Legacy of the Abandoned Well

The abandoned oil and gas well is a mysterious hazard. Nobody really knows how many there are in the United States, or where they are. But its potential hazards are known.

An improperly plugged well has the potential to emit methane gas into the surrounding environment, with said gas having over 80 times the potential for atmospheric warming over time compared to carbon dioxide. There is also the potential to leak toxic water onto the surface, which could contain concentrations of benzene, a colorless, highly flammable carcinogen. Other hazards are more visible, such as abandoned pumpjacks, pipelines, and holding tanks, which often show signs of corrosion.

There are potentially hundreds of thousands of abandoned oil and gas wells in the country, though many are poorly documented, if documented at all. In Texas, there are over 41,000 documented abandoned wells, and over 140,000 “inactive” wells. Inactive wells are not yet declared abandoned but may or may not ever return to production.

Many abandoned wells are never plugged. Ideally, the operator of the well plugs the well upon its abandonment. But when an operator becomes insolvent, the well becomes an “orphan” well, and it is the responsibility of the State and its taxpayers to plug it.

To decrease the State’s burden, many states require the operator to give some form of financial assurance. Typically, this comes in the form of a bond, although the bond is woefully inadequate. For example, in Texas and in New Mexico, an operator with 100 or more wells must file a $250,000 bond. That amounts to $2,500 per well for plugging. The reality is, it costs much more than that to plug a well, ranging anywhere from $15,000-25,000, though possibly higher.

When the State does step in, their budgets only go so far. In Texas, for example, the State’s regulatory agency plugged only 1,477 wells in 2020, and their goal was actually less than that. The year prior, their goal was less than 1,000 wells plugged. Thus, it would take several decades to plug every documented well, though likely much longer as new orphan wells are encountered each year.

To complicate the issue, even when a well is plugged, is it plugged correctly and strong enough to stand the test of time? This past summer, a well in West Texas that was believed to have been properly plugged 20 years ago began to spew toxic water at the surface. While the operator was quick to ameliorate the situation, many questions remain. Why did the plug fail? What will be the long-term affect of the toxic water released onto the surface? Was there any harm to the underground water reservoir that runs under the that region?

Luckily, the operator of the well just described is a major, multinational oil company. They have the money and mobility to address the situation quickly and are cognizant of the P.R. involved. However, with regards to older oil fields, it is much more likely that a smaller, independent operator is operating. When this is the case, a question remains whether the operator is financially able to quickly assess and fix a problem and reverse any damage caused.

Oil producers know much more than they did a few decades ago. But, nobody knows what they don’t know and the potential for hazard will remain. Producers and States will have to remain ever vigilant to these lurking hazards.