Texas Railroad Commission: A barrier to Biden’s energy plan?

By Mike Lee | 04/11/2022 06:40 AM EDT

A high-profile leak, which is being investigated by Texas regulators, could serve as a warning for the Biden administration as it tries to move the country’s economy to cleaner forms of energy.

A well blowout in West Texas.

A well blowout in West Texas, shown here in January, has highlighted long-standing concerns about the state's ability to oversee and prevent pollution from thousands of abandoned oil and gas wells. Photo courtesy of Ashley Watt

Around New Year’s Day, an abandoned well began spewing a stream of salty brine 75 feet or more into the sky in West Texas’ Permian Basin oil field.

The geyser-like stream, which was visible from a nearby highway in a rural area of Crane County, Texas, was several times saltier than ocean water and coated the surrounding grass and scrub brush with crystals.

Months later, landowners, state regulators and Chevron Corp. are still trying to figure out who drilled the leaky well and whether it was originally intended to be an oil well, a water well or something else.


The high-profile leak, which is being investigated by the Texas Railroad Commission, could serve as a warning for the Biden administration, which is trying to switch the country’s economy to cleaner forms of energy and away from oil and gas.

Texas produces about 40 percent of the country’s crude oil and about a fourth of its natural gas. That means long-term energy reforms — including those pushed by the federal government — are likely to hinge on the commission, the unique elected body that governs the state’s drilling and pipeline industries.

The commission has been in the middle of debates about fracking, methane pollution, water contamination and the long-term future of the conventional energy industry. And it will play a central role in the administration’s plans to cut greenhouse gases and fix abandoned oil and gas wells.

“The feds can certainly hike the ball, but it’s going to take the commission to move it beyond the line of scrimmage,” said Brandon Rottinghaus, a political science professor at the University of Houston who follows Texas politics.

That dynamic was highlighted in the bipartisan infrastructure plan backed by President Joe Biden and approved by Congress in the fall, and its $4.6 billion to plug abandoned oil and gas wells around the country (Energywire, Nov. 23, 2021).

Texas already has a well-plugging program paid for with a statewide fee on oil production, and it has applied for an initial $25 million grant from the new federal funding. The state could get hundreds of millions more as the Interior Department doles out future tranches of orphan wells funding.

But landowners, activist groups and some local government officials say the state has historic problems regulating and monitoring abandoned oil wells. They say the problem is intertwined with the oil and gas industry’s historic political power in Texas, including its relationship with the Railroad Commission.

The three members of the commission are elected statewide, and they typically have received more than half their campaign funds from the oil, gas and pipeline industries (Energywire, Nov. 1, 2018).

The state’s historically loose ethics laws allow the three commissioners to maintain business ties with oil and gas companies, a practice that is illegal in some other states. In Oklahoma, for instance, the state Corporation Commission members aren’t allowed to have any financial interest in the companies they oversee.

“It’s hard to prove to the public you’re making an unbiased decision if two-thirds of your funding is coming from the industry,” said Virginia Palacios, executive director of the nonprofit group Commission Shift.

Suggestions for reform have largely been quashed because of the oil industry’s influence in the state capital, according to observers. Basic changes, like altering the commission’s name to reflect its actual job — the Railroad Commission hasn’t dealt much with trains since the 1980s — have failed to get passed.

The commission and the state Legislature also have weakened Texas’ program to clean up and plug orphan wells over the last decade.

None of the commissioners agreed to interviews for this story. The Texas Oil and Gas Association dismissed the criticism of the commissioners and the commission’s environmental record as “typical election year hyperbole.”

“The current Commission has been very strong on ensuring accountability from its regulated entities and has consistently moved Texas in the right direction to ensure our state continues to be the leader in producing the energy that makes modern life possible in a cleaner, stronger and better way,” Todd Staples, the association’s president, said in an emailed statement.

Reduced fees and thousands of wells

Like most states, Texas requires oil producers to put up financial assurance aimed at covering the cost of plugging wells at the end of their life. But the bond amounts aren’t enough to cover plugging costs in most cases.

In 2015, lawmakers reduced the fee dedicated to regulatory and cleanup costs that it levies on each barrel of oil production. In 2020, the Railroad Commission voted to waive a rule that requires companies to plug a well if it’s been abandoned for a year with no production.

The state currently has tens of thousands of wells that have been sitting idle or even abandoned for decades.

Unless the state acts aggressively to force their operators to properly plug them, the operators could walk away and leave the taxpayers responsible for the problem, Commission Shift, the nonprofit group, said in a report in January.

The state also allows companies to transfer old wells to new operators without updating their bonds, which increases the risk that the cleanup cost will fall to the Railroad Commission, according to Commission Shift.

In its most recent year, the commission spent $36.2 million to plug more than 1,400 wells only to see more wells abandoned by their owners added to the state’s list of orphans. The tally of abandoned wells stood at more than 7,000 at the end of the state’s fiscal year in August.

Texas also has no program to oversee wells once they’ve been plugged, either with state funds or by private companies. The state has hundreds of thousands of wells, and many of them date to the wildcatting era before any records were required.

At least three candidates in this year’s election, including two people who challenged Commission Chair Wayne Christian in the Republican primary, have highlighted the Railroad Commission’s environmental record as part of their campaign.

Sarah Stogner, an attorney who works for a landowner in a high-profile pollution case, forced Christian into a runoff for the Republican nomination, which is scheduled in May. Stogner released an attention-grabbing video for the campaign in February that showed her wearing pasties, sitting on top of a pumpjack in West Texas.

Stogner, who has refused to take campaign donations, has used the public attention from the video to talk about Christian’s close ties to the oil executives who fund his campaign. The winner of the runoff will face Democrat Luke Warford in the general election in November (Energywire, Jan. 25).

