Cost Of Cleaning Abandoned Oil Wells Could Shift To Taxpayers

Posted at 7:56 PM, Oct 27, 2016

There's oil in Tennessee. Companies have drilled thousands of wells across the state, but sometimes those companies go out of business because they can't find oil or prices drop.

NewsChannel 5 Investigates discovered the cost of cleaning up the mess they leave behind may be shifted to taxpayers.

The state is aware of up to 4,000 abandoned oil and gas wells across Tennessee.

Sometimes when companies don't strike it rich they simply walk away, abandoning the well.

W.B. Melton had one of those abandoned wells on his farm in Overton County.

The company left the well's casing and an 1800 foot hole with direct access to the groundwater.

It was there when he bought the land.

"The state evidently has drug their feet on plugging the wells or telling people to plug them," Melton said.

If they are not plugged the wells can pollute the groundwater and pump methane into the atmosphere.

The Sierra Club has urged the state to make them safe by pumping cement deep underground into the well, but that takes money.

The average cost is $3000 per well.

"We're very concerned localized health impacts could be huge," said Scott Banbury with the Sierra Club.
State officials admit there's a problem.

"It's important to address all of these abandoned wells that need to be plugged and the groundwater protected," said Mike Burton with the Tennessee Department of Environment and Conservation.

The state is spending nearly a half million dollars capping wells this fiscal year.

That money has come from the oil companies, but it's running out.

NewsChannel 5 Investigates asked, "Are you going to run out of money to do this?"

Mike Burton said, "Probably. For the older wells I'd say that would be true."

It means taxpayers will be on the hook for the clean-up.

Companies had to put down bond money when they first received their permits.

It was supposed to cover the cost of capping a well if it's abandoned, but for years companies put multiple wells on one bond.

NewsChannel 5 Investigates asked, "They just walked away from a well and didn't plug and left it to the state. Do you see that?

Mike Burton with TDEC responded, "Oh yes."

Just this year the state sent notices to owners of more 60 abandoned wells - but often could not find them.
Berry Resources abandoned 25 wells in Tennessee.

It went out of business after Kentucky fined the company for "defrauding investors."

Tennessee officials said they could not find anyone with the company to cover the true cost of plugging the wells.
"Where those operators have gone bankrupt or disappeared or passed away, it's on us," said Scott Banbury.
The Sierra Club will push the legislature to increase bonds for future oil and gas drilling.

Banbury said if companies want to drill for oil, they should not force taxpayers to cover the cost when things go bad.

"It was expected they were going to be responsible in their operation, and if that falls on the taxpayer, that's just not right," Banbury said.