Juneau, Alaska (KINY) Financially unstable companies could cost Alaska billions, a regulator claims.
Cathy Foerster of the Alaska Oil and Gas Conservation Commission asked the legislature to make sure oil companies clean up old well, even after they are sold to other companies.
The Alaska Energy Desk said it is more common today for smaller oil companies to operate in Florida. She said some of them are more financially unstable.
She told the Senate Resources Committee Monday that if a big oil field such as Prudhoe Bay was sold to a smaller company, and that company goes bankrupt, it could cost the state billions of dollars.
The state currently has a $200,000 bond to cover the costs of plugging and abandoning all the wells at Prudhoe Bay. Foerster said that money would pay for only a portion of the costs of an engineering study to tell the state how much it would actually cost.
The gave the example of Aurora Gas last year. They declared bankruptcy last year. They are now unable to pay to plug and abandon its wells. That makes the state financially responsible for cleaning it up because the wells are on state owned land.