Christian has campaigned as a defender of Texas’ oil and gas industry. He’s criticized renewable energy and investors who focused on environmental, social and governance concerns. And he said the Biden administration should promote conventional domestic energy to help with high fuel prices.

“It’s time to switch the lights from red to green,” Christian wrote on the commission’s website. “We should be divesting from hostile countries and harnessing American oil and gas right here in the Permian Basin.”

Pressure underground

The challenges with the state’s well plugging and record keeping were on display when the New Year’s Day blowout in Crane County was reported.

The exact cause was still under investigation at the end of March, according to a Railroad Commission spokesperson. Experts agree, though, that water in the arid stretches of West Texas doesn’t normally spew from the ground under natural conditions.

“Generally water is not under that great a pressure underground here,” said David Rosen, a retired geologist who lives in Midland.

The Railroad Commission first responded to the site on Jan. 2 and sent out a contractor to get the flow of briny water under control, Clay Woodul, the commission’s assistant director for oil field operations, said during a meeting in January.

Tests show the fluid doesn’t contain oil or other hydrocarbons, but it’s several times saltier than ocean water, and photos taken by a neighboring landowner show the surrounding scrub brush covered in salt crystals, which could pose a threat to groundwater and vegetation around the site.

It wasn’t until Jan. 10 that state investigators determined who they thought was responsible, and they still weren’t certain in February. The commission’s records indicated the fluid was spewing from a core test well drilled by Gulf Oil Corp., which is now part of Chevron.

Chevron took over the cleanup operation and stanched the flow on Jan. 17. Then its crews excavated the area and found that the core test well was 10 feet from the well that had been spewing the water, Woodul said.

“We have not been able to identify the well yet,” he said in January.

The manager for the ranch where the blowout occurred declined to comment. A commission spokesperson said last week the well was brought under control in January — and that the commission is working with Chevron and contractors to plug it.

About 5 miles up the road, another ranch owner has been fighting with the Railroad Commission and Chevron since last summer to clean up similar blowouts on her property.

Ashley Watt, whose family has ranched in the area since 1914, hired Stogner as her attorney and paid for her own experts to investigate the leaks on the 21,000-acre Antina Ranch.

The Antina Ranch is home to more than 200 wells, operated by several different companies. Some of them are still producing, some of them are plugged. Chevron’s wells on the ranch were originally drilled by Gulf Oil in the 1950s and 1960s. Shortly after that, the field was flooded with water to boost its production, and the wells were plugged in the 1990s.

Watt’s experts believe the water flooding operation is the cause of the problem. Their theory is that Chevron or its predecessors over-pressurized the field with water in their effort to squeeze out more oil. The pressure created an underground blowout in one of the wells that allowed brine to infiltrate one or more of the freshwater aquifers under the ranch.

In a chain reaction, the brine spread through the groundwater and began to corrode other, plugged, wells from the outside. If Watt’s theory is right, the two wells that have already leaked on her property are just a harbinger — the underground pressure her experts have documented could be contributing to the Jan. 1 blowout, and other wells in the area could be in danger of failing.

‘We have seen no evidence’

In adjacent Pecos County, officials from the local groundwater control district have been coping with similar problems for years. One leaking well has been flowing continually since at least 2016, creating an artificial lake so large that it’s threatening a nearby state highway.

The Middle Pecos Groundwater Conservation District has identified about 40 wells in its jurisdiction that are “critical” and need to be plugged, Cole Ruiz, an attorney for the district, told the Railroad Commission in February.

“Those wells have either been plugged improperly, or the plugs failed, or they’re sitting unplugged,” he said.

The Railroad Commission has previously argued that it can’t plug some of the Pecos County wells because it lacks jurisdiction, according to published reports. Some of the wells were originally drilled by oil companies but turned over to landowners for use as water wells. The surface owners couldn’t afford to plug them when they began leaking brine, and the state has argued that it can only plug abandoned oil and gas wells.

In Watt’s case, the Railroad Commission has largely sided with Chevron in its investigation of the leaking well, Watt said, refusing her request to order widespread groundwater testing around the leaking well. The commission hasn’t found evidence of water contamination, but a spokesperson said Watt has hampered the investigation by blocking Chevron’s access to the single monitoring well the company installed.

Spreading the blame is a common tactic in oil pollution cases, said John Baen, a professor who specializes in real estate at the University of North Texas. Limiting the scope of the investigation makes it harder to pinpoint the source of the pollution, and easier for oil companies and regulators to argue that a specific case of water contamination could be caused by another source.

“These oil companies have a lot of defenses — they can say, ‘It was somebody else upstream, there was an oil tank that was leaking on that other property over there,’” he said.

Indeed, Chevron made that argument about Watt’s ranch in a written response to E&E News. Chevron sold its wells on the Antina Ranch to another operator shortly before Watt reported the leaks.

“There have been many operators and lessees present at Antina Ranch over the past several decades,” Chevron spokesperson Deena McMullen wrote. “We have seen no evidence to substantiate Ms. Watt’s claims.”

Likewise, the company said there’s no evidence that it is responsible for the Jan. 1 blowout, although Chevron was still working at the site in February.

As for Watt’s theory that the historic over-pressuring of the field contributed to the latest blowout, McMullen noted that the site is 5 to 7 miles from Watt’s property. In West Texas, many ranches stretch for miles; Watt’s property is roughly 10 miles north to south.

Watt, 35, is a former Marine who served in Afghanistan. She describes herself as politically conservative, but the experience with the Railroad Commission has turned her into a reformer.

“The system doesn’t work if only the rich ranchers get to be treated fairly by the Railroad Commission,” Watt said. “And the rich ranchers aren’t even getting treated fairly by the Railroad Commission.”