Skip to main content

Thank you for visiting You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

Financial liabilities and environmental implications of unplugged wells for the Gulf of Mexico and coastal waters


Plugging and abandoning (P&Aing) wells is a policy priority because unplugged wells present potential financial and environmental risks to the public. Offshore wells, compared with land wells, generally produce more, cost more to P&A and present different environmental risks. Here we estimate that the cost to P&A all 14,000 unplugged, non-producing wells in US Gulf of Mexico offshore waters, inland waters and wetlands is US$30 billion. Wells in shallower waters closer to shore make up 90% of inactive wells but only 25% of total P&A costs. They also present larger environmental risks. Prior owners of wells in federal waters (deeper and farther from shore) can be held liable for P&A costs if the current owner does not P&A them. We find that 88% of outstanding P&A liability in federal waters is associated with wells currently or formerly owned by one of the large, financially stable ‘supermajor’ companies.

This is a preview of subscription content, access via your institution

Access options

Rent or buy this article

Get just this article for as long as you need it


Prices may be subject to local taxes which are calculated during checkout

Fig. 1: Cumulative probability well resumes production within s months after pausing production.

Data availability

With the exception of data from Enverus, all data are publicly available via Harvard Dataverse ( Commercial Enverus data were made available to us through Enverus’ academic programme.

Code availability

Replication code and data are available at Harvard Dataverse (


  1. Statistical Review of World Energy (BP, 2022).

  2. Kaiser, M. J. & Pulsipher, A. G. Idle Iron in the Gulf of Mexico (US Department of the Interior, Minerals Management Service, 2007).

  3. Muehlenbachs, L. A dynamic model of cleanup: estimating sunk costs in oil and gas production. Int. Econ. Rev. 56, 155–185 (2015).

    Article  MATH  Google Scholar 

  4. Alboiu, V. & Walker, T. R. Pollution, management, and mitigation of idle and orphaned oil and gas wells in Alberta, Canada. Environ. Monit. Assess. 191, 611 (2019).

    Article  Google Scholar 

  5. Ide, S. T., Friedmann, S. J. & Herzog, H. J. CO2 leakage through existing wells: current technology and regulations. In 8th International Conference on Greenhouse Gas Control Technologies 19–22 (International Energy Agency Greenhouse Gas R&D Programme, 2006).

  6. Pekney, N. J. et al. Measurement of methane emissions from abandoned oil and gas wells in Hillman State Park, Pennsylvania. Carbon Manage. 9, 165–175 (2018).

    Article  Google Scholar 

  7. Finch, B. E., Marzooghi, S., Toro, D. M. D. & Stubblefield, W. A. Phototoxic potential of undispersed and dispersed fresh and weathered Macondo crude oils to Gulf of Mexico marine organisms. Environ. Toxicol. Chem. 36, 2640–2650 (2017).

    Article  Google Scholar 

  8. Stefansson, E. S. et al. Acute effects of non-weathered and weathered crude oil and dispersant associated with the Deepwater Horizon incident on the development of marine bivalve and echinoderm larvae. Environ. Toxicol. Chem. 35, 2016–2028 (2016).

    Article  Google Scholar 

  9. Faksness, L.-G., Altin, D., Nordtug, T., Daling, P. S. & Hansen, B. H. Chemical comparison and acute toxicity of water accommodated fraction (WAF) of source and field collected Macondo oils from the Deepwater Horizon spill. Mar. Pollut. Bull. 91, 222–229 (2015).

    Article  Google Scholar 

  10. Martínez-Gómez, C. et al. A guide to toxicity assessment and monitoring effects at lower levels of biological organization following marine oil spills in European waters. ICES J. Mar. Sci. 67, 1105–1118 (2010).

    Article  Google Scholar 

  11. Lin, Q. & Mendelssohn, I. A. Impacts and recovery of the Deepwater Horizon oil spill on vegetation structure and function of coastal salt marshes in the northern Gulf of Mexico. Environ. Sci. Technol. 46, 3737–3743 (2012).

    Article  Google Scholar 

  12. Esbaugh, A. J. et al. The effects of weathering and chemical dispersion on Deepwater Horizon crude oil toxicity to mahi-mahi (Coryphaena hippurus) early life stages. Sci. Total Environ. 543, 644–651 (2016).

