Move to Permanently Seal Sites in Gulf Could Cost Billions but Create New Work
Siobhan Hughes
The Wall Street Journal
9/16/2010
Oil and gas companies must permanently plug thousands of Gulf of Mexico wells idle for five years or more under a federal order issued Wednesday.
The mandate could cost well owners billions of dollars, but it could also create jobs for rig workers idled by a federal clampdown on new offshore exploration.
The U.S. Interior Department and its offshore-drilling oversight agency said companies must cement 3,500 wells that aren’t producing oil or gas. Another 650 oil and gas platforms must be dismantled if they are no longer being used, the government said. The mandate becomes effective Oct. 15.
Companies will have 120 days to submit plans to decommission production facilities and wells. Under the regulation, any well that has not been used during the past five years for exploration or production must be plugged. Production platforms and pipelines must be decommissioned if no longer in use.
Owners of such wells would have to pay for the permanent sealing of the wells and abandon the opportunity of reopening them for production.
The article continues at WSJ.
H/T Weasel Zippers
