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Another amazingly good writeup from Matt Levine. It should be said that natural gas is far, far from the only resource extraction industry that gets away with

Another amazingly good writeup from Matt Levine. It should be said that natural gas is far, far from the only resource extraction industry that gets away with this. This is also the standard operating procedure for mining operations as well. A large multinational mining company closes down a mine, and sells maintenance of the tailings pond to some cut-rate local company stood up on the spot for the purpose (and can subsequently eat up a bankruptcy no problem). The difference I guess in mining is that (now) local regulators generally require the tailings pond and maintenance plan to be locked down before permits are even given.

willcipriano 5y ago
Can't the laws be modified to require whomever mined the mine is responsible for the cleanup? That way if they hire a fly by night company they are still on the hook. Seems like a loophole that was created on purpose.
- allturtles 5y ago
  I think it would still be hard to write the regulation in a way that couldn't be gamed (e.g. the big, well-capitalized companies lending money to fly-by-night operators to dig wells for them). It would probably be easier for the government to just levy a tax on all well-owners for every year the well remains uncapped and then use that revenue to pay for capping the well themselves. This would make it impossible to wiggle out of paying and discourage dragging out the use of a well that's leaking methane but producing a tiny amount of gas for many years.
  - jnwatson 5y ago
    The government could force the driller to escrow the money to cap the well.
    - toomuchtodo 5y ago
      These are called surety bonds.
- Tanjreeve 5y ago
  This is called a negative externality and it's what political economists spend a lot of their time fighting about. The bit of "how to determine who pays" is very complex/impossible when you're talking about something like air pollution.

willcipriano 5y ago

Can't the laws be modified to require whomever mined the mine is responsible for the cleanup? That way if they hire a fly by night company they are still on the hook. Seems like a loophole that was created on purpose.

allturtles 5y ago
I think it would still be hard to write the regulation in a way that couldn't be gamed (e.g. the big, well-capitalized companies lending money to fly-by-night operators to dig wells for them). It would probably be easier for the government to just levy a tax on all well-owners for every year the well remains uncapped and then use that revenue to pay for capping the well themselves. This would make it impossible to wiggle out of paying and discourage dragging out the use of a well that's leaking methane but producing a tiny amount of gas for many years.
- jnwatson 5y ago
  The government could force the driller to escrow the money to cap the well.
  - toomuchtodo 5y ago
    These are called surety bonds.
Tanjreeve 5y ago
This is called a negative externality and it's what political economists spend a lot of their time fighting about. The bit of "how to determine who pays" is very complex/impossible when you're talking about something like air pollution.