We aren’t sure exactly how many abandoned wells there are in Texas but it’s “thousands.” From the TRC site:
The Texas Land & Mineral Owners Association explains how abandoned wells contaminate our drinking water. Their information on the number of abandoned wells in Texas is from 2003.
As of 2004, the estimated cost for plugging the abandoned wells was $2.5 billion to the Texas taxpayer. We give industry $4 billion in corporate welfare every year then we are left to clean up their messes. Is there a more irresponsible industry on this planet?
UPDATE: Please see discussion in comments. I could be partially wrong about taxpayers footing the bill because there is a cleanup fund. Now, I’m not known for my math skills, but I don’t see how paying $300, or $650 in expedited cases, is going to fund the plugging of all these wells and cleanup of “other environmental problems” without taxpayers kicking in.
The maximum fee, set by the Legislature in 2001, is $300, and the total can rise to $650 if a drilling company asks for an expedited permit and exceptions to density rules. By law, that money goes to a state fund to clean up plugged wells and other environmental problems.
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Each well in Barnett shale will cost about $250,000 to plug but most of these companies do not have the money to pay for this. Yes that's right!!! Companies like Chesapeake have no cash on their balance sheets to pay for such costs. They are struggling to keep drilling going in order to pay down debt. Plugging wells is not a high priority. It does not pay.
Also each of these sites is emitting chemicals such as BTEX, 1,2,4 trimethylbenzene, 1,3,5 trinmethylbenzene, chloromethane, dichlorodifluoromethane, carbon disulfide, reduced sulfur compounds and the list goes on and on…What you're not being told, however, is that most of these chemicals fall on the CERCLA register which make each of these pad sites a potential SUPERFUND site.
Dr. Theo Colborn testified before Congress a few years ago about this very topic regarding gas drilling. Google it. It is chilling.
I have served on the Oilfield Cleanup Fund Advisory Committee since its founding. We have never requested the use of any "taxpayer money" to plug abandoned wells. The cost of plugging abandoned wells is covered entirely from fees the industry pays into the cleanup fund. You are entitled to your own opinions, but not your own facts.
Wayne, if you are correct, that would certainly be good news and I have no problem admitting I am wrong.
Didn't I read something a couple of years ago about the TRC robbing the cleanup fund to pay for additional permitting staff. Yeah, I'm pretty sure about that.
Yes,there was one occassion where the RRC used some of the funds to add permitting staff, but that was resolved. The most significant threat to the fund is the act of "sweeping," where the Comptroller spots a surplus and earmarks it to the General Fund. We are working now to commit as much of the fund as possible before the end of the quarter so it's not lost when the legislature begins looking for resources to offset the deficit.
Look at the link cited here:
http://www.rrc.state.tx.us/commissioners/williams/environment/bondingfaq.php
The RRC is heavily involved–and it looks like this "fund" is only a bonding by the operator! Does any oil company actually pay regular dues into the Oilfield Cleanup fund??
We have 30+ abandoned wells within the city of Fort Worth and cannot find out the status of those "abandoned" wells or what condition they are left when the industry leaves town.
So, if the "fund" plugs abandoned wells, are they they ones who are responsible for the POORLY plugged wells in the Gulf?
Louis McBee
From what I know, an operator only puts up a rudimentary BOND of some small amount of money. When and if a well is abandoned by the operator, who probably went bankrupt and is now on the beach in Barbados (or elsewhere) enjoying life and the Tx taxpayers are left to find the "bond" and pay for the plug and abandonment of the bad well.
OK, here's the link, and both the RRC & XOM don't show these wells:
http://rancholoslosmalulos.blogspot.com/2010/04/that-is-not-on-our-map.html
Why plugging old wells is important:
http://www.tlma.org/collisioncourse.htm
Wayne: Two questions- You state that Industry has never 'requested' funds..does that mean they weren't given any? 2: What are exactly the fees the Industry pays into the clean up fund? Unless I'm misreading the info in the prior posts, one doesn't need a calculator to determine that as much as $650 towards each well doesn't clean up anything. What am I missing?
Wayne ole buddy, do you get any money from the taxpayers for serving on this "committee"? Bet you do. Please respond.
A little knowledge is a dangerous thing. If you had read the enabling legislation, you would know that the Committee is comprised of VOLUNTEERS representing the oil and gas trade associations, the Lieutenant Governor and Governor. The represented organizations pay all the costs of their representatives. Please, don't let the facts get in the way of a good rumore.
"A little knowledge is a dangerous thing" – I'll be honest, I don't know about this commission or who get's paid what, I really don't care, but I couldn't agree more with your statement – The gas companies do have a little knowledge about fracking, just not enough to do it without screwing up everything else in the process, indeed, a little knowledge is dangerous. Why don't you spend more time figuring out how to do it the right way and less time piling on the people you are already f***ing.
The state of Texas provides "$4 billion in corporate welfare"? What is your source for this? I have never recevied a check from the state of Texas. I know as a producer I pay 7.5% severance tax off revenue (before expenses) for every molecule of gas and 4.6% for every barrel of oil. Name another industry in this state that pays that kind of pre-expense tax!! Additionally, we pay our share of property taxes, which amounts to usually 1.5-2 months of net income. We pay a oil well service tax for well work. As a business, I am not exempt from any of the other business taxes imposed by the state (sales and use, franchise, registrations). Welfare? Sounds like death by taxes to me.
Oh and on the plugging. We pay our own plugging costs in addition to the bonding requirement. The bonding is not a free pass to NOT plug your own wells. Its an additional cost of doing business to pay for my competitors that don't take care of their business. Name another industry that requires them to pay for the poor business practices of their competitors.
See? There you go, dealing in facts again. Don't you care that is is about "feelings" not reality?
There are all kinds of "exemptions" to having to pay the severence tax. It's all on the RRC web site.