Abandoned oil and gas wells threaten Texas’ environment. Will taxpayers foot the bill?

“If we don’t recognize that these bankruptcies are going to continue and do something both to prevent the bankruptcies and hold the operators accountable on the front end, then we’re going to be leaving this state with a huge mess to clean up,” said Virginia Palacios, the executive director of Commission Shift. “That’s going to fall on the taxpayers’ shoulders.”

Palacios, who launched Commission Shift this month after several years as an environmental analyst, said the problems surrounding abandoned wells are likely to outgrow the commission’s existing funding sources.

One reason is that wells drilled with hydraulic fracturing or horizontal drilling methods leave larger amounts of chemicals behind and are much deeper than traditional oil and gas wells.

“The cost of plugging a hydraulically fractured well and a deeper well is much higher, and we have not updated the bonding program to account for that higher cost,” Palacios said.

Her organization is pushing for reforms to push companies to take care of their inactive wells themselves before the cleanup costs are passed to the Railroad Commission. Those recommendations include potentially increasing fees and bonding requirements for companies, which Palacios argues would deter operators from leaving inactive wells unplugged and shedding liability if they go bankrupt later.

“We’re in the middle of an energy transition, and I think it’s happening faster than people realize, faster than the commission is willing to acknowledge,” Palacios said. “We need to restructure the ways that we hold operators accountable for doing what they’re supposed to do. But we also need to think about how to fund the Railroad Commission going forward with a decelerating instead of accelerating oil and gas industry.”

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