An effort to set deadlines to plug orphan wells hits resistance

ODESSA — Abandoned oil wells have become an expensive and growing environmental threat in Texas, costing taxpayers tens of millions of dollars to remediate. Leaders of the oil and gas industry, state regulators and lawmakers, and policy experts agree there is a problem.

But they don’t agree on the specifics of how to solve it.

And an early attempt by a Republican lawmaker hit a major roadblock Wednesday when a Texas Senate panel told him to rethink his approach to solving the problem.

State Sen. Mayes Middleton of Galveston introduced a bill that sets deadlines to plug the more than 150,000 inactive wells in Texas during the next 15 years. It also gives regulators more authority over oil and gas companies to enforce plugging requirements and directs them to submit annual reports.

During the hearing, industry leaders said they could comply with Middleton’s proposal — at great costs — but suggested additional flexibility. Meanwhile, environmental policy experts and activists said the proposed timeline to plug wells was too lenient.

Members of the Senate Committee on Natural Resources were skeptical of both sides of the debate. And they repeatedly questioned whether new deadlines to plug wells would hurt smaller oil and gas operators. Middelton defended his bill.

He told the committee his proposal considered the financial strains it could put on smaller operators.

“But at the end of the day, we’ve got way too many inactive wells. What are we going to do about that?” he said.

The committee was not convinced by Middleton’s assurances.

“There are certainly concerns you heard from (the oil and gas) industry and members of the committee,” said state Sen. Brian Birdwell, R-Granbury, who chairs the committee. “So I would entertain that you…continue to develop the situation, see what you might put in front of us in the coming weeks that is something we can move forward with.”

Inactive wells do not produce oil or natural gas. They are considered “orphaned” when they have no clear owner or if the company in charge of them is bankrupt. In an annual report detailing its oil field cleanup efforts, the Texas Railroad Commission estimated roughly 8,300, or 5% of all inactive wells, are orphaned. In 2024, the Railroad Commission plugged a little more than a thousand of them, costing taxpayers $34 million.

The commission is the state agency tasked with regulating the oil and gas industry and has been charged with overseeing the blowouts.

Orphaned wells have become a conduit for water previously used for fracking, typically stored in deep underground rock formations, to burst onto the surface. Left ignored, these wells threaten groundwater resources and public health. The brine that leaks or shoots uncontrolled flows of water upward contains a colorless, odorless, incredibly toxic gas known as Hydrogen Sulfide or H2S. Water has blown through at least eight wells since October 2024, according to ranchers in the West Texas region.

Last fall, the commission, in a letter, said it could no longer keep up with the growing cost of plugging them. It asked lawmakers for an additional $100 million just to keep up — about 44% of its entire two-year budget.

Under existing law, oil and gas companies can request what the commission calls an extension to lengthen a well’s inactive status indefinitely, which means they won’t have to plug it. Operators can obtain extensions for individual wells or a blanket renewal for every inactive well in their portfolio.

Middleton’s bill would change that. Oil and gas companies would be required to plug wells that have been inactive for at least 15 years.

The legislation also allows the commission to grant exceptions so long as the operators that request one submit a plan to plug the well. The commission can evaluate different factors, including the number of the operator’s inactive wells, how long they’ve been inactive, and a plan to plug them before deciding. Called compliance plans, operators have until 2040 to fulfill it. The commission can also consider risks to public safety and the environment when evaluating wells that just turned 15. This is not the case under the law now.

Industry leaders representing operators statewide mostly assured lawmakers their members could comply. But it would hurt their bottom line.

Karr Ingham, an economist and president of the Texas Alliance of Energy Producers, said any bill setting limits would lead to damaging expenses. He said 20-25% of an operator’s inventory can consist of inactive wells.

“We want to make sure that this bill is as workable…for our folks as it could be,” he said.

Michael Lozano, who leads government affairs and communications for the Permian Basin Petroleum Association, said lawmakers should consider giving operators more time to prepare. Finding companies to plug the wells, he said, could be a challenge for them.

Environmental policy experts and landowners said the legislature should give operators shorter time frames to plug inactive and dried-up wells before they become problematic.

Virginia Palacios, executive director of Commission Shift Action, a nonprofit group that lobbies at the Capitol for stronger oil and gas industry policies, told The Texas Tribune she was excited a bill had been proposed, adding it needed stronger language. An ideal deadline would give operators 10 years to plug their inactive wells.

“It’s sort of like a soft touch on an industry that has been running a Wild West strategy on inactive walls for a long time,” she said.

Schuyler Wight, a West Texas rancher whose land is dotted with wells, some of which are leaking, did not support the bill. It is common in West Texas for oil and gas producers to operate on privately owned ranches. Wight said the Railroad Commission should make plans to plug wells public and alert the landowner when an operator conducts testing and if they are following through with plugging.

Todd Staples, president of the Texas Oil and Gas Association, an industry trade group, applauded the bill, saying the group supports it. In an emailed statement, he said $55 million in fees paid by operators are given annually to state-managed plugging programs.

He said he does not support shorter time frames to plug the wells because operators need a “phase-in” period to comply with the law.

At the hearing on Wednesday, he appeared confident that operators could bear the brunt of any costs imposed by Middleton’s bill.

“It’s a duty to landowners, it’s a duty to the legislature, and it’s a duty to the industry,” Staples said. “Once these wells have reached beyond that point, they are plugged,” Staples said.

Article originally published by The Texas Tribune. To read the originally published article, click here.