17 Jul New Report: Regulators are Failing to Require Adequate Financial Assurance
July 17, 2013 –
A new report finds that state and federal regulators are failing to require adequate financial assurance to clean up after drilling is over or when things go terribly wrong.
Financial assurance, sometimes called bonding, is an amount that industry must pay to the state or federal government before drilling begins. These bonds are meant to insure that cleanup will happen if there are accidents or when drilling and production of a well are complete.
The report’s troubling findings include:
- In Colorado, the bond for surface landowner protection is only $2,000 to $5,000.
- In federal fiscal year 2008, the BLM spent more than $500,000 to close a single orphan well in Wyoming.
- The BLM sets the maximum bond at $10,000 per lease, which comes to only $1,833 per well on average. The $10,000 limit was set more than a half-century ago and has not been raised since.
Click here to read the complete report.