Cleaning up the tens of thousands oil and gas wells on U.S. federal land after they stop producing could cost over $6 billion, and taxpayers may need to pitch in, according to an analysis of state and federal data commissioned by a conservation watchdog group.
The Interior Department requires oil and gas companies to post reclamation bonds of $10,000 per well when they drill on federal land, to ensure that wells are cleaned up once they are retired or if a company goes bankrupt.
The report estimated, however, that the average cost of a well reclamation is now $65,200, with deeper wells that are becoming more common due to improved drilling technology costing around $100,000 to clean up.
Typically, if a company does not reclaim a well site, its bond is forfeited. If the bond is not enough to cover the cleanup, the government pays the difference.
LINK (via: Reuters)
