Unplugged: Gulf of Mexico


May 16, 2023

Offshore Overview: Wells by Status

Over 82,000 wells drilled have been drilled in the Gulf of Mexico according to the US Bureau of Safety and Environmental Enforcement.

Operators are legally required to plug non-producing wells, onshore and offshore; however, definitions and timelines of “active” vary. Based on University of California (UC, Davis) research, some 14,000 of these Gulf of Mexico (GoM) wells still need to be plugged, and about 5,000 are still actively in production. In state waters, plugging costs are sometimes the responsibility of taxpayers as the merger and acquisition process passes wells from one company to the next, often resulting in insolvent operators with late-stage wells they are unable to plug. In federal waters there tends to be less movement and better regulation, with only 12% of outstanding plugging liability not belonging to financially stable supermajor companies..

Under the Radar: Shallow Water Wells

Unlike dramatic blowouts, the damage from many small leaks in unplugged GoM wells is ongoing and largely unmonitored.

Shallower, near-shore wells with oil seepage can damage marine ecosystems and contaminate coastal shorelines and waterways as well as leak methane into the atmosphere. Fortunately, for deepwater wells, marine microbes around deepwater structures consume and break down much of the released methane, limiting impact.

However, approximately 13,000 of inactive GoM wells are in shallow water, off the shores of Texas, Louisiana, Mississippi, Alabama, and in federal waters.

Remediation Options: Maximizing Impact

Estimates by US researchers for plugging all known inactive GoM wells is around $30 billion, with the cost to plug only shallow water wells pegged at $7 billion. Shallower wells near shorelines are much less resource-intensive to plug and often produce more negative effects on the environment.

The 2021 infrastructure bill provided just under $5 billion for plugging orphaned onshore and offshore wells. Maximizing the cost/benefit tradeoffs of plugging offshore wells means prioritizing shallow water wells that negatively impact coastal resources: These wells cost less to plug than deepwater wells, and the positive impact for sea life and the environment is immediate.