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Failure to properly plug and abandon (P&A) oil and gas wells in the United States at the end of their useful life can impose environmental costs and saddle taxpayers with cleanup liabilities. In recent years, US policy makers have expressed increasing concern about P&A issues, especially when it comes to “orphan” wells—oil and natural gas wells, either onshore or in state waters, for which no viable private company with legal responsibility exists. Prior studies of orphan wells have primarily focused on onshore wells, likely because they vastly outnumber offshore wells. But offshore wells have particular features that warrant careful study on their own: they tend to produce more, involve additional environmental and engineering considerations, and cost more to P&A.
This report, part of an oil and gas research initiative at Columbia University’s Center on Global Energy Policy, examines offshore P&A liabilities to provide guidance to federal policy makers about the scope of a hypothetical government program to plug and abandon offshore wells. At least three objectives might shape the contours of such a policy: 1) reducing taxpayers’ future financial P&A liability for orphan wells, 2) reducing environmental risk, and 3) preserving or increasing employment alongside goals to reduce greenhouse gas emissions globally.
As of the end of 2020, approximately 22,000 offshore oil and gas wells in the United States were not permanently P&Aed. The authors estimate that the cost to P&A all of these wells, including wells that are currently producing, is approximately $47 billion. It should be noted that significant uncertainty remains around aggregate costs, because estimates rely on having accurate information from state and federal well databases as to the number and location of offshore wells as well as average P&A costs per well.
Additional findings from the report include the following:
This report examines the prospects of supplying gas from the Eastern Mediterranean to Europe from a technical, geopolitical, and economic perspective.
On January 25, 2023, the Center on Global Energy Policy (CGEP), Columbia University SIPA, hosted...
Achieving the goal of net-zero greenhouse gas emissions by 2050 requires a substantial reduction in the share of high-emitting fossil fuels in primary energy consumption.
On October 11, 2022, Columbia University’s Center on Global Energy Policy convened a roundtable to discuss whether there is access to adequate financing for oil and gas assets to meet energy security and affordability needs during the transition to net-zero emissions.