United States

True Costs

 
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About the Project

All oil and gas projects have associated cleanup costs—environmental debts owed by law to the public in exchange for the license to drill—but the industry's reported numbers are underestimated to pennies on the dollar. This accounting misrepresentation makes companies appear healthy, allowing them to continue borrowing money, drilling wells and creating additional hidden liabilities in the process.

We’re eager to see oil and gas replaced with renewables, but as the transition accelerates, what will happen when companies or even the entire industry crashes? Someone is going to pay for cleanup, and without rapid corrective action, the lion’s share of these costs will fall on taxpayers and investors.

True Costs leverages existing legal and financial frameworks to ensure that the costs of doing business are borne by the profiting companies, rather than investors and the public.

Asset Retirement Obligation /ˈaset rəˈtī(ə)rmənt ˌäbləˈɡāSH(ə)n/

 
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definition 1:

A legal obligation to plug and decommission wells and associated infrastructure after production has ceased, including routine site remediation and restoration of the land or sea to its approximate state prior to extraction.

IN OTHER WORDS:

When oil and gas are no longer flowing, the companies who profited from extraction are required by law to plug the holes and restore the landscape.

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definition 2:

The accounting provision reported in audited financial statements intended to represent the cost of fulfilling the legal requirements of the asset retirement obligation.

IN OTHER WORDS:

The estimated cost to clean up after extraction ends, reported as a liability on corporate balance sheets. In practice, this number is underestimated and heavily discounted, artificially depressing corporate decommissioning liabilities.

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The average cost to plug and reclaim a single abandoned well is estimated to be up to $150,000.

3.2 million abandoned oil and gas wells exist in the United States.

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Social & Environmental Impacts

The North American oil and gas industry cannot possibly pay to cleanup the mess they’ve profited from creating. This reality poses enormous risks to the financial and environmental future of our world.

Orphaned oil and gas wells are a threat to our local farmlands, communities and wilderness areas. They have the potential to leak toxic materials into the soil, water supply and air. These liabilities are also a major source of leaking methane, an incredibly flammable and potent greenhouse gas.

Reducing emissions from oilfields is one of the most effective ways to confront climate change. Better yet, keeping oil and gas in the ground would eliminate potential emissions and pollution from these projects altogether.

True Costs works to expose the oil and gas companies that line their own pockets before escaping into bankruptcy and leaving their mess for the public to clean up. Let’s protect the financial and environmental health of all communities by ensuring there’s a plan to safely retire each and every well.

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 When the Wells Run Dry

Magnifying the Localized Impacts

Our environmental journalist took second place at the Society for Environmental Journalists (“SEJ”) 20th Annual Awards for Reporting on the Environment.

Check out the stories:

  1. California's Multibillion-Dollar Problem: The Toxic Legacy of Old Oil Wells"

  2. "Deserted Oil Wells Haunt Los Angeles With Toxic Fumes and Enormous Cleanup Costs"

 
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https://pixabay.com/photos/oil-machine-fuel-equipment-500711/

"This collaborative investigation produced by the Center for Public Integrity and the Los Angeles Times revealed that the 35,000 dry oil wells across California require a massive cleanup that state and federal governments are not prepared to clean up even as the wells continue to spew dangerous fumes throughout adjacent communities. The two-part series, supported by a months-long effort to gather data from multiple federal, state and local government agencies, revealed that even though oil well operators post bonds to finance cleanups, California needs $6 billion to clean up these wells in light of the fact that just $110 million is available. Extensive mapping and data aggregation helped create a rich accessible package. The series studied the state and also specifically devoted one piece to the challenge just faced by Los Angeles where nearly 1,000 dry wells are monitored by two inspectors. Among the risk posed by these wells sitting in dense neighborhoods are the leak of noxious fumes as well as the risk that at any point the wells could prompt potentially catastrophic blowouts and explosions. It is a rare urban problem for Los Angeles and one that in this investigation produced mechanisms for residents of the sprawling metropolis to learn whether they live near risky wells. Regulators forced one oil company to plug a well that was the subject of the series' reporting and public officials are pushing for more stringent regulations as a result of the series."

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How do we do it?

The project generates reality-based estimates and analysis of oil and gas cleanup liabilities and develops strategies to enforce accountability and show investors the true risks to the environment and their financial portfolios.

The project also provides research to public interest researchers, regulators and journalists to support consequential accountability journalism that weakens the industry and ensures that polluters pay.

Through this process, the project aims to shine a light on the full extent to which the fossil fuel industry’s business fundamentals have deteriorated in order to dramatically accelerate investment in clean energy technologies.

 
 
 
 
 
  • a systems approach

  • through a de-centralized network

  • not a public facing entity

  • driving current investigative journalism, state and BLM regulatory rule making, and novel litigation

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We Have Reached the White House

President Biden Quotes Our Work

July 28, 2021

Remarks by President Biden on the Importance of American Manufacturing:

“You may have heard that, in Washington — and I was just on the phone — it looks like we reached a bipartisan agreement on infrastructure — a fancy word for bridges, roads — (applause) — transit systems, high-speed Internet, clean drinking water, cleaning up and caffing [sic] — cappig the orphan wells, over thousands of them abandoned, …”

“And guess what? A lot of those abandoned wells are leaking methane. And guess what? The same union guys that dug those wells, they can make the same union wage capping those wells. (Applause.)”

“For example, towns in the southwestern part of this state can now apply for funds to cap those wells that are leaking methane, clean up abandoned coal mines, invest in bringing new employers into abandoned factories, and get help attracting them.”

So we continue to say . . . “watch this” to the naysayers and climate deniers.

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Research in action:

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