4 ms·

These landowners tried to get money out of their property, and incorrectly assessed the expected outcome. Out of all the "victims", I am least sympathetic to th

by nickff 6y ago

These landowners tried to get money out of their property, and incorrectly assessed the expected outcome. Out of all the "victims", I am least sympathetic to the school district; they are a sophisticated entity, which had a significant amount of money on the line, and should have been smarter. This is an indictment of foolish or incompetent school officials (and perhaps other landowners), not of the bankruptcy system or corporations at large. Simply put, the school officials made a bet and lost.

csours 6y ago
I didn't find it in the article, but I'm curious how much the school district made off of the wells.
- gcbw3 6y ago
  if nothing, the person who signed off a school on grounds leaking that much methane already "made a profit" just by not being behind bars. nothing in this article makes sense if you try to imagine the people involved in any of those situations. It's not like those things happened by themselves.
avivo 6y ago
Or there was an information asymmetry, corporate pressure. etc. It may not be quite so simple.
- nickff 6y ago
  There is always some information asymmetry and outside pressure. If a system is so brittle that it cannot function in the real world, the system is the problem, not the world.
  - totalZero 6y ago
    It's not a piece of software my dude. The responsibility would legally have rested with the well operator, but the well operator went bankrupt. If you read the article, you will see that abandoned wells often end up in limbo between the bankrupt operator and its creditors. Meanwhile, the landowner is facing the negative externalities of the well (seepage, gas leaks, etc), and often has no choice but to pay to resolve the problems caused by the well being poorly terminated. There are supposed to be bonds in place to pay for these processes, but in practice those bonds only cover a fraction of the cost.
    - nickff 6y ago
      If the landowners didn't want to accept the risks related to resource exploitation, they could have: - Not allowed the development, and avoided the risks. - Insured against the risks. - Sold the land, along with all the risks. They did none of these, and effectively self-insured; now they expect pity, which they do not deserve.
      - totalZero 6y ago
        Your argument totally neglects the fact that "liability," as a legal concept, means it is not necessarily the case that all parties share equal blame. Had the operator not filed for bankruptcy, it would likely have been responsible for its own failure to appropriately manage the wells. Had the state or federal government established adequate bonding practices to pay for the plugging of old and unproductive wells such as these, the burden of plugging these particular wells would have been lessened.
        nickff 6y ago
        Had some other counter-factual been the case, I might feel differently. The school officials were operating under current conditions, and have no real excuse that I know of.
      - throwaway_jobs 6y ago
        > now they expect pity, which they do not deserve. So what you are saying essentially is the school board/county should file bankruptcy so taxpayers are stuck with the liability...then we can extend your argument to the taxpayers for their failure to avoid the risks of funding/operating schools and insuring against them. Do you feel that way about all the workers/businesses Trumps bankrupt businesses failed to pay by seeking bankruptcy protections?
    - riversflow 6y ago
      >The responsibility would legally have rested with the well operator. This is only half true. The responsibility is delegated to the operator by the land owner, but it is ultimately the land owner's liability. Consider if the land owner was leasing the rights to the operator and then decided to change the lease agreement in a way that made the operator insolvent. If it were the way you describe the operator would be hostage of the landowner. Allowing the liability to pass upstream to the property owner makes complete sense.
totalZero 6y ago
Absolutely the wrong way to think about this. Treat it like any other development that could be hazardous. If the school board pays for the construction of a new auditorium, and the new building is left half-finished by a bankrupt contractor, you would blame the contractor rather than the school board itself. This should be no different.
- nickff 6y ago
  The school district must conduct due diligence on its counter-parties, to an extent determined by the scope of the project and level of risk. If the school officials failed to do basic research on the contractors, or did not hedge against risks, I would blame the officials and not the contractors. The school officials have a responsibility to the public, while the contractor does not.
  - wiz21c 6y ago
    > The school officials have a responsibility to the public, while the contractor does not. You do realize what you're writing ? Next time you'll be robbed by some entity, you'll sure remember that it's your fault, that you had to conduct due diligence.
  - rtkwe 6y ago
    How deep do you go, at some point they have to trust whoever they're contracting has done the job properly sealing the wells or verifying that the wells are sealed. The school board isn't an oil company they don't have the expertise to evaluate everything independently.
    - jfim 6y ago
      > How deep do you go, at some point they have to trust whoever they're contracting has done the job properly sealing the wells or verifying that the wells are sealed. The school board isn't an oil company they don't have the expertise to evaluate everything independently. They can hire independent experts to assess whether the job has been done correctly, the same way one would get a second opinion on work that has been done that's outside one's field of expertise. There are plenty of engineering firms that will inspect bridges, oil wells, and other infrastructure. Alternatively, they could choose to not get in the oil business in the first place.
stainforth 6y ago
If only they had sought VC money to help guide them right?

