Avoiding Environmental Remediation Through “Temporary” Closure Lucija Muehlenbachs University of Maryland
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”
Environmental Impacts Gas migration Drinking water contamination Naturally Occurring Radioactive Material
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)
Option to Reactivate
Option to Abandon
Option to Reactivate Option to Abandon Maintenance Cost
Value of Abandoning Or Mothballing