Drilled Big Oil's Multi-Billion-Dollar Blind Spot
Jun 18, 2020
Experts Rob Schuwerk and Greg Rogers reveal the shocking underestimation of costs for plugging and abandoning oil and gas wells, especially fracking ones. They discuss the impact of COVID-19 on the industry and who will bear the financial burden.
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Shale Plugging Costs Vastly Underestimated
- Carbon Tracker found plugging shale wells can cost up to 10 times industry estimates, creating huge unrecognized liabilities.
- Many shale companies lack these costs on their books while already facing tight finances.
Depth Drives Exponential Cost Growth
- Industry and regulators referenced orphan well costs (very shallow) to justify low estimates for modern shale wells.
- International data and deeper-well records show cost rises exponentially with depth, not linearly.
Orphan Well Data Misused As Benchmark
- States' orphan well programs supplied cost data that industry used to justify low remediation estimates.
- Those orphan wells were typically old, shallow, and not representative of deep shale wells.