What Happens to Abandoned & Orphaned Offshore Oil Wells?

More than 55,000 offshore oil wells are scattered among 2,287 active oil and gas leases across the ocean floor of the Outer Continental Shelf (OCS), which includes 10.9 million acres between state waters to 200 nautical miles from U.S. shores. An astonishing 58% of these wells are orphaned or abandoned.

With more than 32,000 abandoned wells littering the Gulf of Mexico and the Arctic, Atlantic, and Pacific Oceans, one cannot help but wonder what consequences these have on the environment, economy, and oil and gas workers. Let’s take a closer look.

Why Are Offshore Wells Abandoned?

Oil and gas companies abandon offshore wells when they are no longer economically viable. This may happen if the well essentially “dries up” or does not produce enough to offset operating costs. Under the Outer Continental Shelf Lands Act (OCSLA), they must properly decommission offshore wells if choose to abandon them or if they become environmental hazards. In some cases, offshore companies “temporarily” abandon offshore wells with the idea that they will come back in the future. They only partially decommission these temporarily abandoned wells, but it’s estimated that there are 3,364 of these wells – with a median age of 38 years since they were last drilled.

Orphaned Offshore Oil Wells & Issues of Accountability

Offshore oil wells are considered “orphaned” if they have no owner. Bankruptcy is a common denominator in orphaned wells, with no owner to plug, maintain, or restore the site. Orphaned offshore wells present a particular problem: there must be some source of money to properly decommission them, or they have the potential to endanger the environment and coastal communities.

To counteract this, offshore well operators are required to put up surety bonds. The intent is for these bonds to cover any costs of decommissioning abandoned and orphaned wells, but they have thus far been grossly lacking. One report found that the Department of the Interior (DOI) held $2.9 billion in bonds in 2015, but decommissioning liabilities in the Gulf of Mexico alone were $35.9 billion that year.

To address this problem on land, the Infrastructure Investment and Jobs Act invested $4.7 billion to plug, remediate, and restore orphaned onshore wells across the United States. No such act or investment has been made for abandoned and orphaned offshore wells, which are far more difficult to decommission and monitor. It is also believed that there are about 18,000 miles of inactive pipelines in the Gulf of Mexico that are not mapped or monitored at all and approximately 1,300 wells in state waters that are not recorded in federal offshore drilling inventories.

Problems Caused by Abandoned & Orphaned Offshore Wells

When offshore oil wells are not properly decommissioned, they will pose serious risks to the environment. They are more likely to leak or spill oil or gas into the ocean, which endangers sea life and delicate marine environments, threatens coastal communities, and impacts the economy as well. Corrosion, storm damage, and environmental exposure can make abandoned platforms and wells ticking timebombs.

The longest oil spill in U.S. history (which is still ongoing at the time of this writing) originated from an abandoned offshore well. Located approximately 12 miles off the coast of Louisiana near the mouth of the Mississippi River, a fixed offshore platform owned and operated by Taylor Energy has been leaking since it was hit by Hurricane Ivan in 2004.

Ivan passed within about 62 miles of the Taylor Energy platform on September 16, 2004. 145-mph winds and 70-foot swells caused an underwater mudslide that capsized the rig and moved it about 560 feet from its original site, where it was rapidly buried underneath approximately 150 feet of mud on the seafloor. The mudslide also exposed at least 28 oil wells. It’s estimated that more than 600 barrels of crude oil spilled into the Gulf when the rig capsized, and the oil kept leaking.

Taylor Energy reported the leaks to the U.S. Coast Guard and made multiple attempts to remedy them, but to no avail. This went on for six years before the public became fully aware of the problem. It was observers of the Deepwater Horizon oil spill of 2010 who noticed a persistent oil slick at the site where the Taylor Energy platform once stood. At that point, however, Taylor Energy had sold its remaining oil assets. As of 2015, the company had a single employee.

Even after the public became more aware of the spill, traditional methods of plugging the wells were not working because they were buried underneath so much mud at the seabed. There were also concerns about environmental risks and dangers to workers themselves by dredging the seafloor to access the wells, which were about 500 feet beneath the ocean’s surface.

It wasn’t until the spring of 2019 that a temporary solution was implemented. The U.S. Coast Guard teamed up with leading engineers to create a system that would effectively siphon out and capture about 1,000 gallons of oil a day from the still-leaking wells. The sheen of oil that had lingered at the site for 15 years had largely disappeared.

However, it’s estimated that the Taylor Energy oil spill has released up to 140 million gallons of oil since 2004, affecting an area of up to 8 square miles. If the wells are not plugged, they may continue to spill oil into the ocean for another 100 years.

And that’s just one example of an abandoned well and its impact on the environment. How many others are there that we simply don’t know about?

How Offshore Rigs Are Decommissioned

According to the Bureau of Safety and Environmental Enforcement (BSEE), decommissioning offshore platforms is “the process of ending offshore oil and gas operations at an offshore platform and returning the ocean and seafloor to its pre-lease condition.” This is no easy feat. It involves plugging all wells that the platform supports, severing well casings at least 15 feet below the mud line, cleaning and removing all platform risers, and removing the platform from its foundation. The platform must then be disposed of at a scrap yard or transported to an artificial reef site under the BSEE’s Rigs-to-Reefs Policy.

The workers who are tasked with decommissioning wells face potentially hazardous but crucial work, protecting the environment by ensuring abandoned and orphaned wells are properly sealed off and platforms are disposed of or turned into artificial reefs.

At Arnold & Itkin, we’ve represented offshore workers since 2004, fighting for their interests and safety. We represented one-third of the Deepwater Horizon crew and have continuously handled some of the biggest maritime cases, helping injured workers and families find answers and recover life-changing compensation while holding at-fault parties accountable. To find out how our offshore injury attorneys can help you, give us a call at (888) 346-5024. Your consultation is free.