This was a disappointing read about our handling of oil and gas wells in the Permian Basin in Texas and New Mexico, which is the most productive oil field in the United States. There are a lot of wells in some of these areas - around one well for every two people in Pecos County, TX.

The problem is that many of these wells are abandoned when oil prices fluctuate, or when they are bought and sold in groups and are no longer used. As a typical example, one well in TX has had 7 owners since it was drilled in 1981, and has been inactive for at least 18 of the years it has existed. Many of the wells are on private land, where the land owner really only owns the surface of the land, but the oil/gas companies have rights to everything underground.

These abandoned wells can begin to leak, due to either faulty construction or normal degradation over time. They leak oil, gas, or produced water, which is considered industrial waste. On top of this, it was discovered that some wells begin to leak methane - a greenhouse gas. There’s some evidence that the quantity of these methane leaks make them a notable contributor to climate change. Oil may also seep into nearby groundwater and poison drinking water sources.

When a well becomes inactive, it’s supposed to be plugged up with concrete, and the surrounding area/equipment should be cleaned up. Texas and New Mexico both take flat rate bonds ahead of time to cover these costs. Unfortunately, the large number of inactive wells and actual costs of plugging them far outstrip the funding provided by these bonds. In 2015, these flat rate payments covered a sixth of the costs actually needed for cleanup in Texas. If we take the 1500 well operators in Texas with the most inactive wells, each company averages more than 60 of them.

Costs can vary depending on the well and its location, but expenses for plugging a single well are easily in the neighborhood of $30k, with some wells estimated to cost $100k each(!). In addition, companies can avoid or delay additional cleanup payments by reporting to the state that the wells did produce a small amount of oil, meaning they are technically ‘active’. The states don’t have the funding or capacity to inspect every well and verify these claims.

New Mexico and Texas combined have a list of about 7,000 wells that are known to be inactive and need plugging. The model referenced in the article estimates that in the next 4 years, an additional 12,000 wells in the two states will become inactive. Total cost estimates for plugging all of those wells comes out to a little under a billion dollars. Of course, the states don’t have nearly enough funding from the well operators to cover this. The oil, gas, gross water, and methane will start leaking eventually…