Zombie Wells: A $280 Billion Problem the U.S. Can’t Ignore

Yves here. This post describes a failure of US regulation and a hazard to public safety. It also confirms the consequences of subsidizing gas and fuel prices with no thought of the long-term consequences. Properly pricing oil and LNG production would include requiring large reserves for clean-up after shut-down and ongoing liability to operators. This would not have solved the problem (how to handle bankruptcies would be a problem) but it would have considerable reduced the scale of the toxic decommissioned well problem.

Note this article does not focus on the risk posed by shuttered LNG well save for them causing problems with older oil wells. Given that fracking breaks geological structures, one has to think that they would be inherently difficult to seal well.

But of course we must have groaf, which has rested on cheap energy, and so damn the costs.

By Haley Zaremba, a writer and journalist based in Mexico City. Originally published at OilPrice

  • Millions of abandoned oil and gas wells in the US pose a serious environmental and public health risk.
  • The Bipartisan Infrastructure Law allocates $4.7 billion to address the issue, but the estimated cleanup cost is $280 billion.
  • In Texas, increased underground pressure from wastewater injection linked to fracking may be causing previously plugged wells to reopen.

One hundred and fifty years of oil and gas production in the United States has left millions of decommissioned wells scattered around the country. While they no longer have much, if any, oil and gas to offer, the wells are still highly productive. Unfortunately, what they’re producing is a veritable pandora’s box of toxins threatening local human and environmental wellbeing.

“These legacy pollution sites are environmental hazards,” declares a United States Department of the Interior site dedicated to orphan wells. “[They] jeopardize public health and safety by contaminating groundwater, emitting noxious gases like methane, littering the landscape with rusted and dangerous equipment, creating flooding and sinkhole risks, and harming wildlife.”

Many of these wells – known as ‘orphan wells’ no longer have any official owner, and their proper decommissioning has therefore become the responsibility of the United States government. And while the country has made major inroads toward addressing the widespread and growing problem of orphan wells, most notably through the Biden Administration’s recent Bipartisan Infrastructure Law, which earmarks $4.7 billion just for this purpose, there is still a long way to go toward solving the issue.

While private and public interests have made efforts over time to plug up and properly seal old wells so that they don’t leak harmful gasses and chemicals, about 2.6 million onshore wells remain unsealed according to a 2020 report from environmental watchdog Carbon Tracker. And those are just the ones that we know about. The report estimates that another 1.2 million undocumented wells exist nationwide. It’s projected that plugging just the 2.6 million wells we know about will cost a blistering $280 billion – meaning that the $4.7 billion allocated by the Bipartisan Infrastructure Law will barely make a dent.

What’s more, many of the wells that have been plugged are now bursting open. According to Reuters reporting in West Texas, “over the last two years, more and more abandoned wells have started to spill or even gushed geyser-like, formed salt and chemical-laden lakes or caused sinkholes.” There are several possible explanations for this phenomenon.

The first of which is that The Railroad Commission (RRC), which for some reason is the regulatory body that oversees oil and gas operations in Texas, has been doing a shoddy job on the sealing process. In the absence of a solvent owner of record for an abandoned oil and gas well, the RRC is legally responsible for its proper sealing.

The second major issue seems to be coming from increased underground pressure from the region’s shale boom. When hydraulic fracturing is used to extract oil and gas, huge quantities of water gush out of the well along with it. This salty ‘wastewater’ contains hazardous elements like radium and boron, and is largely pumped back into the ground. But if it’s pumped too deep, it risks triggering earthquakes. And if it’s pumped too shallow, underground pressure increases, and poorly sealed wells start to blow.

This has become a major issue in Texas, home to the Permian Basin, the heart of the U.S. shale revolution and the nation’s largest oilfield. Billions of gallons of wastewater have been injected into underground reservoirs there, and are likely contributing to the problem of previously plugged ‘zombie wells’ roaring back to life.

While the RRC has pushed back on reports that the problem of ‘zombie wells’ is widespread, and whether their connection to wastewater injections are empirically founded, scientific evidence for the connection is building – and so is public and private scrutiny. Indeed, the U.S. Environmental Protection Agency has said that it will investigate whether there is a need to revoke the RRC’s permitting authority for disposal wells for such wastewater in response to a federal complaint filed by Texas watchdog group Commission Shift.

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14 comments

  1. BeliTsari

    The effects of injection of produced water, while fracking scores-of-thousands more wells with cracked cement jobs, leaky annuals & casing has been discussed, forever. The current administration was installed partially to SAVE the fracking Ponzi scheme by cutting CHEAP Russian gas exports to EU’s AGW-mitigating industry. Methane is a pretty obvious explanation for our abrupt temperature increase, as it’s very likely cascading, as long predicted? As tech oilgarch’s distract with geo-engineering, carbon swaps & sequestration, bio fuel, GE monoculture agriculture & old fission reactor bail-outs, to monetize our fears of run-away shale industry methane release?

    Reply
  2. Ignacio

    According to this article (https://www.texasstandard.org/stories/texas-abandoned-oil-wells-plugging/) when the federal funds to cap wells started to flow the RRC reduced its own funding so that the yearly well capping went from 1400 to 2100 wells. Small increase there and the person interviewed in the article states that the RCC doesn’t care because they work with targets and they are fulfilling these targets. So, not the state managers, neither the federal ones are really wanting to solve a problem but only to tick boxes in a spreadsheet. This is so PMCish all over again.

