The Permian basin is an oil and gas producing area 300 miles long and 250 miles wide located in West Texas and southeastern New Mexico. Texas receives enormous economic benefits from this basin, accounting for nearly 40% of US oil production and 15% of its gas production. But such prosperity has come at a huge cost for many as abandoned oil wells have left behind an environmental disaster zone.
Thousands of such abandoned oil wells dot the Permian Basin posing a grave health hazard to humans and wildlife. Add to that the environmental cost of dangerous greenhouse gases, and you have one of the worst eco-disaster zones on earth. And nobody is willing to foot the cleaning bill.
The case of the Briggs family poignantly reveals the plight of many such families living in the zone. They bought what they believed was a dream home, in a spacious 900-acre ranch in an area that falls right in the middle of. The only drawback was the ugly, abandoned oil wells that were strewn over the property. But it wasn’t much trouble as it didn’t bother them much and the rural ambiance more than made up for it.
But then William Sewell and 7S came along into the Permian Basin. This modest pumping company picked up an oil lease on more than 18,000 acres of land in the area. Around 2 dozen oil wells came upon the ranch owned by the Briggs, an area around the size of Central Park in New York City.
Under a quirky Texan law, property rights remain divided into surface and underground laws. So the Briggs did not have a say in granting permission for oil exploration on their land.
Polluting The Permian Basin: A Hoax Venture Reveals The Deep Rooted Rot
But the whole venture was a hoax from the start. The oil wells were closed but soon began leaking, and polluted the surrounding land.
The wells leaked oil and also methane, a more potent greenhouse gas than CO2. This leakage also poisoned nearby water sources.
Oil well operators are under a legal obligation to plug the abandoned wells and prevent similar hazards. The oil wells are built with cement and reinforced steel, but time and improper drilling practices corrode the protection. This allows dangerous gases such as methane to escape into the atmosphere. The underground and surface water bodies also get poisoned.
To prevent this, abandoned wells have to be closed permanently with cement. Unused equipment such as pipes, tanks, and wellheads should also be removed as they pose a hazard to humans and wildlife.
In Briggs’ case, 7S plugged just a single leaking well, and then in 2019, they filed for insolvency after authorities discovered fraud of around $7M. While Sewell has denied the charges, the wells on their Permian Basin ranch loom large and ugly on the Briggs farm, posing a serious health hazard.
Similar Stories Play Out In Other Permian Basin Farms
It is the same story in other ranches and properties. There are around 7,000 oil wells abandoned in the Permian Basin in New Mexico and Texas. These wells were once controlled and operated during various times by more than 1,000 operators.
State companies reveal that it will cost around $335M to plug all the abandoned wells. The wells that do not have a sanctioned operator have been defined as ‘orphans’ by the state. Moreover, only those wells that have been idle for a year are included in the list.
A more worrying statistic is that many of the 10,000 wells that are operational will also end up dead or ‘orphaned.’
Officials pin their hopes on the energy economy recovering enough to revive the inactive wells in the Permian Basin. But energy analysts and environmentalists are both united in their opinion that the industry is in a tailspin and the number of ‘orphan’ wells in the Permian Basin will shoot up.
This phase of uncertainty has led to wild clean-up figures that vary from a modest $168M to a mind-boggling $117B.
There has also been an allegation of discrimination that goes against small, often immigrant-owned wells. Major polluters, on the other hand get away with a slap on the wrist even though they hold the most number of wells and are also abandoned at a much higher rate.
Permian Basin Oil Wells: Regulators Sans Teeth And Politicians Willing To Bend The Rules
The boom in the Permian Basin and the resultant disregard for the environment have largely coincided with Republican control of the state government in both Texas and New Mexico. Regulatory barriers were dismantled to enable the extraction of the most gas at the cheapest rate possible.
Key employees in the environmental department were arbitrarily shuffled into positions where their expertise counted for little. Compliance and inspection positions began to fall vacant.
With their budget cut, the regulatory bodies had no power and were left floundering. Oil and gas inspections are there to ensure operators play by the book. And check that oil wells do not leak underground or over it and ensuring that there are no oil spills over it. The operators have to put up appropriate signage around well sites, though that does not help much when tons of methane escapes into the atmosphere.
Inspections went down drastically as a result of the budget cuts. Under the governorship of Republican Susana Martinez, the regulators almost had to shut shop as a mere 7 inspectors were covering over 50,000 square miles. That is an area larger than Pennsylvania.
The number of inspections kept slipping, something that political funding of the Republicans ensured.
Right across the border, the situation is infinitely worse. With 405,000 more oil and gas wells, the enforcement is conducted by the Railroad Commission. Only 140,000 inspections were carried out on an average with a mere 30,000 violations.
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These violations were for keeping the inactive wells unplugged for years. a mere 73 out of the 178,141 violations were marked as ‘major’ violations. Even then, the fines are low at a mere $10,000 per day. And most violators rarely face fines in the Permian Basin. Inspections are more desk jobs than done on-site.
Data that is available to the public reveal that around 1,500 spills have taken place in New Mexico on an average since 2010. That is nearly double the record from the previous decade. And two-thirds of the spills were spills of wastewater.
