One family's disheartening and ultimately devastating fight with an oil and gas company typifies the industry's ability to skirt regulations and escape accountability.
What's happening?
The Ledgerwoods of Oklahoma, who have owned 230 acres outside Maysville for more than 100 years, had long lived with oil wells on their property, as ProPublica reported. In 2017, a repurposed well leaked brine, contaminating 2 acres with salt- and chloride-heavy water.
The chloride levels in their drinking water and soil were more than 12 times the state-regulated level and five times the level the EPA considers safe. They had to start buying bottled water, lost income and their retirement plans, and — after cleanup work failed to produce results — sold the land, which had been appraised at $1 million, for $450,000.
A lawsuit against the company, Southcreek Petroleum Co. LLC, went nowhere because the business declared bankruptcy, even stating in court papers that executives did so "to avoid legal fees associated with the Ledgerwoods' suit," according to ProPublica.
Why is an oil company's declaring bankruptcy important?
U.S. Sen. Jeff Merkley, D-Ore., is trying to close this loophole. ProPublica reported that he has a bill in the works to change the Bankruptcy Code so that, among other things, company officials cannot deploy golden parachutes before ditching their liabilities.
"They privatize the profits, and then they dump the costs on the taxpayer, which is an outrageous arrangement that needs to end," Merkley told ProPublica. "This is not just one company in one place. This is a practice that has been exquisitely developed by the industry."
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In Oklahoma, bonding is supposed to ensure companies plug their wells, as ProPublica detailed. If they don't, they forfeit the bond. But $25,000 can cover every well a company has, no matter how many. If the company is worth $50,000, it doesn't even have to purchase a bond.
So, there's a huge gap in funding to plug orphaned wells. Oklahoma has more unplugged wells, 260,000, than any state but Texas — but only $45 million to plug them. It will cost around $7.3 billion, all per ProPublica.
"It's clear that abandoning wells and leaving communities and taxpayers to foot the bill to clean them up is baked into the oil and gas industry business model," said Sierra Club senior attorney Peter Morgan, who also called the bonds "shockingly inadequate."
What's being done about orphaned wells?
A bill to create tiered bonds and increase the limit to $150,000 failed to receive a vote in the Oklahoma Senate, even though it passed both houses unanimously, ProPublica reported.
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Texas recently received $80 million in federal funding to plug orphaned wells, but wells are leaking all over the country, including in a Montana national park. Though some companies are on the case, including ClimateWells, ending the problem will require government action and the corporations taking accountability.
Editor's note: A previous version of this article credited Grist for the original reporting rather than ProPublica, whose story had been published in syndication on the Grist website. We regret the error.
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