having to pay for plugging, leak detection and repair, and site reclamation. Dr. Amy Townsend-Small, an Environmental Scientist with the University of Cincinnati who studies greenhouse gas emissions, walks fields looking for old oil wells and measures emissions directly at the wellhead. She cautions that regulators and the American public should widen the potential policy scope to all wells. Dr. Townsend-Small told me that, based on current research, “some stripper wells are venting or leaking 100 percent of the gas they produce,” and that idle and marginal wells could be responsible for as much as “between 5 and 11 percent of methane emissions in the oil and gas production sector.”
Then there are properly “plugged and abandoned wells.” The terminology is terrible and confusing, but “abandoned” means a well that has been plugged, and (as you may guess) abandoned. But although the oil companies may have abandoned those wells, it doesn’t mean those wells are quite done with us. Studies by Kang et al. 2014, Kang et al. 2016, Boothroyd et al. 2016, and Townsend-Small et al. 2016 have all measured methane emissions from abandoned wells. Both properly plugged and improperly abandoned wells have been shown to leak methane and other VOCs (Volatile Organic Compounds) to the atmosphere as well as into the surrounding groundwater, soil, and surface waters. In these studies, some leaks were shown to have begun just 10 years after operators had plugged them! The Environmental Protection Agency estimates that between 2.3 million and 3 million documented abandoned oil and gas wells spread across 27 states emitted 7.212 million metric tons of carbon dioxide equivalents, particularly methane. Put another way, these wells are like putting an additional 1.5 million cars on the road.
There is no combined national inventory for the total number of legacy wells, orphaned wells, abandoned wells, inactive/idled wells, and producing wells. There is no uniform nomenclature. There is no national or shared database. There is no monitoring system. We don’t know where every well is located, and it will only get worse. After the shale industry inevitably collapses, how many wells will be lost to our records? How many homes will be built atop these ticking time bombs? Which water aquifers are at risk? How much are wells actually emitting? We don’t know.
The Temporal Scale
Current law limits a private firm’s responsibility when it comes to initial plugging and abandonment (P&A), or plugging a well and walking away. But as we just learned, properly plugged and abandoned wells can leak anyway. Most P&A laws (and bonding amounts) only require that owners plug the production casing and do not require a comprehensive investigation of other potential leaks. A “plugged” well that is not emitting above ground may be leaking and contaminating water aquifers with thermogenic methane below.
But even when all leaks are detected and sealed, there’s still an expiration date. Cement can fail. Engineered solutions have an engineered life. There is no legal requirement to monitor abandoned wells and no standardized approach to measuring methane emissions from abandoned wells. This means that today millions of “plugged” wells are likely leaking. Wells drilled before 1980 have a higher risk of well casing failures, and wells drilled before 1953 are not considered effective, even by industry standards. Prior to 1950, wells were either orphaned or plugged and abandoned with very little cement. This information leads us to a disquieting conclusion: given the inevitability of leaks, all U.S. oil and gas wells pose a public risk and will necessarily be the responsibility of the American public and its government. No federal or even state orphan well programs begin to confront this truth.
Every single oil and gas well that has ever been drilled is at risk of leaking in the future and needs to be monitored and maintained in perpetuity. Oil and gas wells are forever.
Lucrative and Temporary Fixes
Just as the COVID-19 virus began advancing through Italy in early 2020, a consequential meeting was taking place at the Organization of the Petroleum Exporting Countries (OPEC) headquarters in neighboring Vienna, Austria. Global production of oil has been outpacing demand for years. You can only underfund so many public transit systems, sell so many cars, and make so much single-use plastic. When American shale flooded the global market, it drove prices down even further. The March 2020 meeting was intended to decide whether to lower each OPEC nation’s respective production and push prices back up. Russia refused to turn off the taps, kicking off the 2020 Russia-Saudi Arabia oil price war. Days later, most of Europe went under lockdown. The oil industry’s predictable collapse had a new scapegoat, and the industry’s henchmen reframed the oil supply glut as an Act of God worthy of public relief. More than $1.9 billion in CARES Act tax benefits have been claimed by at least 37 oil companies, service firms, and contractors according to filings with the SEC.
