Special report: The cost of aging oilfields

Published: Jun. 10, 2024 at 11:24 PM CDT

ODESSA, Texas (KOSA) - The cost of plugging orphan oil and gas wells has consistently made headlines, but one ProPublica and Capital & Main report looked at the potential plug jobs on the horizon.

Using thousands of government records, their report found it could cost about $37.9 billion to plug and clean up all unplugged oil and gas wells if the job falls to the state. However, companies have only allocated $565 million in bonds to the Railroad Commission, or the RRC, the state’s oil and gas regulator. That’s only around 1.5% of the estimated cost.

When a well reaches the end of its life, its clean up falls to the operator, or the state, if the operator orphans the well. State taxpayer dollars have not been used to plug any wells, according to the RRC. Instead, the commission pulls from a fund created by bonds and other oil and gas operator fees.

However, ProPublica and Capital & Main’s report suggests the cost of aging oilfields could fall on the taxpayer. Industry professionals disagree.

One West Texas rancher knows the burden of an aging oilfield and unkept equipment well. Oil and gas production has occurred on his family’s land for nearly 100 years. That rancher demonstrates what it looks like when the end of an oilfield’s life falls to an everyday person. At the same time, activists, experts and industry professionals share their opinions and insight on the dilemma.

Tune in to the video above for all of this and more.