Texas Oil and Gas Industry is Meeting the Challenge of Plugging Orphan Wells
Thu, August 24, 2023
Oil and gas producers across Texas are committed to ensuring long-term, sustainable energy production. With practices and policies in place from both the Texas Railroad Commission (RRC) and individual operators, the state has established responsible oil and gas operations throughout an asset’s life cycle, including asset retirement.
Contrary to what opposition to the industry says, well plugging has been an integral part of the post-production process for the past 40 years and operators across Texas have set the standard for proper retirement protocols when these assets reach the end of their producing lives.
From start to finish, Texas producers implement industry-leading operational guidelines that are mimicked across the globe and are directly involved in funding and supporting orphan well clean-up, with over 20 different revenue sources funding the RRC Oil and Gas Regulation and Cleanup Fund.
“Orphan wells” are defined as inactive wells that have not gone through the plugging process or do not have identifiable owners. In Texas, the RRC defines orphan wells as inactive or unplugged wells that have not produced oil or natural gas in 12 months.
“Texas has the most robust well-plugging program in the country, with the oil and gas industry directly and indirectly funding these efforts. Oil and natural gas operators typically plug more than 90 percent of known wells in Texas in a given year, including 7,886 wells plugged by the industry in fiscal year 2022,” Texas Independent Producers & Royalty Owners Association’s (TIPRO) President Ed Longanecker said.
In 2022, the RRC exceeded its target of plugging abandoned oil and gas wells for the fifth consecutive year. In fact, Texas began plugging orphan wells in 1983 and was the first state to use federal Infrastructure Investment and Jobs Act funding to plug these wells. Currently, only approximately 3 percent of known wells in the Texas are orphaned— an impressive feat considering the Lone Star State is home to the largest shale basin in the United States, producing an average of 5.7 million barrels of oil each day.
A majority of orphaned wells are from legacy operations, rather than present-day producers, and the industry is actively working with the regulators, and policymakers to address, document, and plug these wells.
This year, the 88th Texas Legislature allocated $77.7 million in 2024 and $71.1 million in 2025 to the OGRC to support both orphan well plugging and oilfield site clean up. Longanecker explains these funds are “generated from regulatory fees, permit fees and bond fees paid by the oil and gas industry to the RRC.”
Additionally, RRC regulations require operators to utilize cement plugs at various intervals throughout the wellbore to prevent fluid or gas releases into the air or groundwater, once again demonstrating the responsible management of asset retirement throughout the operational cycle at both the individual operator and state regulatory level.
As you can see, the Texas oil and gas industry is committed to ensuring long-term, sustainable operations and is working diligently to address the challenge of orphan wells head on, ensuring the responsible management of wells for the entirety of their life cycles.