Debts And Desertion: Bankruptcy Law And The Orphan Well Crisis

Authors

Abstract

The issue of orphan wells—unplugged and unproductive oil and

gas wells with no responsible operator—poses a significant

environmental and public health threat in the United States. The scale

of this crisis is alarming: there are over 120,000 documented orphan

wells and potentially millions more undocumented. These wells are

often significant sources of methane emissions and other toxins that

exacerbate climate change and endanger the health of surrounding

communities. This paper examines the orphan well crisis, exploring

how wells become orphaned and the environmental and health

impacts associated with them. Furthermore, it delves into how the

situation is likely to worsen and critiques the role of bankruptcy law

in contributing to this growing problem. The paper then proposes

three targeted interventions that government entities can pursue

within the bankruptcy process to mitigate the creation of future

orphan wells. These include treating plugging and abandonment costs

as administrative expenses, opposing the abandonment of wells

during bankruptcy, and ensuring that plugging and abandonment

costs are not classified as “claims” in Chapter 11 cases where

successful reorganization is likely. By addressing the orphan well

crisis through the lens of bankruptcy law, this paper highlights a

crucial yet under-examined avenue for fighting climate change and

enforcing environmental cleanup obligations and underscores the

need for more robust legal research and reporting at the intersection

of environmental law and bankruptcy law.

Recommended Citation

Debts And Desertion: Bankruptcy Law And The Orphan Well Crisis, 36 Fordham Envtl. L. Rev. (2024).
Available at: https://ir.lawnet.fordham.edu/elr/vol36/iss1/3