The Trump plan to make taxpayers pay oil companies' cleanup costs

Across the United States, more than 2.1 million oil and gas wells sit abandoned and unplugged — leaking methane, contaminating drinking water, and poisoning the communities around them. These are "zombie wells": wells that keep polluting long after the companies that profited from them have moved on. A new federal proposal would make it dramatically easier for companies to create more of them, and dramatically more profitable to walk away.

What is a bond, and why does it matter?

Before drilling on federal land, companies must put money aside — a bond — to cover the cost of cleaning up their wells once they stop producing. But if that amount is set too low, it becomes more profitable to offload that responsibility to taxpayers than to pay for cleanup, and the industry has an established way of doing exactly that. 

The Trump administration's new proposal would cut bond requirements back to levels last seen in the 1960s. It's a deliberate transfer of financial risk from profitable oil companies to the public.

How much are bond requirements dropping?

Cleaning up a well properly typically costs between $40,000 to $100,000. But bonds generally aren’t set per well — they're set per lease, or per state. A single lease can cover dozens of wells, and a company operating in one state can have hundreds.

The bond requirements have historically been set too low, meaning that the money put aside by the industry doesn’t cover the real cost of cleanup. So when companies dodge their cleanup responsibilities, its communities who endure the pollution, and taxpayers who cover the shortfall.

In 2024, the Bureau of Land Management raised bonds for the first time in nearly 40 years to try to bring them a little closer to what cleanup actually costs, setting a $150,000 minimum per lease and a $500,000 minimum statewide. But the new proposal would slash nearly all of that increase, cutting the per-lease minimum to $10,000 and the statewide minimum to $25,000 — the same numbers set in 1960, when gas cost 31 cents a gallon and nobody had walked on the moon yet.

Under the new $10,000 per-lease minimum, a company facing a $100,000 cleanup bill on a single well could forfeit its bond and still come out tens of thousands of dollars ahead. At the statewide level, a company managing hundreds of wells across federal land would post just $25,000 against a cleanup liability that could run into the tens of millions.

Who pays when oil companies walk away?

In practice, oil and gas companies often avoid the cleanup step entirely by selling aging wells — ones whose cleanup costs already outweigh what's left to extract from them — down a chain of smaller operators, ending with a shell company designed to go bankrupt. When that company folds, the well becomes "orphaned", and taxpayers are left to cover the cleanup the original bond was supposed to guarantee. The Trump administration itself estimates that the cost to taxpayers to cleanup a single well is $71,000.

ClientEarth is challenging this pattern directly. In Colorado, we represent landowners and farmers in McCormick v. HRM Resources, a lawsuit alleging that oil companies transferred aging wells through a chain of transactions designed to shed cleanup liabilities and leave others holding the bill. And in Illinois, our research with Northwestern Pritzker School of Law found that official well-abandonment figures likely understate the true scale of the problem several times over.

This is the system federal bonding rules are supposed to protect the public against. Lowering bonds on federal land does nothing to stop companies passing uneconomic wells down the chain. It simply reduces the money available when that chain ends in bankruptcy — making it easier for the industry to repeat a familiar pattern on publicly owned land, while taxpayers pick up more of the cost.

The public comment period on the Trump administration’s proposal is open until August 24, 2026. Make your voice heard now to hold oil and gas companies accountable for the pollution they cause.