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.

By Frank La Sorte and Kyle Horton

Millions of birds travel between their breeding and wintering grounds during spring and autumn migration, creating one of the greatest spectacles of the natural world. These journeys often span incredible distances. For example, the Blackpoll warbler, which weighs less than half an ounce, may travel up to 1,500 miles between its nesting grounds in Canada and its wintering grounds in the Caribbean and South America.

Read More Show Less

EcoWatch Daily Newsletter

Kevin Maillefer / Unsplash

By Lynne Peeples

Editor's note: This story is part of a nine-month investigation of drinking water contamination across the U.S. The series is supported by funding from the Park Foundation and Water Foundation. Read the launch story, "Thirsting for Solutions," here.

In late September 2020, officials in Wrangell, Alaska, warned residents who were elderly, pregnant or had health problems to avoid drinking the city's tap water — unless they could filter it on their own.

Read More Show Less

Trending

Eat Just's cell-based chicken nugget is now served at Singapore restaurant 1880. Eat Just, Inc.

At a time of impending global food scarcity, cell-based meats and seafood have been heralded as the future of food.

Read More Show Less
New Zealand sea lions are an endangered species and one of the rarest species of sea lions in the world. Art Wolfe / Photodisc / Getty Images

One city in New Zealand knows what its priorities are.

Dunedin, the second largest city on New Zealand's South Island, has closed a popular road to protect a mother sea lion and her pup, The Guardian reported.

Read More Show Less

piyaset / iStock / Getty Images Plus

In an alarming new study, scientists found that climate change is already harming children's diets.

Read More Show Less