    Article  Google Scholar 

  13. Heintz, R. A., Short, J. W. & Rice, S. D. Sensitivity of fish embryos to weathered crude oil: part II. Increased mortality of pink salmon (Oncorhynchus gorbuscha) embryos incubating downstream from weathered Exxon Valdez crude oil. Environ. Toxicol. Chem. 18, 494–503 (1999).

    Article  Google Scholar 

  14. Anderson, C. J. & Hess, T. A. The effects of oil exposure and weathering on black-needle rush (Juncus roemerianus) marshes along the Gulf of Mexico. Mar. Pollut. Bull. 64, 2749–2755 (2012).

    Article  Google Scholar 

  15. Pezeshki, S. R. & Delaune, R. D. United States Gulf of Mexico coastal marsh vegetation responses and sensitivities to oil spill: a review. Environments 2, 586–607 (2015).

    Article  Google Scholar 

  16. Mendelssohn, I. A. et al. Oil impacts on coastal wetlands: implications for the Mississippi River Delta ecosystem after the Deepwater Horizon oil spill. BioScience 62, 562–574 (2012).

    Article  Google Scholar 

  17. Valentine, D. L. et al. Fallout plume of submerged oil from Deepwater Horizon. Proc. Natl Acad. Sci. USA 111, 15906–15911 (2014).

    Article  Google Scholar 

  18. Passow, U. & Stout, S. A. Character and sedimentation of “lingering” Macondo oil to the deep-sea after the Deepwater Horizon oil spill. Mar. Chem. 218, 103733 (2020).

    Article  Google Scholar 

  19. Montagna, P. A. et al. Deep-sea benthic footprint of the Deepwater Horizon blowout. PLoS ONE 8, e70540 (2013).

    Article  Google Scholar 

  20. White, H. K. et al. Impact of the Deepwater Horizon oil spill on a deep-water coral community in the Gulf of Mexico. Proc. Natl Acad. Sci. USA 109, 20303–20308 (2012).

    Article  Google Scholar 

  21. Joye, S. B., Teske, A. P. & Kostka, J. E. Microbial dynamics following the Macondo oil well blowout across Gulf of Mexico environments. Bioscience 64, 766–777 (2014).

    Article  Google Scholar 

  22. Crespo-Medina, M. et al. The rise and fall of methanotrophy following a deepwater oil-well blowout. Nat. Geosci. 7, 423–427 (2014).

    Article  Google Scholar 

  23. Römer, M. et al. Amount and fate of gas and oil discharged at 3,400 m water depth from a natural seep site in the southern Gulf of Mexico. Front. Mar. Sci. 6, 700 (2019).

    Article  Google Scholar 

  24. Valentine, D. L. et al. Propane respiration jump-starts microbial response to a deep oil spill. Science 330, 208–211 (2010).

    Article  Google Scholar 

  25. Negron, A. M. G., Kort, E. A., Conley, S. A. & Smith, M. L. Airborne assessment of methane emissions from offshore platforms in the U.S. Gulf of Mexico. Environ. Sci. Technol. 54, 5112–5120 (2020).

    Article  Google Scholar 

  26. Yacovitch, T. I., Daube, C. & Herndon, S. C. Methane emissions from offshore oil and gas platforms in the Gulf of Mexico. Environ. Sci. Technol. 54, 3530–3538 (2020).

    Article  Google Scholar 

  27. Ayasse, A. K. et al. Methane remote sensing and emission quantification of offshore shallow water oil and gas platforms in the Gulf of Mexico. Environ. Res. Lett. 17, 084039 (2022).

    Article  Google Scholar 

  28. Böttner, C. et al. Greenhouse gas emissions from marine decommissioned hydrocarbon wells: leakage detection, monitoring and mitigation strategies. Int. J. Greenhouse Gas Control 100, 103119 (2020).

    Article  Google Scholar 

  29. Kang, M. et al. Direct measurements of methane emissions from abandoned oil and gas wells in Pennsylvania. Proc. Natl Acad. Sci. USA 111, 18173–18177 (2014).

    Article  Google Scholar 

  30. Lebel, E. D. et al. Methane emissions from abandoned oil and gas wells in California. Environ. Sci. Technol. 54, 14617–14626 (2020).