The agency is also struggling to keep up with the most potent problem, the rising backlog of abandoned wells. With rising bankruptcy, the responsibility of cleaning up the mess falls on the state.
The list of abandoned wells was 200 back in 2016, and the number has considerably increased since then to nearly 687 wells last year. Another 400 oil wells could be added to the list of Permian basins in the coming years.
Even in a good year, the agency on its own can manage to plug only a few dozen abandoned wells to prevent contamination, leaks, and the pollution of surrounding areas. At the given rate, it could take decades just to clear the backlog. This does not take into account the 400 additional wells that could end up abandoned in the coming years.
The Texas Railroad Commission is also stretched thin for both funds and staff. Of the 300 inspectors, only 31 are tasked with overseeing the Permian Basin and have the responsibility of overseeing over 103,000 oil wells. That comes to around 3,300 wells per inspector.
As one former inspector working in the Permian Basin put it. They were bulldogs but with rubber teeth. All they could do is bark and snap. They could do little to enforce the law. And that is how it all came to pass.
Cleaning Up The Permian Basin Mess
A model was created to identify the wells that would soon be abandoned. This also helped estimate the true cost of cleaning and plugging them. One model noted that around 12,000 wells in Texas were not distinguishable from over 6,000 wells that were included on the rolls of the state.
The wells that could be abandoned shortly are those that haven’t produced oils, or gas for almost 10 years. They are also operated at present by small companies with sloppy compliance records.
Texas has said that it could cost around $303M to plug or clean the additional 6,000 listed wells. A further 12,000 wells will cost another $624M to clean.
Statistics from New Mexico also threw up similarly disturbing statistics, with 421 wells being identified that would end up abandoned, and the total cost rises to over $14M.
Lack Of Funding Guarantee Ensures That The Operators Slip Away Each Time
Both the states haven’t got together sufficient money upfront to cover up for the wells being abandoned. Though the oil and gas companies are pressurized to pay up upfront in the eventual scenario of abandonment, these costs are not sufficient to cover the cost. Bonds collected by regulatory authorities in Texas cover only a sixth of the cleanup costs of Texas in 2015.
On the other side of the border in New Mexico, these funds can cover only 18% of the costs of plugging the abandoned wells.
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Regulatory authorities from both states say that the vast majority of the oil companies themselves plug the abandoned and leaking oil wells in the Permian Basin. The state only comes into the picture when the operators disappear or go bankrupt. The regulatory body also collects funds from the industry through taxes and fees.
The regulatory authority in Texas claims they have plugged over 1,400 oil wells each year for the past two years. but the experience of Briggs speaks otherwise.
Laura Briggs has been following up on her issue with the Commission to help them out. but officials have not evinced much interest or shown any initiative in plugging the abandoned wells. A toxic and sulfuric lake has formed close to her ranch which has a saline content three times the level in the Gulf of Mexico. A sinkhole created in the same county has threatened to submerge a highway.
These issues point to failure at multiple levels. Laura says that these fly-by-night operators are least interested in what happens if things go wrong. All they care about is making a quick exit from the scene.
The lease abandoned by 7S on the Briggs ranch went into the hands of another operator in 2019. This arrangement would allow Sewell to continue to earn on future revenues. Sewell is not willing to take the blame for the leaking wells on the estate. He says past operators are to blame for the leak.
He claims that he has not touched many of the wells and had not profited from them at any time. A loophole in the state law of Texas allows him to go in for numerous extensions from plugging dead wells. This allowed him to defray the problem and stay afloat. This was neither confirmed nor denied by the Railroad Commission, the regulatory authority in Texas.
The Predicament Of Another Ranch Owner In Permian Basin
Bay Laxson has over 2 dozen wells on his 1,100-acre ranch in South Texas. These were acquired and run by Jenex Petroleum. This oil company based in Denver neglected the wells for years. This allowed them to fall into a state of total disrepair.
By the summer of 2016, 11 of the wells had fallen into disuse according to the state commission inspectors and were not complying with environmental and plugging rules of the state of Texas. Laxson lost one of his Angus Bulls after getting entangled in drilling equipment.
He once had a thriving organic farm but had to scale back due to rising costs. But he still grows vegetables and fruits over 4 acres and prides over his farm for its use of natural fertilizers.
So, when Jenex polluted his land after a chemical spill, he along with another landowner, filed a formal complaint with the authorities.
Most of the wells on the property were found to be in a dangerous state of disrepair. But after a long legal entanglement that saw the wells change hands several times, the wells on his land remain in the same condition.
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The first academic study for finding methane emissions in the Permian Basin led to the discovery that close to 50% of the wells leaked the poisonous gas. Three of the biggest emitters were responsible for 90% of the emissions.
The federal government has put out figures that reveal that plugging the abandoned wells on federal land will cost in the Permian Basin of $20,000 to $145,000 for each well. Even as 2.1M wells are abandoned and unplugged, the total cost could come to around $300B. will no clear measures in place to move against the operators, the Permian Basin will continue to be a major environmental disaster zone in the coming decades.