Abandoned or "orphaned" oil and gas wells can present a significant environmental hazard to their surrounding communities – particularly in West Texas. A bill that would make it easier to plug such wells, Senate Bill 1146, is on the verge of becoming law.
As of August 2024, there were roughly 8,347 orphaned oil and gas wells in Texas, properties for which the original owners can no longer be found and which may have long since gone out of business.
"The majority of those are not problematic," said petroleum economist Karr Ingham, president of the Texas Alliance of Energy Producers, "but the few that are are largely in certain areas of the state, and they're high profile. I mean, they're creating lakes of dirty water. They're leaking gases into the air that are not healthy."
Such properties may now be attached to active oil and gas leases or pieces of land for which someone may own the mineral rights. The current owners are under no obligation under existing Texas law to plug the wells. But if they choose to do so, they could incur legal risks.
"This is an expensive proposition, tens of thousands of dollars, by the way. But they may decide to undertake this outlay of tens of thousands of dollars to plug a well that they don't own and have nothing to do with," Ingham said. "What they don't want, though, is to plug that well and then have something go wrong later for which they would potentially be held liable or accountable."
If the lease or mineral rights owners don't plug the wells, the only party left to deal with them is the Texas Railroad Commission, the state agency that oversees the oil and gas industry. Last year, the commission plugged 1,750 oil and gas wells, but only reduced the net population of orphaned wells by 73 – barely making a dent in the problem.
SB 1146 would streamline the process of plugging such a well by reducing that potential legal risk.
"We've kind of referred to it as the ‘good neighbor bill,'” Ingham said, “because it allows operators to be good neighbors and take care of potentially problem wells with limited liability going forward."
SB 1146 passed the House unanimously Thursday morning. That's the last step before it goes to Gov. Greg Abbott's desk.
A related bill could soon come up for a House floor vote. SB 1150 would address the population of wells that are inactive, but whose owners are known and can still potentially operate them.
"Inactive wells are virtually never an environmental problem on their own, because they remained under the control and ownership, responsible ownership of a current operator licensed to do business in the oil and gas industry in Texas," Ingham said.
The concern is that such inactive wells stand a high risk of becoming orphaned at some point in the future. To reduce that risk, SB 1150 would require that — effective in 2040, 15 years from now – wells that have been inactive for 15 years and are 25 years or older must either be plugged or reactivated.
The bill has drawn some pushback from environmentalists and ranchers, who don't think it goes far enough to address the problem. Schuyler Wight, a rancher from Goldsmith in the Permian Basin, spoke in opposition to the bill before the Senate Committee on Natural Resources.
"And the reason why is because I think the bill just kicks the can a little further down the road," Wight said. "It's going to be 2040 before the clock starts kicking in, and then they have to start plugging wells."
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