ODESSA — On Tuesday, a legislative committee will convene to hear from the Texas Railroad Commission as the agency prepares to revise its regulations concerning inactive oil and gas wells, a requirement established by state law.
The Railroad Commission is responsible for overseeing oil and gas production in Texas, which includes managing nearly 160,000 inactive wells. Many of these wells are at risk of becoming “orphaned,” meaning that the responsible operator has either disappeared or declared bankruptcy for at least a year. If left untended, these wells can leak oil and gas wastewater, leading to significant environmental hazards and financial burdens, often costing taxpayers millions of dollars in remediation. Currently, Texas is dealing with at least 12,000 orphaned wells.
Presently, oil and gas companies have the ability to prolong the timeline for plugging inactive wells indefinitely.
The House Energy Resources Committee, chaired by state Rep. Drew Darby, R-San Angelo, will discuss the agency’s strategies for addressing this pressing issue during the upcoming meeting, which will be streamed online.
Ben Sheppard, president of the Permian Basin Petroleum Association, emphasized the industry’s commitment to adhering to legal and regulatory obligations regarding both active and inactive assets, including the crucial task of plugging inactive wells. He remarked that it is essential for operators to reduce the number of inactive wells and expressed support for reasonable measures that would strengthen these requirements while still allowing operators to activate wells economically rather than plugging them.
During the 2025 legislative session, lawmakers passed a bill sponsored by state Sen. Mayes Middleton, R-Galveston, which mandates that oil companies must plug wells that have been inactive for an extended period.
Industry professionals and environmental policy analysts have noted that while the law is a step in the right direction, it should enforce stricter standards on operators to enhance its effectiveness.
Under Senate Bill 1150, operators are required to plug wells that have been dormant for 15 years. However, they can still apply for extensions under various conditions, such as having a track record of successfully plugging inactive wells or facing financial constraints. If granted, operators would need to complete the plugging by 2042.
Nikki Morris, a geologist and executive director of the Ralph Lowe Institute of Energy at Texas Christian University, pointed out that the current legislation allows operators to keep wells inactive for nearly indefinite periods, indicating significant flexibility within the rules.
Experts are also advocating for the Railroad Commission to revise the state’s financial assurance requirements for operators, which are meant to guarantee that they can cover the costs of plugging inactive wells. Currently, the financial assurance is calculated based on two criteria: the well’s depth at a rate of $2 per foot or the total number of wells an operator owns. For example, an operator with ten wells is required to provide just $25,000 in assurance, a mere fraction of the potentially millions of dollars needed to remediate a single well.
Adam Peltz, senior director and legal counsel at the Environmental Defense Fund, expressed hope that the Railroad Commission would scrutinize extension requests more rigorously and establish stringent criteria for companies seeking them.
