Texas to Expand and Accelerate Orphan Well Plugging with Federal Funds

Tue, February 01, 2022

With the recent passage of the Bipartisan Infrastructure Bill, $4.7 billion dollars has been allocated for the plugging of orphan wells across the United States. While each state has a different definition of what constitutes as an orphan well, Texas defines it as an inactive and unplugged well that has not produced oil or natural gas for at least 12 months.

Plugging a well is an essential step in managing the lifecycle of a well to prevent oil and natural gas reservoir fluids from escaping the well. This prevents any potential contamination of groundwater and surrounding areas, an important measure to ensuring public safety.

President Biden signed the Bipartisan Infrastructure Bill into law this past November, and funds will begin to be distributed at the end of February. So far, 26 states have applied for federal funding to plug and fully restore the surrounding area of orphan wells. Naturally, top producing states like Texas, New Mexico, Oklahoma, West Virginia, Pennsylvania, and Ohio have all applied for funds. According to the Department of Interior, there are an estimated 130,000 wells nationwide that need to be plugged. Hundreds of thousands of wells in need of plugging also means a rise in job opportunities for the industry as strategies are developed to address these wells.

Texas operators have a reputation for being responsible producers. Modern wells are rarely, if ever, orphaned, with 92 percent of plugged wells in Texas completed by the operators without the use of state funds. However, thousands of orphan wells across the United States remain from the wildcatting days of decades past. It is these wells that led the Texas Railroad Commission (RRC) to establish a well-plugging program, known as the State Managed Plugging Program, in 1984.

The State Managed Plugging Program is paid through industry fees rather than taxpayer dollars. This program manages wells that are considered orphaned in accordance with state laws and regulations. The RCC prioritizes which orphan well needs to be plugged based on its potential risks to the environment and public safety. In the last four years, the RCC has not only met, but exceeded performance targets, with 1,477 orphan wells being plugged in fiscal year 2020.

“The State-Managed Plugging Program is an important part of our critical mission to protect public safety and the environment,” said the Texas RCC’s assistant executive director. “The program also helps to employ oilfield service company workers throughout Texas. These employees are contracted and supervised to plug abandoned orphan wells by the Railroad Commission of Texas.”

Since the program’s establishment, 41,132 orphan wells have been successfully plugged, and with the release of additional funds from the Infrastructure Bill, Texans can expect to see even more progress made toward plugging the state’s orphan wells.

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