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

Nature Energy volume 8, pages 536–547 (2023)Cite this article

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Abstract

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.

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

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Data availability

With the exception of data from Enverus, all data are publicly available via Harvard Dataverse (https://doi.org/10.7910/DVN/EE4SLR). Commercial Enverus data were made available to us through Enverus’ academic programme.

Code availability

Replication code and data are available at Harvard Dataverse (https://doi.org/10.7910/DVN/EE4SLR).

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Acknowledgements

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

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Authors and Affiliations

  1. Department of Agricultural and Resource Economics, University of California Davis, Davis, CA, USA

    Mark Agerton

  2. Center for Energy Studies, Louisiana State University, Baton Rouge, LA, USA

    Siddhartha Narra & Gregory B. Upton Jr.

  3. Department of Environmental Sciences, Louisiana State University, Baton Rouge, LA, USA

    Brian Snyder

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Contributions

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.

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Correspondence to Mark Agerton.

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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). https://doi.org/10.1038/s41560-023-01248-1

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