Adding insult to injury, states that rely on the energy sector for tax revenue could instead be facing huge liabilities.
Carbon finance website Carbon Tracker estimates that 2.6 million oil wells in the U.S. could need to be capped and cleaned up as energy prices fall and consumers move to other fuel sources. The companies that drilled and own the wells bear the responsibility for capping and clean up, but many of those firms are going bankrupt.
They must post surety bonds when drilling so that if they run out of money the sites can be handled, but the bonds amount to about 1% of what Carbon Tracker estimates to be the true cost.
To make things worse Carbon Tracker estimates there could be more than one million additional wells that will need to be capped and cleaned up.
The liability doesn’t flow to the federal government, it is handled at the state level. Texas could be on the hook for $117 billion, followed by Oklahoma at more than $30 billion.