A state legislative committee is set to hear from the Texas Railroad Commission on Tuesday as the agency prepares to update its rules regarding inactive oil and gas wells, a measure now required under state law. The focus of the hearing will be to address concerns over the environmental and financial risks posed by untended wells across Texas.
The Railroad Commission, which regulates oil and gas production, oversees nearly 160,000 wells statewide. Many of these are at risk of becoming "orphan" wells, a designation for wells whose operators have gone missing or been bankrupt for at least 12 months. Texas currently has at least 12,000 such orphaned wells.
Left unattended, these inactive wells can become conduits for oil and gas wastewater, potentially causing environmental damage. The costs to fix these issues can amount to tens of millions of dollars, which taxpayers ultimately bear.
Currently, oil and gas companies have the ability to indefinitely extend the period during which they must plug inactive wells.
During the 2025 legislative session, lawmakers passed a bill, authored by state Sen. Mayes Middleton, R-Galveston, aimed at requiring oil companies to plug wells that have been inactive for an extended time. Under this new legislation, Senate Bill 1150, operators must plug a well once it has been inactive for 15 years.
However, the law includes provisions that allow operators to request extensions under various circumstances. For example, regulators can consider requests from operators with a documented history of plugging other inactive wells. Another provision permits extensions for companies that cannot afford to plug a well. If an extension is approved, the company would have until 2042 to complete the plugging process.
Industry experts and environmental policy analysts have noted that while beneficial, the new law could benefit from stricter requirements to be fully effective. Nikki Morris, a geologist and executive director of the Ralph Lowe Institute of Energy at Texas Christian University, observed that there is "a lot of wiggle room" in the current legislation, suggesting operators could keep wells inactive for an almost indefinite period.
Experts have also recommended that the Railroad Commission update the state’s financial assurances, or bonds, which are intended to ensure operators can afford to plug inactive wells. Presently, the state mandates assurances calculated either by the depth of the well, at $2 per foot, or by the total number of wells an operator owns. For instance, an operator with 10 wells only requires $25,000 in assurance. This amount represents a fraction of the actual cost to remediate a single well, which can reach millions of dollars.
Ben Sheppard, president of the Permian Basin Petroleum Association, commented on the hearing, stating that their members are committed to fulfilling legal obligations related to plugging inactive wells. He also added that it is "imperative" for operators to reduce the number of inactive wells and expressed support for reasonable efforts to strengthen requirements over time. However, he also emphasized allowing operators the opportunity to bring wells back into activity if they are economical, rather than plugging them.
Adam Peltz, senior director and legal counsel at the Environmental Defense Fund, expressed hope that the Railroad Commission will increase scrutiny on extension requests and establish stringent rules governing which companies can qualify for them.
The House Energy Resources Committee, chaired by state Rep. Drew Darby, R-San Angelo, will hear the agency's detailed plans, marking a significant step in the state's efforts to manage inactive oil and gas wells more effectively.
