Imagine a date not so far in the future when fossil fuels are no longer our primary source of energy, when fossil fuel companies have either changed their business model or gone out of business. This is the future we’ve been working toward.
But what happens to the pipelines, the refineries, the storage farms that supported the fossil fuel industry? Will pipelines be left to corrode underground? Or storage tanks left to weather and rust? The companies that profited for decades without responsibility for their pollution, must be responsible for cleaning up their environmental messes and removing their obsolete facilities. But a bankrupt company won’t have funds to clean up what they’ve left behind. Ultimately, taxpayers will end up footing the bill.
Existing insurance requirements and other assurance mechanisms are inadequate to protect public finances from these risks. A fossil fuel risk bond program, on the other hand, is a surcharge-based trust fund that can be tapped to cover the costs of the hazards associated with fossil fuels. You can learn more about them at the Center for Sustainable Economy.
Legislation instituting fossil fuel bond funds is gaining support. And SOIL intends to introduce such a bill. But bills don’t pass just because they’re needed. They need supporters – both residents and legislators – lots of them. When the time comes, we’ll be asking you to help by sharing information about the bill on your social networks, by completing witness slips once the bill is referred to committee, and by contacting your state senator and representative voicing your support.
As Fossil Fuels Decline
Just as the coal industry continues its inevitable decline, the oil and gas industries will follow. The question is, “Who will clean up their mess?” Once a company has gone bankrupt, who will cap the wells? Who will dismantle and clean up the refineries? How will we deal with thousands of miles of pipelines crisscrossing our states, towns, and neighborhoods? At present, it appears that it will be you and me, residents and taxpayers, who will foot the bill.
We need to make these polluters pay now, while they are still solvent, into a fund specifically designated for returning these fossil fuel infrastructure remains into inhabitable earth again. SOIL is currently working with experts from across the country to develop legislation to 1) evaluate the costs of dismantling and remediating sites of former oil and gas infrastructure and 2) establish a funding mechanism based on fees paid by fossil fuel companies to be applied to end-of-life clean-up.
Are you interested in helping by contacting your state legislators about this effort? Just reply to this email with your contact information.
The impact of burning fossil fuels is now clear, the industry is in decline, and public support is waning. What will become of the thousands of abandoned wells spewing methane, the miles of buried leaching pipeline, the silently corroding refineries? Who will pay to clean up the mess?
Oil and gas companies are legally obligated to reserve ‘asset retirement obligations’ to plug and clean up their stranded liabilities. But these are merely ledger entries – not funds specifically set aside to address cleanup. Once a company goes bankrupt, these entries are worthless. Often, they are inadequate to begin with. We are working on legislation that will assess the liability across the state of Illinois. We need to know the size of the problem before determining a solution that will protect taxpayers from the costs of fossil fuel industry collapse. We continue to reach out to state legislators to present our proposal. We are collaborating with allies on the Illinois Environmental Council (IEC) to determine the most effective steps to move a bill forward in the 2022 legislative session.