    Article  Google Scholar 

  31. Williams, J. P., Regehr, A. & Kang, M. Methane emissions from abandoned oil and gas wells in Canada and the United States. Environ. Sci. Technol. 55, 563–570 (2021).

    Article  Google Scholar 

  32. Shavell, S. The judgment proof problem. Int. Rev. Law Econ. 6, 45–58 (1986).

    Article  Google Scholar 

  33. Boomhower, J. Drilling like there’s no tomorrow: bankruptcy, insurance, and environmental risk. Am. Econ. Rev. 109, 391–426 (2019).

    Article  Google Scholar 

  34. Boyd, J. Financial responsibility for environmental obligations: are bonding and assurance rules fulfilling their promise? Preprint at SSRN (2001).

  35. Davis, L. W. Bonding requirements for U.S. natural gas producers. Rev. Environ. Econ. Policy 9, 128–144 (2015).

    Article  Google Scholar 

  36. Gerard, D. The law and economics of reclamation bonds. Resour. Policy 26, 189–197. (2000).

    Article  Google Scholar 

  37. Shogren, J. F., Herriges, J. A. & Govindasamy, R. Limits to environmental bonds. Ecol. Econ. 8, 109–133 (1993).

    Article  Google Scholar 

  38. Oil and Gas: Bureau of Land Management Should Address Risks from Insufficient Bonds to Reclaim Wells (GAO, 2019).

  39. Ho, J. S., Shih, J.-S., Muehlenbachs, L. A., Munnings, C. & Krupnick, A. J. Managing environmental liability: an evaluation of bonding requirements for oil and gas wells in the United States. Environ. Sci. Technol. 52, 3908–3916. (2018).

    Article  Google Scholar 

  40. Purpera, D. G. Performance Audit. Audit Control #40120061. Office of Conservation, Department of Natural Resources Oil and Gas Regulation and Orphaned Wells (Louisiana Legislative Auditor, 2014);$FILE/000010BC.pdf

  41. Raimi, D., Krupnick, A. J., Shah, J.-S. & Thompson, A. Decommissioning orphaned and abandoned oil and gas wells: new estimates and cost drivers. Environ. Sci. Technol. 55, 10224–10230 (2021).

    Article  Google Scholar 

  42. Isgur, M. Fieldwood Energy LLC and The Official Committee of Unsecured Creditors. Case No. 20-33948 (United States Bankruptcy Court for the Southern District of Texas, 2021).

  43. Idle and Orphan Oil and Gas Wells: State and Provincial Strategies (IOGCC, 2019).

  44. Idle and Orphan Oil and Gas Wells: State and Provincial Strategies Supplemental Information (IOGCC, 2020).

  45. Idle and Orphan Oil and Gas Wells: State and Provincial Regulatory Strategies 2021 (IOGCC, 2021).

  46. Raimi, D., Nerurkar, N. & Bordoff, J. Green Stimulus for Oil and Gas Workers: Considering a Major Federal Effort to Plug Orphaned and Abandoned Wells (Resources for the Future and Center for Energy Policy at Columbia University, 2020).

  47. Kang, M. et al. Orphaned oil and gas well stimulus—maximizing economic and environmental benefits. Elem. Sci. Anth. 9, 00161 (2021).

    Article  Google Scholar 

  48. Boomhower, J. Orphan Wells in California: An Initial Assessment of the State’s Potential Liabilities to Plug and Decommission Orphan Oil and Gas Wells (California Council on Science and Technology, 2018).

  49. Andersen, M. & Coupal, R. Economic issues and policies affecting reclamation in Wyoming’s oil and gas industry. J. Am. Soc. Min. Reclam. 2009, 1–17 (2009).

    Google Scholar 

  50. Cook, K. A. An “Inescapable Obligation”–The Treatment of Well Decommissioning Liability in Recent Oil and Gas Bankruptcies. MSc thesis, Univ. of Texas at Austin (2019).

  51. Dachis, B., Shaffer, B. & Thivierge, V. All’s Well That Ends Well: Addressing End-of-Life Liabilities for Oil and Gas Wells (C.D. Howe Institute, 2017).

