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August 2010 — Web Exclusive

Wells They Leave Behind

In fiscal 2009, RRC spent more than $16 million on well capping, the second-highest total in its history.

State Cleans Up When Production Stops

by Clint Shields

For more than a century, Texas has been the nation’s energy king. And the state’s oil patch, pin-cushioned with hundreds of thousands of wells, shows it.

But oil and gas wells don’t produce forever. Some never produce at all.

When a well reaches the end of its production life — or is abandoned as a dry hole — the Railroad Commission of Texas (RRC) can step in to prevent problems. Wells that have been inactive for a year or more can be classified as “orphaned” and slated for permanent capping.

And in the last six years, RRC’s aggressive well-capping program has cut the state’s number of orphan wells by more than half.

Safe in the Ground

While the oil and gas industry’s goal is to remove resources from the ground, keeping oil and other contaminants in the ground when wells stop producing is just as important.

“Pollution of groundwater is the biggest threat posed by orphan wells,” says Ramona Nye, a spokesperson for the RRC. “Wells may act as conduits, bringing oil and gas hydrocarbons from below ground and into aquifers, so the proper plugging of these wells is essential to prevent this potential pollution threat.”

More than 90,000 Texans work in oil and gas support activities, which includes well capping.

There are plenty of potential hot spots to go around. In August 2009, RRC was tracking more than 389,000 wells in Texas, 11,000 more than in August 2008. Of those, about 7,900 were classified as orphan wells. But more than 110,000 of those wells were classified as inactive. To avoid having inactive wells classified as orphaned, owners must keep their paperwork with the state current, usually through a form called a P-5 Organization Report.

Tracking wells can be tricky, Nye says, as they can move in and out of orphan status due to paperwork lapses, changes in ownership and other factors.

Filling In

RRC received more authority for its well cleanup and capping efforts when the 1991 Texas Legislature created the Oil Field Cleanup Fund (OFCF), which replaced a prior Well Plugging Fund, and again in 2005, with the creation of the Orphan Well Reduction Program.

The OFCF supports RRC’s well capping efforts. Funded primarily through fees paid by oil and gas companies as well as enforcement penalties and reimbursements, about $156 million in OFCF money has been used to plug more than 26,000 Texas wells since 1992. That’s an average of more than 1,500 capped wells per year, and more than triple the average capping rate before the fund’s creation.

In all, RRC’s well-capping program has slashed the state’s total of orphan wells from nearly 17,000 in 2003 to less than 8,000 in 2009.

And the effort isn’t slowing down. In fiscal 2009, RRC spent more than $16 million on well capping, the second-highest total in its history.

“Proper plugging eliminates the pollution threat posed by an unplugged well,” Nye says.

The Orphan Well Reduction Program, on the other hand, allowed RRC to reimburse landowners or well operators for capping abandoned wells, paying up to half of either the actual cost or RRC’s average cost for plugging similar wells in the same area within the preceding two years, whichever is less.

During the program’s two-year run, it paid more than $107,000 in reimbursements to owners and operators who capped 13 wells and returned 41 to production. Active operators took over an additional 133 orphan wells, but did not file for reimbursement. Those wells are either producing, temporarily shut down or plugged. The program ended in 2007, but reimbursements can still be paid through December 2010. FN

Visit the Railroad Commission of Texas to learn more about well-capping and cleanup efforts.

Doing Well by Orphan Wells

Increased funding and aggressive capping efforts have helped the Railroad Commission of Texas steadily reduce the state’s orphan well count.

Aug. 200316,770
Aug. 200415,305
Aug. 200514,208
Aug. 200611,287
Aug. 20079,579
Aug. 20089,323
Aug. 20097,900

Source: Texas Railroad Commission

An abandoned well can serve as a vertical pipeline, transporting toxic brine water from deeper geological formations directly into shallow freshwater aquifers.  Abandoned wells are plugged or capped by filling sections of the well with cement to ensure that oil and brine cannot travel into freshwater formations. After the cement plugs are in place, the wellhead equipment is removed and replaced with a cap that is subsequently buried.
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