Corporations are not people, contrary to popular belief. They are legal constructs designed to bundle up real and intangible property and the responsibilities that go with ownership of the bundle. This allows you and me to own a share of General Motors and not be responsible for its debts and liabilities if the enterprise fails.
But what happens if someone games the system? The limitations on liability and the opportunity to escape from responsibility provide an opportunity that has value. Let’s say you own a fleet of taxi cabs. Insurance is expensive, and your drivers, good as they are, can’t avoid accidents with personal injury claims. So you incorporate each of your cabs, buy the minimum insurance that’s allowed, and if there’s an accident? Well, that cab is the only thing of value in the corporation after the insurance pays its limit. The corporate veil protects you as the shareowner.
Now suppose a bunch of wealthy oil barons are worried about future liabilities of their depleted oil wells. Read this.
Diversified Energy Co. buys up oil wells that other companies no longer want any part of, holding 61,100 wells as of the end of 2020, the most in the country and considerably more than oil majors like Exxon Mobil (36,900 wells) and Chevron (25,800 wells). The rate at which the company is buying up wells is worrying regulators and industry groups because states require a company to plug a well with cement after it runs dry, and some think the rate that Diversified is paying out dividends and buying up wells means that it won’t have the funds to hold up its side of the bargain once bills come. That could leave states like Ohio, Pennsylvania and West Virginia on the hook to clean up a mess that could cost billions. Many wells have methane leaks, a ton of which causes 80 times the warming over the next 20 years that a ton of carbon dioxide would.Zachary R. Mider and Rachel Adams-Heard, Bloomberg
Spotlight PA reports:
SINK HOLES: Chester County commissioners want Pennsylvania regulators to shut down a portion of the Mariner East pipeline, saying at least seven sinkholes have developed since January in one township, per WHYY. The push comes days after Pennsylvania’s Public Utility Commission unveiled a raft of proposed pipeline safety regulations, some inspired by ongoing issues along the Mariner East route.
Your legislators are constantly being pressed by lobbyists to let the industry get by with less regulatory scrutiny, or to cut funding for inspection and enforcement. Utilities are supposed to operate for the public convenience and necessity, not to make it easy for private interests to cut corners.
Drillers and those who supply the chemicals they use are secretive about the magic sauce they inject to open the fissures and free the gas. Spotlight PA in Harrisburg and WHYY in Philadelphia are investigating reports that those chemicals may include toxic PFAS.
Nothing that fracking companies do improves the quality of air and water, or the health of Pennsylvanians, NOTHING!
Fracking is not in the public interest, it produces economic benefits to companies that buy political influence and corrupt the legislative process.
Political winds change. As unprecidented weather extremes become the rule, and other events make climate change real for most rational people, those who fostered disinformation and propaganda in a effort to delay action may be held accountable.
The abandonment of the project by its developer is good news. But the economic environment that made it attractive to big oil hasn’t changed much. Because the cost of oil is low thanks to many hidden subsidies and costs born by the public at large, there is still plenty of incentive to burn the fuel and delay switching to renewable non-polluting sources. So don’t go to sleep.
US Taxpayers provide more than twenty billion dollars ($20B) is direct subsidies to the Fossil Fuel Industry year in and year out. That does not include an estimated six trillion ($6T) in indirect subsidies that represent the externalized costs of our use of fossil fuel products. Damage to property, people’s health, and the environment is permitted explicitly or implicitly by our failure to hold the industry accountable.FactSheet_Fossil_Fuel_Subsidies_0719
We may have grown accoustomed to this and accepted it in service of cheap gas, and “disposable” plastic items, but the reality of the impact isn’t mitigated by acceptance.
Renewable energy is competitively handicapped by these direct and indirect subsidies to the detriment of the public good and the wellbeing of all. Shouldn’t they end?
Fracking waste contaminated water harms foals.Scan107
Pennsylvania collects very little when it permits private companies to tap the commonwealth’s fossil fuels. If the well owner goes bankrupt, who pays to close the well?
Well, Damn[from NumLock News]
When an oil and gas extraction company goes belly up, they can leave behind wells that will seep methane and other hydrocarbons into the atmosphere for decades to come, if not longer. In the past five years, 207 such businesses failed in the United States, leaving the states holding the bag in terms of plugging the wells, and 190 more companies could file for bankruptcy by 2022. There are 3.2 million deserted oil and gas wells in the United States and 29 million globally. Until very recently scientists did not incorporate those abandoned wells into their greenhouse gas estimates, but that turned out to be a mistake, as post-abandonment the wells are leaking some of the worst emissions possible. A study of 88 abandoned wells in Pennsylvania found 90 percent leaked methane, a measurement of 43 wells in Texas found significant leaks in 28, and in the U.K. researchers found methane emissions in 30 percent of 102 wells checked. Plugging a well — clearing it of any obstructions and then filling it with cement — can cost $20,000 to $145,000, and for a modern shale well the cost can hit $300,000. If companies see the red ink of filling a well exceeds the black gold coming out of it, they can just abandon it in bankruptcy, leaving taxpayers holding the bag and a massive legal mess in their methane-choked wake.
It must be mighty tempting to those energy moguls to drain away all the liquid assets and then declare bankruptcy.
Nothing good comes of fracking.