Oil Bust Leaves States With Massive Well Cleanup
Source: Associated Press
Oil Bust Leaves States With Massive Well Cleanup
By PAUL J. WEBER, ASSOCIATED PRESS BIGFOOT, Texas — Jun 19, 2016, 10:29 AM ET
The worst oil bust since the 1980s is putting Texas and other oil producing states on the hook for thousands of newly abandoned drilling sites at a time when they have little money to plug wells and seal off environmental hazards.
As U.S. rig counts plunge to historic lows, and with at least 60 oil producers declaring bankruptcy since 2014, energy-producing states are confronting both holes in their budgets and potentially leaking ones in the ground. In Texas alone, the roughly $165 million price tag of plugging nearly 10,000 abandoned wells is double the entire budget of the agency that regulates the industry.
The problem is forcing states to get creative: Texas regulators now want taxpayers to cover more of the clean-up, supplementing industry payments. Wyoming and Louisiana are riling drillers with steeper fees. Oklahoma is reshuffling money among agencies in the face of a $1.1 billion state budget shortfall, while regulators also grapple with earthquakes linked to oil and gas activities.
"As downtown turns go, this one happened faster and accelerated. It moved downward faster than the big downturn we had in the '80s," said John Graves, a Houston oil consultant. "For some people in our industry, it's been more intense." Crude prices that peaked above $100 a barrel in 2014 plunged by 60 percent in just six months.
But these responses — if they even wind up working — are still years from meeting the growing backlog of untended wells. ...
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Read more: http://abcnews.go.com/Politics/wireStory/oil-bust-leaves-states-massive-cleanup-39969993
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