Then orphan wells were added to the menu. Oil and gas industry proxies and even some mainstream environmental organizations began pushing the funneling of federal money to states to augment state orphan well programs. The rhetoric was elegant and persuasive: we can tackle these wells and put oil and gas workers to work. It’s a win-win. But the devil is in the details. Most of the proposals shared some common features: Federal Money → State Orphan Well/Federal Orphan Well Program → Private Contractor → “Plug and Abandonment” work. Columbia’s Center on Global Energy Policy and Resources for the Future crafted one of the best-cited orphan well grant program proposals. The proposal is particularly popular among oil and gas industry groups who have framed it as a way to keep oil and gas businesses afloat. It makes sense when you consider that the two think tanks’ respective funders’ circles are a veritable who’s who of oil and gas production and service firms and investment shops (from Aramco to Total).
First, let’s focus on why this legislation focused just on “orphan wells” as opposed to also including idle and abandoned wells. Dr. Townsend-Small has some thoughts: “In Ohio, plugging orphaned wells is something everyone agrees on. My impression is that the oil and gas industry agrees because the location of orphaned wells are not well known and sometimes when they are trying to drill in the Appalachian Basin they may drill into an abandoned wellbore—so they want the public to do the scoping for them.” That is, orphan wells are in the way of drilling new wells, but the industry doesn’t know where they are. If the public can pay to find and plug orphan wells, that will reduce industry costs when it comes to drilling new ones.
Second, let’s look at why the industry has punted the problem to the states. Louisiana is a good one to start with, because it’s my home state and also because it has one of the nation’s oldest orphan well programs. The Louisiana Oilfield Site Restoration Program (OSR) was established in 1993 and is overseen by an unelected Commission, which includes mostly members from oil and gas industry advocacy organizations such as: the Louisiana Oil & Gas Association; the Louisiana Mid-Continent Oil and Gas Association; and the Louisiana Landowner’s Association (a group representing subsurface mineral rights owners). The unelected, industry-dominated commission has statutory authority to approve and evaluate the annual priority site restoration list, choose contractors, and review administration of site restoration activities. The OSR is essentially another example of industry regulating itself: funneling federal dollars to captured (by design) state programs amounts to another sneaky subsidy.
Which leads us to the next question—why not provide these programs directly to oil and gas workers? The oil and gas industry has fired 118,000 workers in the United States this year alone. Over and over again, these orphan well proposals have been sold as jobs programs. Yet the relief is designed only to pay oil and gas service firms without any requirement to retain oil and gas service workers. In New Mexico, higher-end estimates for a federal grant program to merely plug the identified 700 orphaned oil wells are estimated to support just 100 jobs. In Louisiana, plugging all of the documented orphan wells would employ 1,000 oil workers full-time for just one year. Since many of the approved firms on the OSR’s approved contractor list participate in the state’s Transitional Work Program, there’s a good chance many of those workers will be incarcerated Louisianans, and, in addition to being slave labor, will not actually add to the state’s employment rolls. Ohio recently increased the scale of its own orphan well program, but discovered that because the government was exclusively reliant on private contractors, it could not find enough qualified contracting firms in Ohio to bid on jobs. So why structure it this way? Why not recruit unemployed workers directly to work in a state program? There are certainly enough unemployed oil and gas workers to go around.
It’s almost as if oil and gas service firms pay to craft these proposals. When I spoke to Dr. Dominic DiGiulio about the proposals floating around, he quipped, “They [the oil and gas service firms] are thinking of a bailout. It’s not about helping actual people.” Indeed, in case it wasn’t clear that they are explicitly laundering pro-oil and gas positions, the Columbia think tank also marketed natural gas as a bridge fuel and even sold American shale gas expansion as a strategy to own the Russians. The Columbia Center on Global Energy Policy was one of the leading proponents behind the successful overturn of the crude oil export ban. (Note: these two actions are responsible for increasing global carbon emissions by as much as 73 to 165 million metric tons of CO2-equivalent each year—comparable to opening 19 to 42 coal plants. Despite promises that overturning the ban would reduce imports from other countries, imports of crude oil on the East Coast rose by 35 percent in 2016.)