  52. Gardner, G. Inactive Oil and Gas Wells on Federal Lands and Minerals: Potential Costs and Conflicts (The National Wildlife Federation and Public Land Solutions, 2021).

  53. Kang, M. et al. Identification and characterization of high methane-emitting abandoned oil and gas wells. Proc. Natl Acad. Sci. USA 113, 13636–13641 (2016).

    Article  Google Scholar 

  54. Kang, M., Mauzerall, D. L., Ma, D. Z. & Celia, M. A. Reducing methane emissions from abandoned oil and gas wells: strategies and costs. Energy Policy 132, 594–601 (2019).

    Article  Google Scholar 

  55. CalGem SB 1147 Report: Offshore Oil & Gas Operations Abandonment (California Geologic Energy Management Division, 2022).

  56. Braslow, L. D. Coastal petroleum’s fight to drill off Florida’s Gulf Coast. J. Land Use Environ. Law 12, 343–381 (1997).

    Google Scholar 

  57. Reporting Requirements for Decommissioning Expenditures on the OCS (BSEE, 2016).

  58. Kaiser, M. J. Rigless well abandonment remediation in the shallow water U.S. Gulf of Mexico. J. Pet. Sci. Eng. 151, 94–115 (2017).

    Article  Google Scholar 

  59. Moeinikia, F., Fjelde, K. K., Saasen, A. & Vrålstad, T. An investigation of different approaches for probabilistic cost and time estimation of rigless P&A in subsea multi-well campaign. In SPE Bergen One Day Seminar (OnePetro, 2014).

  60. Moeinikia, F., Fjelde, K. K., Sørbø, J., Saasen, A. & Vrålstad, T. A study of possible solutions for cost efficient subsea well abandonment. In ASME 2015 34th International Conference on Ocean, Offshore and Arctic Engineering (American Society of Mechanical Engineers Digital Collection, 2015).

  61. Øia, T. M., Aarlott, M. M. & Vrålstad, T. Innovative approaches for full subsea P&A create new opportunities and cost benefits. In SPE Norway One Day Seminar (OnePetro, 2018).

  62. Vrålstad, T. et al. Plug & abandonment of offshore wells: ensuring long-term well integrity and cost-efficiency. J. Pet. Sci. Eng. 173, 478–491 (2019).

    Article  Google Scholar 

  63. Bakker, S., Vrålstad, T. & Tomasgard, A. An optimization model for the planning of offshore plug and abandonment campaigns. J. Pet. Sci. Eng. 180, 369–379 (2019).

    Article  Google Scholar 

  64. Bakker, S. J., Wang, A. & Gounaris, C. E. Vehicle routing with endogenous learning: application to offshore plug and abandonment campaign planning. Eur. J. Oper. Res. 289, 93–106 (2021).

    Article  MathSciNet  MATH  Google Scholar 

  65. Vreugdenhil, N. Booms, Busts, and Mismatch in Capital Markets: Evidence from the Offshore Oil and Gas Industry (2020).

  66. Kaiser, M. J. Offshore decommissioning cost estimation in the Gulf of Mexico. J. Constr. Eng. Manage. 132, 249–258 (2006).

    Article  Google Scholar 

  67. Kaplan, E. L. & Meier, P. Nonparametric estimation from incomplete observations. J. Am. Stat. Assoc. 53, 457–481 (1958).

    Article  MathSciNet  MATH  Google Scholar 

Download references


We thank the Center for Global Energy Policy at Columbia University for supporting this work.

Author information

Authors and Affiliations



M.A. and G.B.U. conceived the paper, analysed data and wrote the manuscript. B.S. wrote the manuscript. S.N. analysed data and wrote the manuscript.

Corresponding author

Correspondence to Mark Agerton.

Ethics declarations

Competing interests

The authors declare no competing interests.

Peer review

Peer review information

Nature Energy thanks Steffen Bakker, Charles Mason, Daniel Raimi and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.

Additional information

Publisher’s note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary information

Supplementary Information

Supplementary Figs. 1 and 2.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and Permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Agerton, M., Narra, S., Snyder, B. et al. Financial liabilities and environmental implications of unplugged wells for the Gulf of Mexico and coastal waters. Nat Energy 8, 536–547 (2023).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:

This article is cited by


Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing