It Will Cost Up to $21.5 Billion to Clean Up California’s Oil Sites. The Industry Won’t Make Enough Money to Pay for It.

From Propublica (18-May-2023).

When you add externalities into the cost of fossils fuels, it’s not remotely close to a profitable business.

Cleaning up, plugging and decommissioning California’s old gas and oil wells will cost an estimated $21 billion, three times the industry’s projected future profits. And those costs don’t include cleaning methane and carbon dioxide from the atmosphere.

From the story:

“Compounding the problem, the industry has set aside only about $106 million that state regulators can use for cleanup when a company liquidates or otherwise walks away from its responsibilities, according to state data. That amount equals less than 1% of the estimated cost.”

And this, explaing how oil companies have already begun shirking their resonsibilities by off-loading their wells to smaller less capitalized companies:

As ProPublica reported last year, the major oil companies that long dominated in California and have the deep pockets necessary to pay for environmental cleanup are selling their wells and leaving the state, handing the task to smaller and less well-financed companies.

Roughly half of the wells drilled in California have changed hands through sales and bankruptcies since 2010, according to data Ferrar analyzed.

Smaller companies are often one bankruptcy away from their wells being orphaned, meaning they’re left to taxpayers as companies dissolve.