Quantcast
Environmental News for a Healthier Planet and Life

Bankrupt Fracking Companies Are Harming the Climate and Taxpayers

Energy
Bankrupt Fracking Companies Are Harming the Climate and Taxpayers
Nearly 250 U.S. oil and gas companies are expected to file for bankruptcy by the end of next year. Joshua Doubek / Wikimedia Commons / CC by 3.0

Fracking companies are going bankrupt at a rapid pace, often with taxpayer-funded bonuses for executives, leaving harm for communities, taxpayers, and workers, the New York Time reports.


Nearly 250 U.S. oil and gas companies are expected to file for bankruptcy by the end of next year — more than went under in the last five years combined — as demand craters due to the pandemic, a global price war, and falling renewable energy prices. These failing companies often neglect well maintenance and plugged well repairs to save money, causing tons of ultra-heat-trapping methane to continue gushing into the atmosphere.

Shale wells typically cost $300,000 to close — far more than the estimates used by companies, regulators and financial analysts — and an analysis prepared for the Times found companies have failed to reserve sufficient funds, as required by law, to remediate their well sites, leaving taxpayers to foot the cleanup bill.

As a result, early estimates show substantial increases in methane concentrations over Texas and New Mexico oil fields in March and April 2020 compared to the previous year. The Trump administration is seeking to effectively eliminate methane leak detection and repair requirements.

One drilling site, abandoned by Extraction Oil & Gas in Greeley, Colorado, is situated just 700 feet from an elementary school serving the community's fast-growing immigrant population where air pollution monitors recorded 100 periods of elevated levels of toxic benzene over the course of seven months last year.

Those wells were originally planned to lie closer to a more affluent, majority white charter school, but were moved after an outcry from that school's parents. Extraction Oil & Gas paid 18 of its officers and key employees a combined $6.7 million in "retention agreements" last month, three days before it filed for bankruptcy protection.

Extraction is hardly alone, Chesapeake Energy declared bankruptcy in May after paying $25 million in executive bonuses just weeks before. Diamond Offshore Drilling got a $9.7 million COVID-stimulus tax refund in March and then paid its executives the same amount as cash incentives to remain with the company as it undergoes bankruptcy proceedings.

"It seems outrageous that these executives pay themselves before filing for bankruptcy," Kathy Hipple, an analyst at the Institute for Energy Economics and Financial Analysis and a finance professor at Bard College told the Times. "These are the same managers who ran these companies into bankruptcy to begin with."

The recent spate of oil & gas bankruptcies hurts the firms' workers as well, with lawsuits against the companies arising from workers injured and killed on the job put on hold.

For a deeper dive:

New York Times

For more climate change and clean energy news, you can follow Climate Nexus on Twitter and Facebook, and sign up for daily Hot News.


OlgaMiltsova / iStock / Getty Images Plus

By Gwen Ranniger

In the midst of a pandemic, sales of cleaning products have skyrocketed, and many feel a need to clean more often. Knowing what to look for when purchasing cleaning supplies can help prevent unwanted and dangerous toxics from entering your home.

Read More Show Less

EcoWatch Daily Newsletter


JasonOndreicka / iStock / Getty Images

Twenty-five years ago, a food called Tofurky made its debut on grocery store shelves. Since then, the tofu-based roast has become a beloved part of many vegetarians' holiday feasts.

Read More Show Less

Trending

Protestors walk past an image of a Native American woman during a march to "Count Every Vote, Protect Every Person" after the U.S. presidential Election in Seattle, Washington on November 4. Jason Redmond / AFP / Getty Images

By Jessica Corbett

A leading environmental advocacy group marked Native American Heritage Month on Wednesday by urging President-elect Joe Biden, Vice President-elect Kamala Kamala Harris, and the entire incoming administration "to honor Indigenous sovereignty and immediately halt the Keystone XL, Dakota Access, and Line 3 pipelines."

Read More Show Less
Marilyn Angel Wynn / Getty Images

By Christina Gish Hill

Historians know that turkey and corn were part of the first Thanksgiving, when Wampanoag peoples shared a harvest meal with the pilgrims of Plymouth plantation in Massachusetts. And traditional Native American farming practices tell us that squash and beans likely were part of that 1621 dinner too.

Read More Show Less
Former U.S. Sec. of Energy Ernest Moniz listens during the National Clean Energy Summit 9.0 on October 13, 2017 in Las Vegas, Nevada. Isaac Brekken / Getty Images for National Clean Energy Summit

By Jake Johnson

Amid reports that oil industry-friendly former Energy Secretary Ernest Moniz remains under consideration to return to his old post in the incoming Biden administration, a diverse coalition of environmental groups is mobilizing for an "all-out push" to keep Moniz away from the White House and demand a cabinet willing to boldly confront the corporations responsible for the climate emergency.

Read More Show Less