Press release

Illinois could face hidden billion-dollar oil well cleanup crisis, new research finds

Data gaps and weak oversight leave regulators unable to track abandoned wells, or ensure oil industry pays cleanup costs

Jan 16 2025

CHICAGO, IL — Illinois’ oil and gas cleanup problem is far larger than state regulators realize, according to new research that identified tens of thousands of wells that threaten to leave taxpayers with a billion-dollar cleanup bill.  

Loopholes in the state’s regulatory system and massive gaps in the state’s data collection mean state regulators cannot track the financial and environmental costs of unclosed wells, let alone hold drillers accountable to close them properly. 

Illinois officially lists over 6,000 wells that need immediate cleanup, yet the new analysis reveals a much larger hidden crisis: the majority of the state’s 30,000 remaining wells are likely producing little to no oil and are at high risk of abandonment, and tens of thousands of additional plugged wells are not monitored or planned for at all, despite that fact that plugs are known to fail regularly. Abandoned oil and gas wells leak toxins into the air and water, threatening the health of nearby communities and contaminating drinking water supplies.

This blind spot, along with other regulatory shortcomings identified in the report, means Illinois taxpayers may face a bill of over $1 billion in cleanup costs, a financial timebomb that researchers warn could explode as oil companies exploit regulatory gaps to avoid their own cleanup obligations.

The report, from the Environmental Advocacy Center of the Bluhm Legal Clinic at the Northwestern Pritzker School of Law and the environmental non-profit ClientEarth USA used public records and new Freedom of Information Act disclosures to capture the most comprehensive assessment to date of Illinois’s unplugged well crisis. 

The massive undercount is possible because of a critical flaw in Illinois oversight. The state doesn't track how much oil individual wells produce. This data gap—alongside a host of other legal loopholes—let operators classify defunct wells as "active" to postpone cleanup. The report warns this creates similar conditions to those seen in other states where operators commonly use "active" status as legal cover to transfer the wells to smaller, underfunded companies designed to go bankrupt, leaving the state with orphaned wells and taxpayers with the cleanup bill.

Key findings

  • The majority of Illinois’s 30,000+ wells are likely producing little to no oil, yet are still not properly closed, polluting air and drinking water among nearby communities.
  • These wells are at very high risk of becoming ‘orphaned’, creating more than $1 billion in potential taxpayer liability.
  • The average cost to plug a well is about $40,000 and can exceed $100,000, yet the state does not require all operators to post bonds for their wells, and sets bonding requirements far below the cost of cleanup for those operators it does require bonding form. Operators may post as little as $1,000 in bonds (a security deposit intended to cover cleanup). This leaves taxpayers to foot the bill for the shortfall when companies dissolve without cleaning up their wells.
  • Despite being required by law to order oil companies to close wells that the agency has found to be inactive, the Illinois Department of Natural Resources has not issued a single closure order in two years under that statutory provision, instead issuing operators of visibly inactive wells a generalized administrative citation that generally fails to result in well closures. 
  • The state collects no production data, making it impossible to tell when a well stops being profitable, or even when it ceases to operate.


“Illinois regulators do not even track when a well stops producing oil, so there’s no efficient way for the state to hold companies accountable to their well closure obligations,” said Robert Weinstock, Director of the Environmental Advocacy Center at the Northwestern Pritzker School of Law. “Loopholes and weakness in the state’s regulations and enforcement approach mean we could be in for a wave of abandoned oil wells spewing climate pollution, poisoning groundwater, and making Illinois farmland unusable.”

“Fossil fuel companies appear to be planning to use Illinois taxpayers as their cleanup insurance policy,” said Ben Segal, attorney at ClientEarth. “Weak regulation has created a system that fossil fuel companies can exploit to ensure that the costs to clean up their wells are paid by public funds, and local communities suffer years of environmental, health, and economic impacts when oil companies scheme to indefinitely delay clean up.”

The report recommends practical steps Illinois can take to prevent oil drillers from dodging their cleanup responsibilities, leaving the state and ultimately taxpayers to foot the bill. It calls on the state to use existing legal authority to collect well-level production data and enforce existing closure laws, as well as amend laws to raise cleanup bond amounts to reflect the real costs. Other recommended reforms would ensure that industry fully funds the state’s orphan well cleanup program, close loopholes that let companies transfer liabilities to shell operators, and ensure past owners remain accountable when wells are abandoned.

ENDS

Notes to editors:
  • A copy of the report can be found here
About ClientEarth

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account and defend everyone’s right to a healthy world. ClientEarth teams in Europe, Asia and the USA work to shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.