by nickff 6y ago

csours 6y ago

I didn't find it in the article, but I'm curious how much the school district made off of the wells.

gcbw3 6y ago
if nothing, the person who signed off a school on grounds leaking that much methane already "made a profit" just by not being behind bars. nothing in this article makes sense if you try to imagine the people involved in any of those situations. It's not like those things happened by themselves.

avivo 6y ago

Or there was an information asymmetry, corporate pressure. etc. It may not be quite so simple.

nickff 6y ago
There is always some information asymmetry and outside pressure. If a system is so brittle that it cannot function in the real world, the system is the problem, not the world.
- totalZero 6y ago
  It's not a piece of software my dude. The responsibility would legally have rested with the well operator, but the well operator went bankrupt. If you read the article, you will see that abandoned wells often end up in limbo between the bankrupt operator and its creditors. Meanwhile, the landowner is facing the negative externalities of the well (seepage, gas leaks, etc), and often has no choice but to pay to resolve the problems caused by the well being poorly terminated. There are supposed to be bonds in place to pay for these processes, but in practice those bonds only cover a fraction of the cost.
  - nickff 6y ago
    If the landowners didn't want to accept the risks related to resource exploitation, they could have: - Not allowed the development, and avoided the risks. - Insured against the risks. - Sold the land, along with all the risks. They did none of these, and effectively self-insured; now they expect pity, which they do not deserve.
    - totalZero 6y ago
      Your argument totally neglects the fact that "liability," as a legal concept, means it is not necessarily the case that all parties share equal blame. Had the operator not filed for bankruptcy, it would likely have been responsible for its own failure to appropriately manage the wells. Had the state or federal government established adequate bonding practices to pay for the plugging of old and unproductive wells such as these, the burden of plugging these particular wells would have been lessened.
      - nickff 6y ago
        Had some other counter-factual been the case, I might feel differently. The school officials were operating under current conditions, and have no real excuse that I know of.
    - throwaway_jobs 6y ago
      > now they expect pity, which they do not deserve. So what you are saying essentially is the school board/county should file bankruptcy so taxpayers are stuck with the liability...then we can extend your argument to the taxpayers for their failure to avoid the risks of funding/operating schools and insuring against them. Do you feel that way about all the workers/businesses Trumps bankrupt businesses failed to pay by seeking bankruptcy protections?
  - riversflow 6y ago
    >The responsibility would legally have rested with the well operator. This is only half true. The responsibility is delegated to the operator by the land owner, but it is ultimately the land owner's liability. Consider if the land owner was leasing the rights to the operator and then decided to change the lease agreement in a way that made the operator insolvent. If it were the way you describe the operator would be hostage of the landowner. Allowing the liability to pass upstream to the property owner makes complete sense.

totalZero 6y ago

Absolutely the wrong way to think about this. Treat it like any other development that could be hazardous. If the school board pays for the construction of a new auditorium, and the new building is left half-finished by a bankrupt contractor, you would blame the contractor rather than the school board itself. This should be no different.

nickff 6y ago
The school district must conduct due diligence on its counter-parties, to an extent determined by the scope of the project and level of risk. If the school officials failed to do basic research on the contractors, or did not hedge against risks, I would blame the officials and not the contractors. The school officials have a responsibility to the public, while the contractor does not.
- wiz21c 6y ago
  > The school officials have a responsibility to the public, while the contractor does not. You do realize what you're writing ? Next time you'll be robbed by some entity, you'll sure remember that it's your fault, that you had to conduct due diligence.
- rtkwe 6y ago
  How deep do you go, at some point they have to trust whoever they're contracting has done the job properly sealing the wells or verifying that the wells are sealed. The school board isn't an oil company they don't have the expertise to evaluate everything independently.
  - jfim 6y ago
    > How deep do you go, at some point they have to trust whoever they're contracting has done the job properly sealing the wells or verifying that the wells are sealed. The school board isn't an oil company they don't have the expertise to evaluate everything independently. They can hire independent experts to assess whether the job has been done correctly, the same way one would get a second opinion on work that has been done that's outside one's field of expertise. There are plenty of engineering firms that will inspect bridges, oil wells, and other infrastructure. Alternatively, they could choose to not get in the oil business in the first place.

stainforth 6y ago

If only they had sought VC money to help guide them right?