With the dramatic drop in oil prices over the past year has come an increase in the number of financially distressed oil and gas drillers: they’re pulling up rigs and leaving wells behind says Texas Rep. Drew Darby, a Republican from West Texas.
“We’ve seen some that were over-leveraged and simply walking away. Certainly out in my part of the world, where you got producers simply walking away,” Darby said during a meeting of the House Energy Resources Committee with he chairs.
Darby says abandoned wells are a worry because if the wells aren’t properly plugged they can leak and become environmental hazards. The number of abandoned wells is staggering, now totaling some 12,000 statewide (that includes 9,500 known to be abandoned and 2,500 more that are under investigation according to the state).
The House Energy committee grilled the three members of the Texas Railroad Commissioner which regulates the oil industry. Their testimony worried lawmakers who said this is a time when oversight is more important than ever.
But the commissioners told them the state agency is having trouble hiring enough inspectors and has managed to fill only 41 positions out of the 63 it’s budgeted for.
What’s more, they said when wells are abandoned, the money that drillers pay up front as a bond covers on average a mere 17 percent of the total cost to clean up and plug a well.
Representative Rafael Anchia, a Dallas Democrat, questioned Railroad Commissioner Christi Craddick:
Anchia: “Have any commissioners ever asked that be increased, have you ever asked that that be increased?
Craddick: “I haven’t, that’s not been a priority for us at this point.”
Anchia: “Do you think 9,500 abandoned wells is a problem?”
Craddick: “Look, I think 9,500 abandoned wells is a lot better than when we started in 2003 with 19,000.”
Lawmakers said it was unbelievable that the agency that’s supposed to be a watchdog on the state’s dominant industry can’t keep up with it. They indicated they’ll be recommending changes.