Finally, do these programs actually eliminate or reduce the risk of leaking and emitting wells? As I explained in the beginning, framing the oil well issue as a problem of particular states or jurisdictions obscures the national nature of the oil and gas well threat. None of these proposals grapple with the geographic or temporal scale of the problem. None of these proposals seek to identify and catalogue all wells, nor do they even propose installing sensors on orphan wells, nor do they explicitly supply direct funding to identify and repair leaks. None of the proposals identify and prioritize the highest methane-emitting wells. That is not their goal or mission. Their goal is to capture public dollars for private companies to plug the production casing of a few orphan wells and pat each other’s backs for the appearance of a job well done.
Regan Boychuk is a Canadian expert on well decommissioning costs with the Alberta Liabilities Disclosure Project, a coalition of landowners, former regulators, and other stakeholders. He recently explained to me some of the limitations of the Canadian government’s own 2020 stimulus for oil and gas well cleanup. “The first mistake,” he said, “is that it violates the ‘polluter pays’ principle.” The “polluter pays” principle is exactly what the name says: any cleanup effort should require those responsible for the pollution to pay for its cleanup, at least substantially if not completely. Any other structure creates the exact wrong incentives. Boychuk continued: “The Canadian program amounted to a direct transfer [from the government] to the polluters. The second mistake is that there was no meaningful oversight, no standards, and no strings attached. It’s another subsidy to the oil and gas industry.” Despite being touted as an employment program for oilfield service workers, Boychuk noted that its impact was marginal: “Despite a billion-dollar injection, the service industry is standing still. And fine, a few thousand people have temporary employment, but that’s out of a quarter million people who have lost their oilfield service jobs.” Rather than learning from Canada’s mistakes, the United States is repeating them.
Business as Usual
What is the actual point of these proposals? North Dakota recently provided a big clue. The state’s Department of Mineral Resources only reclaimed half of the wells they had previously intended to plug and are now pushing to funnel $16 million of unspent federal money directly to fracking companies for drilled but uncompleted wells. As of the time of this writing, one out of 15 North Dakotans have tested positive for COVID-19 with hospitals at 100 percent capacity, and the public policy response on the table is to pay private companies to finish fracking their own wells. Wyoming has just joined North Dakota with a new program to dish out $15 million in federal dollars to private companies to drill their uncompleted wells. While North Dakota and Wyoming are particularly blatant examples, they hint towards the industry’s end game for well cleanup programs: more oil and gas production. The orphan well programs divert public capital to private forms so they can weather low prices until they rebound. Enter the dawn of the “negative emissions” oil industry.
Dr. Ingraffea is also Co-Editor-in-Chief for the peer-reviewed journal Engineering Fracture Mechanics. The journal, which has existed for 51 years, only began receiving papers about stimulating shale formations with CO2 (aka fracking) about five years ago. Today, the journal receives two to three journal submissions a week in favor of CO2 fracking. It turns out that the oil and gas industry wants to use CO2 to frack new oil and gas wells, also known as “carbon dioxide enhanced oil recovery,” or EOR. Of course, Dr. Ingraffea has some questions, “Where did you get the CO2 from? How did you liquify it? How did you get it to the wellsite? How do you pump it down? What happens if it comes back up, and what do you do? What is the net effect? Have you in fact ensconced it—sequestered it?” These questions have only tentative answers, and if the regulation and oversight of well decommissioning is any guide, future “solutions” will likely prove inadequate.
In the last year, the network of oil and gas industry funded think tanks housed in higher education institutions from coast to coast have begun to debut their own “net zero” initiatives. As Benjamin Franta has doggedly demonstrated, big oil has soaked higher education research institutes in oil and gas money to manufacture support for its positions for decades. The architects behind Columbia’s Center on Global Energy Policy recently launched the Carbon Management Research Initiative. The Colorado School of Mines just debuted the Integrated Carbon Capture Utilization and Storage Initiative. Louisiana State University’s Center for Energy Studies penned a study that would add a green sheen to both the state’s petrochemical corridor (Cancer Alley) and the Haynesville Shale Gas Play. At first glance, the thought of climate-rescuing technology is enticing. But EOR and carbon capture or its latest rebranding as “negative emissions technology” is not a last-minute deus ex machina. It’s a Trojan horse, a pretense to drill more, divert capital from renewable energy, and delay the energy transition further into the future.
