AP: Oil, Gas Bonds Leave Taxpayers Exposed

WASHINGTON - Bonds posted by companies with federal oil and gas leases cover only a small fraction of the projected costs of plugging wells and restoring land once the fuel is extracted, leaving taxpayers with the potential for huge cleanup bills, an Associated Press analysis of federal records shows.

The Bureau of Land Management (news - web sites) has collected just $132 million in bonds from oil and gas companies responsible for more than 100,000 wells on federal lands. The government estimates it costs between $2,500 and $75,000 to cap each well and restore the surface area.

In the past five years, the BLM has spent $2.2 million to clean up 187 wells where operators defaulted on their bonds.

At that average rate of $13,066 per well, the shortfall between the bonds and the actual cleanup costs could leave taxpayers with as much as a $1 billion potential liability if companies reneged on their cleanup responsibilities, the AP analysis found.

The Bush administration this fall quietly shelved an eight-year effort to increase the minimum bond requirements for oil and gas drilling on federal lands.

http://story.news.yahoo.com/news?tmpl=story2&u=/ap/20041226/ap_on_go_ot/oil_and_gas_bonds

It's the Bush Mob's way of making money.

The working people carry the burden while the 'owners' (entitled) collect the wealth.

and Gail Norton, BLM head cheese, campaigned for Bush in Nevada mining country just a mere few weeks ago ...and also the gas and oil districts in the west ...needed to keep her rich boss employed, as well as herself. The BLM has become a front for money-making in the Bush administration.

... to limit liability while distributing the offsetting assets (income and entitlements) to wealthy owners and crony beneficiaries, there's nothing left in the corporation's coffers when/if the guvmint comes around to collect damages. It's a double/triple/quadruple liability firewall ... with the drilling 'company' often separately incorporated and nested within layers of corporate shells. Until we enact criminal penalties for these deliberate scams, the profiteers will continue to suck on the public teat.

handing out the goodies to all his friends!!!

nt