    Reply
  3. PlutoniumKun

    More than a decade ago I was at a conference on oil and gas exploration, back when fracking was the big new thing. I well remember a very high level environmental scientist at a Q&A being asked what he thought the most serious problem with gas and tight oil fracking would be. Without hesitation he said ‘leakage from the post production wells’. He eleborated that it was technically very difficult to ensure that frack wells were fully capped and sealed after production and there was little to no interest in forcing the industry to do so. It’s not fully understood, even in the industry, just how difficult it is to cap a fracked well. It’s much more than just fitting a concrete cap. You have to seal it off at each geological layer and along each fracture line. Even the drillers themselves can rarely be certain that a subsurface seal is adequate and there is no way of knowing once the well is abandoned. At least, until it starts leaking into the atmosphere or into subsurface pathways.

    In decades to come, we may consider fracking to have been even more environmentally destructive than the coal industry, and that’s really saying something.

    Reply
    1. skippy

      Cough PK …. I posted long ago the fail rates on wells just based on concrete pour, even at high quality mix and workmanship/QC. Incentives are just the opposite. Anywho something like 5% in just a few years goes parabolic to 100% in less than 100 yrs.

      I mean is this a game considering the long term ideological biases on this sort of matter e.g. tell it to the passenger pigeon.

      Reply
    2. redleg

      I’ve been saying on this site for years that what comes out of a fracked well is far and away more of a problem than what is put into a fracked well. This is simply one more reason why.

      Having sealed flowing wells, the grout used is designed for the conditions in the well at the time it is sealed. Sometimes there’s a safety factor, but that’s viewed as extra cost. If the pressure in the reservoir increases the grout seal can fail. If the chemistry changes it can also cause the grout seal to fail.
      Steel casing can fail due to pressure and corrosion, causing an even mildly pressurized well to leak.
      Then there’s the annular space between casings. These are grouted during construction and can also fail, although not all of the casings are set in the reservoir. Most are not, but this doesn’t mean that they are not part of the problem.
      A well is a system of casings and grout (the developed hole can be included as well) that are constructed for the conditions encountered at the time of construction. If the conditions over time change for the worse, any part of a well system can fail, often below ground. A failed well can be due to several different components failing in ways that compound each other. The seal is simply one more component.

      That said I’d love to get billably involved with mappilg and sealing these.

      Reply
  4. none

    I don’t know, the US is ignoring some much more expensive problems than $280 billion… long covid for example, or climate change, etc. etc.

    Reply
  5. Candide

    Living in an area where the citizens have fairly successfully blocked the dangerous practice of fracking, it’s clear that claiming a future free of unfixable surprises has major rewards. Those of us who worked to block reckless action are equipped to push for capping the methane leaks that need remedies. Also…isn’t this a prime example of an “opportunity cost” of war spending and another reason to fight the racket that war is? A couple of billion in arms spending could do a lot of good if used instead, to diminish carbon leakage into the atmosphere.

    Reply
  6. Friendly

    Charging companies per well impact fees is one option for internalizing the legacy costs and providing needed revenue to (re)cap and seal abandoned wells – many of which are leaking methane.

    Reply
    1. Rip Van Winkle

      Closure / post-closure decommissioning, bonds or insurance, has been on the books 40 CFR for hazardous waste treatment, storage, disposal facilities since the ‘80s. Make that apply here.

      Reply
  7. James

    As a former Texan who has left the state, I say good luck to all those moving there and paying the exorbitant prices for real estate. This all reminds me of the 1986 and 1987 crash in Texas with the housing market falling through the floor and people losing everything. I was in a family in Real Estate so had first hand knowledge and it was related to the energy boom. I think it may take another 20 or so years but it will turn into an unmitigated disaster for everyone. Great update and article. Thank you as always for keeping us informed.

    Reply
  8. TomDority

    In the absence of a solvent owner of record for an abandoned oil and gas well – Well that says a lot…. mighty high priced lawyers are assembled to create and evade responsibility by contracting the (planned future insolvent owner of record) owner of record in a manner specifically designed to eliminate long-tail liability for any ‘securitized’ investment scheme. In other words, the structure is specifically designed to produce an “absence of a solvent owner of record” to avoid long-tail risk liability. Of course, this is my opinion and I am not a lawyer but, if it smells like bull-sh!t looks like bull-sh!t —it don’t take any more than and ordinary citizen to know not to eat it.
    I thought contracting for some scheme to avoid, or commit some fraudulent act, crime, harm to the public or designing a way to privately profit off the public dime—- I thought that the commission of these acts would not only vitiate the contract but pierce the corporate veil that these officers of the court have put in place – their further direction to specify or intimate, indirectly, where the fortunes made can be best deployed for PR and to get the legislators, Judges, politicians, lobbyists etal…….to persuade the public to eat Bull-sh!t . they would howl (indirectly- oh my we are a good corporate citizen that would never jeopardize the public health or trust).
    Well it’s all the same roadmap, the same cons, loopholes, usurpations, and all that Teddy, Theodore and numerous others fought….going back further to ancient Egypt, or, god using nepotism to give a restless fellow something to do – like when god put-up that restless fellow to toss some folks out on their asses from some temple – at least, so I heard through the grapevine – which is why I apologize for the unclear references and vagary .

    Reply

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