Cleaning up the tens of thousands of oil and gas wells scattered across California — which includes plugging them, removing surface infrastructure and cleaning the soil — could eventually cost more than $9 billion if they fall to the state to handle, a new report commissioned by state oil regulators says.

Companies have to set aside cleanup money, called "bonds," but regulators only hold $110 million in these funds for onshore wells.

In total, there are more than 105,000 unplugged oil and gas wells around California. While many are still active, tens of thousands are idle, orphaned or otherwise out of service. As the state imagines a carbon-free future and watches its oil and gas production fall, regulators want to know what costs may lie ahead.

The report estimates the per-well cleanup cost as roughly $85,000. The study was produced by the California Council on Science and Technology, a Sacramento-based nonprofit that offers expert advice to the state government.

Judson Boomhower, an environmental economics professor at the University of California San Diego and the CCST report's main author, said the math is simple. “The bonds just really aren’t big compared to the costs," he said.

Deserted oil and gas wells can continue to leak climate-warming gases or salty water, so environmentalists push for them to be plugged. The oil and gas industry, meanwhile, says it is paying its fair share for cleanup. Fees on active companies, and an assessment on production, fund much of state's work as it slowly plugs its backlog of orphan wells left behind by defunct operators. The report estimates there could be several thousand such wells.

The next wave of orphans

CCST also identified nearly 70,000 wells that are at risk of becoming orphaned, meaning they could become the state's problem if oil prices take a sharp downturn or new regulations put further pressure on the industry.

Boomhower said the likelihood of companies deserting those wells increases as the wells are sold — which often happens to aging infrastructure in extractive industries — and move "down the food chain."

“These wells can change hands from big operators to smaller or less-financially viable operators, and then I think you start to have to be worried," he said.

The long-awaited study was commissioned by the California Geologic Energy Management Division, or CalGEM, which regulates oil and gas development. It comes as the Legislature is busy rewriting the state's oil laws to keep up with an industry whose production in California peaked in 1985 and has declined since.

"[California] leads in instituting policies and practices to ensure the financial burden for phasing out oil falls on industry, not taxpayers," Department of Conservation spokesperson Teresa Schilling wrote in a statement announcing the report.

An issue of national proportion

The problem, though, is far from contained to California. By some counts, there could be as many as 3 million deserted wells across the United States.

"California’s situation is not unique. Analyses have found that most states struggle to meet the costs of plugging orphan wells and typically decommission only a fraction of known orphan wells each year," the CCST report said.

In Ohio, for example, a recent analysis found that the state is paying more than $110,000 per well that it has to plug for operators that walked away.

Last year, the director of North Dakota's Department of Mineral Resources estimated that the per-well cleanup price tag could hit $150,000.

And cleanup of old oil and gas wells on federal lands is just as underfunded. A U.S. Government Accountability Office study published in September found that cleanup funds covering at least 99.5% of wells in federal jurisdiction were insufficient to pay for plugging and remediation.

While the CCST study dealt mainly with onshore wells, it remains unclear just how expensive it would be to fully decommission oil platforms in the Pacific Ocean. "Any individual offshore project can just be potentially enormous in terms of cost," Boomhower said.

The fossil fuel industry and some environmentalists agree that only partially dismantling offshore oil platforms and artificial islands might save money as well as leave behind rich marine habitat. This process, called "reefing," has been shown to lead to an increase in nearby aquatic life.

Attempts by state legislators to create a program that would allow for reefing, though, have so far proven unsuccessful.

Who's still liable?

Largely motivated by the abandonment of offshore oil wells near Santa Barbara, a group of Democratic lawmakers has over the past few years passed a suite of billsdealing with oil and gas well cleanup. These are yet to lead to a substantial increase in the bonds heldby the state for the cleanup of onshore oil and gas wells, but CalGEM has been handed more power to increase these pools of money in the future.

As California's oil and gas industry continues to shrink, new questions surrounding cleanup liability are emerging. For example, if an operator goes bankrupt, can the previous owner be forced to pitch in to plug the wells that are left behind?

Boomhower said California law, in theory, gives the state some authority to do so.

“But then in practice," he said, "it seems like there are questions of how feasible or difficult that is.”

Mark Olalde covers the environment for The Desert Sun. Get in touch at molalde@gannett.com, and follow him on Twitter at @MarkOlalde.