Full Title: Green Stimulus for Oil and Gas Workers: Considering a Major Federal Effort to Plug Orphaned and Abandoned Wells
Author(s): Daniel Raimi, Neelesh Nerurkar, & Jason Bordof
Publisher(s): Columbia University Center on Global Energy Policy
Publication Date: July 20, 2020
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The global economic damages wrought by COVID-19 have dramatically magnified the suffering caused by the deadly virus. US lawmakers have already approved $3 trillion in aid to help offset the economic damage, and additional measures are under consideration. At the same time, the need to invest trillions in economic recovery has prompted calls to “build back better” by making the recovery a greener, less carbon-intensive one.
This paper, a joint effort between Resources for the Future and the Center on Global Energy Policy at Columbia University, examines the potential to boost US employment in the oil and gas workforce while also reducing pollution through a federal program to plug orphaned and abandoned oil and gas wells. These wells can leak methane and other pollutants that contribute to climate change, poor air quality, and other health and environmental risks. This research included interviews with key regulatory and industry officials to present the most up-to-date information on this rapidly evolving issue.
While states and the federal government fund well plugging activities through bonding requirements, industry fees, and other sources, these funds have not historically been adequate to reduce the inventory of orphan unplugged wells. Many of these sites date back to the 19th and early 20th centuries, when regulations including bonding requirements were weak or, in many cases, nonexistent. Estimates for the total number of orphaned and abandoned wells range from several hundred thousand to 3 million, depending on the definition of such wells needing attention. At the same time the oil and gas industry, which has seen employment drop to levels not seen since 2006, appears able to scale up to carry out this work. Labor and equipment are readily available due to the low oil price environment created by the collapse in demand from the coronavirus.