A fracked planet
Three workers died a fourth worker sustained “catastrophic and permanent” injuries, according to a lawsuit he later filed.Ĭhesapeake Energy, which declared bankruptcy last month after paying out executive bonuses, might also be environmentally insolvent, Mr. This past January, a crew of engineers was upgrading a well head at a Chesapeake Energy site in east central Texas when leaking natural gas ignited. The bankruptcies have painful consequences for some employees as well. frackers now heading for bankruptcy were insolvent before Covid-19” if environmental liabilities were properly accounted for, he said. “It may be the case that many of the U.S. the $8.5 million in consulting fees, could require more than $40 million to clean up its 140 wells if they are permanently closed, according to an analysis by Greg Rogers, a co-author of the report and a former adviser to BP and its auditors, Ernst & Young.Įxtraction Oil & Gas’s cleanup costs for its 1,000 wells could exceed $200 million, in excess of its reported liabilities, Mr. Without action, she said, the country “can expect to face an orphan well crisis with billions of dollars in taxpayer liability, with thousands of Americans forced to live with leaking orphaned wells.”Ī recent report by Carbon Tracker estimated that the cost to plug a typical shale well is close to $300,000 - far higher than the estimates used by companies, regulators and financial analysts - because the wells are far deeper than conventional ones.īased on the new estimates, MDC, the company that paid its C.E.O. “These sites often include leaking tanks and pipelines, unremediated spills, damaged fencing, noxious weeds, erosion and other hazards that pose risks,” Sara Kendall, a program director at the Western Organization of Resource Councils, a network of community groups, said at a recent congressional hearing. In New Mexico, officials have identified 708 orphaned wells, and “there is the risk for many more,” said Adrienne Sandoval, oil conservation director at the New Mexico Energy, Minerals and Natural Resources Department. North Dakota, in the heart of fracking country, has gone from zero to 336 so-called abandoned “orphan” wells in just the past two months.
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Wells Become ‘Orphaned’Īcross the country, wells are already being abandoned. The Colorado site was equipped with “air monitoring equipment and some of the best available technology,” and the company had the appropriate financial reserves to meet environmental obligations, said Brian Cain, a company spokesman. Extraction disputed the findings and said a state study showed far fewer incidents of exposure using a different methodology that considered shorter term exposure levels.Įxtraction Oil & Gas has said it offered key employees bonuses after determining that its previous compensation was “ineffective in motivating and incentivizing” them, and that its operations will continue as normal through its restructuring process. Patricia Garcia Nelson, whose 7-year-old son attends school on grounds just 700 feet away from one of the company’s fracking sites in Greeley, Colo., fears the site will now be neglected.Īir pollution monitors at the school, which serves a fast-growing immigrant community, have shown that, over a period of about seven months last year, there were more than 100 periods of elevated levels of benzene, a toxic compound that can cause blood cancers such as leukemia, according to research commissioned by the environmental group 350 Colorado that examined exposures over eight-hour periods. Three days later, it filed for bankruptcy protection. Costly Environmental Tollĭenver’s Extraction Oil & Gas, founded at the start of the shale oil boom in 2012, paid 18 officers and key employees a combined $6.7 million in “retention agreements” last month. “These are the same managers who ran these companies into bankruptcy to begin with,” she said. “It seems outrageous that these executives pay themselves before filing for bankruptcy,” said Kathy Hipple, an analyst at the Institute for Energy Economics and Financial Analysis and a finance professor at Bard College.
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Then it won approval from a bankruptcy judge to pay its executives the same amount, as cash incentives. And Diamond Offshore Drilling secured a $9.7 million tax refund under the Covid-19 stimulus bill Congress passed in March, before filing to reorganize in bankruptcy court the next month. Chesapeake Energy, a shale pioneer, declared bankruptcy last month, just weeks after it paid $25 million in bonuses to a group of executives. Whiting Petroleum, a major shale driller in North Dakota that sought bankruptcy protection in April, approved almost $15 million in cash bonuses for its top executives six days before its bankruptcy filing. Still, as these businesses collapse, millions of dollars have flowed to executive compensation.