14,000 Wells Abandoned in the Gulf of Mexico

Thousands of unplugged oil wells in the Gulf of Mexico continue to release methane and other substances harmful to the environment in offshore waters. A recent analysis published in Nature Energy estimates the cost of plugging and abandoning (P&A) these wells, including those in inland and wetland waters, to be around US$30 billion.

Offshore wells account for 90% of improperly abandoned wells and represent 25% of the overall costs associated with plugging and abandonment of inactive wells. Prioritizing policy efforts toward these wells could yield significant benefits and abandoning offshore wells tends to be more cost-effective, making them an ideal focus area. Additionally, these wells carry higher environmental risk, further underscoring the importance of addressing them as a top priority. 

The Environmental Protection Agency (EPA) reports that each orphaned well emits over 100kg of methane per year. Researcher Mary Kang of McGill University has identified instances of underground water contamination associated with these wells. Despite some emitting less methane, the full extent of orphaned wells' environmental impact remains uncertain, as underground effects could be equally harmful.

The responsibility for plugging and abandoning inactive and unplugged wells in federal waters falls on the previous owners of the wells. However, if the company that owns the well goes bankrupt, the federal government assumes responsibility for P&A. Nonetheless, according to the study, “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.”

Last year, the issue of inactive wells drew attention as the US government allocated US$4.7 billion to deploy a federal program to take care of orphaned wells. Plugging wells in shallow waters would cost approximately US$7 billion.

PEMEX to Plug and Abandon 940 Orphan Wells

PEMEX has recently announced that it plans to plug and abandon a total of 940 orphaned wells by 2024. The company has stated that it will prioritize wells with higher environmental risks to nearby populations and water bodies. PEMEX also acknowledged in a press release that inadequate investment to mitigate risks in its assets has led to an increase in improperly abandoned inactive installations.