Oil and Gas Bonding: The Basics

A crisis of unreclaimed and under-bonded oil and gas wells is growing across the West, threatening American taxpayers with liability in the billions and landowners with increasing risk to their land and water. The federal government’s oil and gas manager, the Bureau of Land Management (BLM), has not substantively changed standards for bonding in nearly seven decades. While this crisis is growing, common-sense solutions can still prevent a catastrophe.

When coal companies apply for a mine permit, they are required to estimate the cost to clean up and reclaim the site, then hand over financial assurances that would cover the cost of that cleanup to the regulatory agency. In the event that the company responsible were to dissolve or disappear, the government would cash the funds to pay for cleanup without using taxpayer dollars. In the world of oil and gas, this is not at all the case.

Learn more about how bonding works, the growing liability to landowners and taxpayers, and the common-sense solutions in this report.