A report entitled 'Protecting the Ocean and Taxpayers by Strengthenening Standards for Offshore Oil and Gas Decommissioning,' that was released during the end of last year, provides a comprehensive outlook at the state of offshore oil and gas decommissioning in the Gulf of Mexico, the growing consequences of the failing regulatory system, and policy changes to address them.
As of 2023, the federal waters of the Gulf of Mexico contained roughly 2,700 wells and 500 platforms that were overdue for decommissioning and considered delinquent. This idle and deteriorating infrastructure in the ocean is a growing risk to the environment and wildlife, and a growing risk to taxpayers if the government is forced to use tax dollars to cover cleanup costs. Risks associated with delinquent oil wells include oil spills which not only pose a major risk to the environment and wildlife, but are also a growing risk to taxpayers if the government is forced to use tax dollars to cover cleanup costs.
An analysis by Ocean Conservancy found that if the challenges with decommissioning policy are not fixed and the backlog is not addressed, the number of overdue wells in need of decommissioning could nearly double by 2030, ballooning to more than 5,000 wells.
“Experts estimate the cost to decommission all Gulf of Mexico oil and gas infrastructure–including active and idle– could be anywhere from US$40mn to US$70bn. Meanwhile, the federal system that governs offshore decommissioning is plagued by widespread and substantial shortcomings,” said Andrew Hartsig, an expert on offshore oil and gas policy and senior director of Arctic Conservation at Ocean Conservancy. “We need to make changes before this already-failing system comes under more strain and leaves taxpayers footing the bill.”