And we still don’t even get jobs out of the exchange. No matter how much public money we throw at it, the oil and gas industry has zero intention of bringing human labor back to previous levels. Indeed, the oil patch and Silicon Valley have been scheming for years to automate rigs and force remaining workers into precarious contractor arrangements. That’s right: the gig economy and automation are coming for the oil rigs. For example, the use of digital A.I. twin tech for offshore rigs is making many North Sea workers’ jobs redundant. Platform London recently completed a groundbreaking study featuring the voices of 1,300 oil and gas workers. Of these workers, 42.3 percent have been made redundant or furloughed since March 2020. Common themes from the survey included complaints regarding precarious contract arrangements, arbitrary cuts to contract rates, declining safety standards and morale, and a desire for government intervention. But much like the oil and gas industry’s habit for abandoning its environmental wreckage, it is leaving its workers behind.
Jon Clarke has spent 15 years as a commercial diver in the Gulf of Mexico, working on projects for Shell, Exxon, Chevron, and various smaller oil companies. We recently spoke about how bad it was for regular workers, “This past year I’ve only worked on bridges and docks. The oil field work that was providing the income for my family has disappeared in the past two years. The diving companies are only using 1099 hands [independent contractors], leaving us without health insurance and 401ks on top of pay cuts. We’ve been so broke this year, I’m beyond pissed off, somehow I had unemployment and I’ve gone through it all already.” When asked about the future of the industry, Mr. Clarke was not optimistic, “It has only gotten worse in the past five years, [and] with the price of a barrel being under $60 I don’t ever see it coming back.”
The Abandoned Well Administration
It seems unlikely that the oil and gas industry will ever again provide the jobs it used to or commit to a real transition to non-fossil fuels. When it comes to abandoned wells in particular, President-elect Biden’s transition team has already committed to creating thousands of jobs to plug and abandon oil and natural gas wells. So here’s a sincere question to readers: do we want to be manipulated into a scheme to idle the oil and gas industry indefinitely? Or do we want to create tens of thousands of real jobs, protect our communities, and commit to a true transition?
Assuming we want the latter, what’s the solution? I was asked this question a few years ago when I worked as a policy analyst for the Department of the Interior’s Bureau of Ocean Energy Management. Several sole liability companies had declared bankruptcy, thereby discarding rusting rigs, subsea pipelines, and orphaned wells in the Gulf of Mexico. My team came up with an interim and incomplete policy fix, but we didn’t have the power of the Executive Order or the power of the legislature.
I’ve thought a good deal about the scale of the crisis we face. I’ve spoken to workers and residents of frontline communities terrorized by these ticking time bombs. We face a common enemy and existential threat. We must be united in our response. The geographic scope must be national and the temporal scope must be forever. We must put communities and workers first. To achieve these goals, we will need to consolidate responsibility and authority in an independent and single-mission agency that can tackle these issues with minimal risk of industry capture.
My proposal: the Abandoned Well Act of 2021 which would create the Abandoned Well Administration (AWA) and implement necessary reforms to the regulation of existing oil and gas production. The AWA would be a new executive-level agency that would recruit and directly employ a new federal workforce of displaced oil and gas workers. AWA civil servants would identify and safely decommission the millions of oil and gas wells and related infrastructure across our nation via 30 field offices and an arsenal of rigs and equipment, equipment owned and maintained by the government. The AWA would oversee and manage a national monitoring and safety response program, which would include a citizen’s portal and hotline that allows frontline communities to directly alert the AWA of fugitive emissions, flaring, and other oil and gas well related emergencies.
Of course, managing a transition to a post-fossil fuel economy would take more than just the AWA. But the AWA would be a critical first step toward understanding what saving the world would look like, and not just what industry would like to trick us into thinking it looks like. There are key and necessary features we must include in any national policy response to the threat of oil and gas wells and related infrastructure, as well as any path to a true and just energy transition.
