SPRINGFIELD, IL – Decades after peaking, Illinois’ once-robust oil industry is leaving behind a potentially massive financial and environmental burden for state taxpayers. A new report, released , estimates the cost of plugging and cleaning up thousands of inactive and abandoned oil and gas wells across the state could exceed $1 billion.
The report, a collaboration between the Bluhm Legal Clinic at Northwestern University’s Pritzker School of Law and the environmental advocacy group ClientEarth USA, paints a picture of a declining industry operating under a weak regulatory framework. While more than 23,000 oil and gas production wells are currently listed as operating in Illinois, the vast majority are “stripper” wells, yielding less than 1.5 barrels of oil per day, according to the Illinois Department of Natural Resources (IDNR).
The core issue isn’t necessarily active production, but the legacy of wells left unattended. The report states that “the majority of Illinois’s 30,000+ wells are likely producing little to no oil, yet are still not properly plugged, emitting toxic and climate pollutants and threatening air and drinking water relied on by nearby communities.” These abandoned wells pose a risk of environmental contamination and require costly remediation.
A History of Decline
Illinois’ oil boom began in the 1850s, with significant growth occurring in the first half of the 20th century, fueled by the rise of the transportation industry. Production peaked in the early 1940s, averaging over 100 million barrels annually. While technological advancements like water flooding and hydraulic fracturing (“fracking”) provided a temporary resurgence in the 1950s and 60s, output has steadily declined since, falling to just over 7 million barrels in .
The state’s oil and gas resources are largely concentrated in the Illinois Basin, a geological area spanning parts of Illinois, Indiana, and western Kentucky. However, the economic viability of extracting oil from these wells has diminished, leaving many operators with little incentive to properly decommission them.
Regulatory Weaknesses and Enforcement Gaps
The report highlights significant shortcomings in Illinois’ regulatory system. A key problem is the lack of comprehensive data on well status. IDNR does not consistently collect production data, making it difficult to determine which wells are truly inactive and require plugging. This lack of transparency hinders enforcement efforts.
Illinois law mandates that well owners are responsible for plugging and cleaning up their sites once wells become inactive – defined as not producing oil or gas for 24 consecutive months. However, operators can delay this responsibility by applying for “temporarily abandoned” status, which requires a minimal annual fee of $100, a fraction of the $100,000 it can cost to permanently seal a single well.
the report criticizes the historically low surety bond requirements. While legislation (Senate Bill 2463) broadened the requirement to include more permit holders and increased the bonding amount to $10,000 per well, the report argues this remains insufficient to cover actual remediation costs. Operators can also utilize “blanket bonds” covering multiple wells at significantly reduced rates, sometimes as low as $1,000 per well.
Robert Weinstock, director of Northwestern’s Environmental Advocacy Center and lead author of the report, emphasized the fundamental issue: “The fundamental point is, whatever amount of a problem we’ve got, it’s the industry’s responsibility to deal with it, and that’s what the system is not achieving.”
The Potential for Taxpayer Liability
The report suggests that IDNR has often been reluctant to enforce existing regulations, allowing operators to disregard orders to plug and clean up inactive wells. When operators fail to meet their obligations, the financial burden ultimately falls on the state and, by extension, Illinois taxpayers.
Currently, 3,991 wells are enrolled in IDNR’s Plugging and Restoration Fund, established in to address leaking and abandoned wells. The current fiscal year’s budget allocates just over $64.8 million, largely from federal grants. However, the report contends that this funding is inadequate given the scale of the problem, as the enrolled wells represent only a fraction of the 30,000+ wells under IDNR’s monitoring.
IDNR Response and Future Steps
IDNR acknowledges the issue of orphan and abandoned wells as a national problem and is focusing on utilizing federal funding from the Infrastructure Investment and Jobs Act to accelerate plugging efforts. The agency stated it is prioritizing the most urgent and potentially dangerous wells.
The report recommends several policy changes, including requiring more comprehensive data reporting from producers, stricter enforcement of existing regulations, increased surety bond requirements, and limitations on the use of “temporarily abandoned” status. It also suggests restricting the ability of companies to transfer permits to avoid cleanup costs through bankruptcy.
The Illinois Petroleum Resources Board declined to comment on the report’s findings.
