This study examines economic issues that affect the decision to reclaim land disturbed by oil and gas development. We start with a discussion of the current reclamation bonding requirements in Wyoming, which are intended to insure the proper reclamation of disturbed land. Next, a simple economic framework is proposed for modeling reclamation decision making by oil and gas producers. The most important issue affecting the decision to reclaim is the cost of reclaiming the disturbed land; therefore, we use a dataset provided by the Wyoming Oil and Gas Conservation Commission to conduct a detailed analysis of reclamation costs for orphaned oil and gas wells. We also consider issues concerning the timing of reclamation costs and some environmental considerations. Finally, we discuss some deficiencies in the current bonding system, and offer some suggestions on how the current system could be improved in terms of providing more economic incentives for operators to fully reclaim disturbed lands.
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