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After a decade of racking up immense debt, oil and gas companies in the West have been crushed by the coronavirus pandemic and economic downturn. Major drillers, including Chesapeake and Extraction Oil and Gas, have filed for bankruptcy, and analysis suggests another 250 companies could file for protection by the end of next year. These bankruptcies won't just impact laid off workers and investors, they could leave behind leaking pipes and orphaned wells—abandoned operations to be cleaned up at taxpayer expense—that communities will deal with for years to come.
In New Mexico, regulators say up to 70 percent of the state's 57,000 wells could become uneconomic and either shut-in or orphaned if oil prices do not rebound. Remarkably, the Bureau of Land Management does not have a database of orphaned wells or a systematic way to track them, making it difficult to even assess the problem. When orphaned wells are identified, state and federal agencies do not have adequate funds to reclaim each well, thanks to outdated bonding rates set more than 60 years ago.
While workers and nearby communities will feel the sting of these bankruptcies, oil and gas CEOs are apparently not. An analysis by the New York Times finds companies that recently filed for bankruptcy gave executives millions in bonuses just prior to shedding and restructuring debt, softening the blow for them while deepening the hole for impacted communities.
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We should mount a historic campaign to invest in forward-looking economic drivers like our public lands. This proposition is a win-win: each of these investments will fuel economic recovery and create a cleaner and healthier future for our children, so they too can enjoy the beauty of this great nation.”