The incoming Biden Administration has already committed and recommitted to pruning the tax code of subsidies and tax breaks for the oil and gas industry. President-elect Biden has also indicated that he would end federal leasing of oil and gas resources. He may or may not stick to it, but it is absolutely the correct action. If you have a leaking bathtub, then the first step is to turn off the faucet. Overburdened federal agencies cannot even handle their existing inventories of leased properties, and adding more to their plate only compounds the crisis. Next, we ought to establish an “Abandoned Well” tax on all oil and gas well owners in the United States, regardless of whether that well is located on federal, state, Tribal, or private land. These wells are already imposing costs on all of us and it is time that we begin collecting on that debt. It is time to begin shoring up the necessary revenue to begin paying for the trillion dollar bill the oil and gas industry and its shareholders are leaving in their wake before they go bust. The polluter should pay.
Directly Employ Oil and Gas Workers
The incoming Biden administration has already committed to “not leaving any workers or communities behind,” and I agree. Oil and gas workers face a fatality rate nearly five times that of all industries in the United States combined. From 2008 through 2017, 1,566 American oil and gas workers died from injuries in the oil-and-gas drilling industry and related fields, according to data from the U.S. Department of Labor’s Bureau of Labor Statistics. Currently, no public agency is keeping track of, nor are companies disclosing, COVID-19 outbreaks on oil rigs. Oil and gas companies routinely steal from their workers and knowingly expose workers to catastrophic risks. Oil and gas companies are not oil and gas workers, and oil and gas workers are not oil and gas companies. Handing out public money to a private oil and gas company directly to plug its own wells does not actually make our communities safer or improve the conditions for oil and gas workers.
Oil and gas workers have powered our nation and communities for decades and they deserve the option to continue their trade in a way that benefits their own communities, receive job training if they want to transition to another career, have safe and secure employment, and enjoy a retirement with dignity and comfort. Oil and gas workers discarded by the indifferent oil and gas industry or displaced because of necessary climate policy don’t have to be “necessary causality” and deserve a true and just transition. When I spoke to Jon Clarke (the underwater welder who works in the Gulf of Mexico) about greater focus on transitioning and dealing with abandoned wells, he liked the possibility of stability and a return of benefits. “Plugging and removing orphan wells would be a boom for my sector. It would be nice to have benefits and a worthwhile wage to put our heads underwater for them.” Oil and gas workers possess critical expertise and it is imperative that we retain their skills before these workers are lost to other industries or overwhelmed by the impacts of long term unemployment. The scale of oil and gas wreckage is massive and the need for monitoring is indefinite, and as a consequence, the AWA will provide durable and lasting employment for decades.
National in Scope, Perpetual in Duration
When an oil or gas well emits methane, that methane ascends into a global atmosphere, compounding catastrophic climate change impacts across state and international borders. When an oil and gas well leaks into groundwater, it can contaminate the freshwater resources across county, state, and even international borders. This is a national and international crisis that requires at least a coordinated federal response. We should carry out a national audit (digital and physical) of oil and gas wells and supporting infrastructure and develop a national classification system and database. If we don’t want to unknowingly build homes and schools atop these explosive relics, then all jurisdictions and communities must have access to the same database.
Put American Communities First
Some people may dismiss this plan as too ambitious or unrealistic, but what is sensible about letting 118,000 people with needed skills languish in unemployment? Is it good public policy to allow the impacts of these wells to compound, maim, and murder? Is it cost-effective to allow the oil and gas industry to capture public dollars and leave future American generations with this national environmental debt? I’ve only disclosed a few key features of this legislation and national program in this article, but at the heart of every component of this bill and the design of the Abandoned Well Administration is the safety and well-being of AWA workers and American communities. I believe we can and should craft public policy for the public’s benefit. It will take a great deal of work and a principled defense of the idea that we have a right to safe communities and energy transition set by our own terms, but I know we are ready.
The American public has been asked to either sacrifice a livable planet or cast aside thousands of humans and their families and the local economies they support. But this is a false choice. The oil and gas industry has already discarded those workers and abandoned those communities, and the industry can no longer hide behind the claim of job creation. But we, the American public, can employ every single worker and rebuild every single community. From rig managers to drillers, and roughnecks and roustabouts—each possesses valuable and needed skills to make our communities safer and healthier. And those AWA paychecks will pay local mortgages, fund local governments and schools, and support real families. We are no longer in opposing camps. Rural communities, cities, workers, all of us—we face a common threat. It is time we fought back.