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Mitigating Environmental Impact: Strategies for Inactive Oil and Gas Wells

Learn how to avoid environmental remediation costs through temporary closure of inactive wells. Understand gas migration and water contamination risks, and assess real options for reactivation or abandonment. Case studies and strategies from experts in natural resources management.

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Mitigating Environmental Impact: Strategies for Inactive Oil and Gas Wells

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  1. Avoiding Environmental Remediation Through “Temporary” Closure Lucija Muehlenbachs University of Maryland

  2. Alberta: 350,273 oil and gas wells 42,000 are inactive Texas: 354,616 oil and gas wells 114,259 of which are “shut-in, depleted and are not expected to produce another barrel of oil”

  3. Environmental Impacts Gas migration Drinking water contamination Naturally Occurring Radioactive Material

  4. Real Options in Natural Resources Brennan and Schwartz (1985) Paddock, Siegel and Smith (1988) Dixit and Pindyck (1994) Slade (2001) Mason (2001) Moll (2001) Moel and Tufano (2002)

  5. Option to Reactivate

  6. Option to Abandon Option to Reactivate

  7. Maintenance Cost Option to Abandon Option to Reactivate

  8. Value of Abandoning Or Mothballing

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