AMOCO: IMPOSE TEXAS BOND, HIKE PERMIT FEE

Groundwater pollution by orphan wells in Texas could be controlled with plugging bonds and higher drilling permit fees, the head of Amoco Production Co.'s U.S. operations says. In addition, violators of Texas well plugging requirements should be forbidden to continue working in the industry until problems they cause are corrected, Amoco's E.D. Newman told the Texas Railroad Commission. Newman said requiring Texas operators to post a bond or comparable financial surety before spudding a

March 25, 1991

2 min read

Groundwater pollution by orphan wells in Texas could be controlled with plugging bonds and higher drilling permit fees, the head of Amoco Production Co.'s U.S. operations says.

In addition, violators of Texas well plugging requirements should be forbidden to continue working in the industry until problems they cause are corrected, Amoco's E.D. Newman told the Texas Railroad Commission.

Newman said requiring Texas operators to post a bond or comparable financial surety before spudding a well would prevent them from abandoning unplugged wells.

He recommended that commissioners increase the state drilling permit fee to replenish and maintain TRC's well plugging fund at an adequate level. Permit fees go to the state plugging fund.

Newman's testimony came as the TRC was considering a proposal to reduce to 6 months the time Texas operators have to plug inactive wells.

Commission rules allow operators as long as 1 year to plug inactive wells. That time period was increased in 1987 from 60 days during an era when low oil prices were forcing Texas producers to shut in low volume wells.

TRC can plug abandoned wells that pose pollution or public safety hazards. The plugging fund's current balance is about $640,000.

TRC staff has identified more than 1,100 abandoned Texas wells the state likely will have to plug. During fourth quarter 1990, TRC plugged 186 abandoned wells at a cost of $4,900/well.

Newman estimated it will cost another $33 million to plug 6,000 wells for which neither production reports nor plugging reports have been filed. Texas has about 190,000 active oil and gas wells, 133,000 of which are strippers.