When Laura Briggs and her husband finally found their dream home in west Texas, they knew they’d be sharing space with the oil industry. The Pecos county ranch’s previous owner, local attorney Windel “Hoot” Gibson, died there when a rickety old pumpjack teetered over and fell on top of him.
But sharing 900 acres with a handful of old oil wells seemed like a fair trade for a spacious ranch where the Briggs family could raise four kids and a mess of farm animals. The property is smack dab in the middle of the Permian Basin, an ancient, dried-up sea that streaks across Texas and New Mexico and is the most productive oil field in the United States. Approximately 3m barrels of the Permian’s monthly crude production happens in Pecos county; there is an oil or gas well for roughly every two people here.
After closing on the property a decade ago, it didn’t take the Briggs family long to make the place their own. They built a roomy, two-story metal house and constructed livestock pens for hogs, goats, donkeys and cattle. For a few years, the Briggs ranch delivered the rural splendor they’d hoped for. “When you come out here, it is dry. There is no Starbucks. But there is a peace to that,” Laura said. “This takes some stress off your shoulders and you’re like, all you really need in life is a pair of blue jeans and a good book.”
Then William “Gilligan” Sewell came along. Ever since, the family’s lives have been marred by the mess he left behind.
Sewell, a 48-year-old businessman based in Midland, Texas, founded 7S Oil and Gas LLC in 2014. In less than two years, the small-time pumping company acquired oil leases on over 18,000 acres in the region. Among them were two dozen wells on the Briggs ranch, which is just a hair bigger than New York City’s Central Park. 7S didn’t have to involve the family at all to acquire the wells on their property. In Texas, property rights are split into two categories: the land on the surface and everything underground, including oil and natural gas. When Laura bought the ranch, they only purchased rights to the surface; 7S subsequently leased the so-called mineral rights underneath.
Laura and her husband noticed that the pumpjacks on the 7S wells rarely moved much, an indication they weren’t actually producing much oil for sale. However, the family did see the wells leaking oil and gushing produced water – an industry byproduct that’s often imbued with hazardous chemicals.
One well leaked enough produced water to cover a 100-square-foot stretch of pasture. At its deepest point, the spill could have submerged a two-story building. Another well is just a 14in hole in the ground covered with plywood in an attempt to prevent Laura’s kids and livestock from falling in. In October, she invited a university researcher on to the property and discovered that several wells were leaking methane, a greenhouse gas more potent than carbon dioxide. A nascent but growing body of research suggests that these sorts of leaks make oil and gas wells significant contributors to climate change – especially if they’re not plugged. Leaking wells also have the potential to poison sources of drinking water.
Oil companies are legally required to “plug” their abandoned wells to prevent exactly these sorts of hazards. Drilling a well involves puncturing through layers of dirt, rock, and water to reach oil and gas deposits. The walls of the well are reinforced with steel casing and cement, but as they age – or if they were improperly drilled – cracks may form in the cement and the casings could corrode. This increases the risk of methane seeping into the air and oil migrating into the surrounding groundwater. For this reason, an operator is supposed to plug a spent well by pouring concrete into the well and also clean up the surrounding area by removing wellheads, tanks, pipes and other unused equipment that could endanger humans or wildlife.
7S plugged one leaking well on the Briggs ranch, but took no other significant action, Laura said. In fact, the company filed for bankruptcy in 2019 after federal authorities claimed in a civil suit that Gilligan Sewell and 7S defrauded investors of nearly $7m. In a phone interview, Sewell denied defrauding investors but refused to answer specific questions about the case, claiming he signed a confidentiality agreement. The wells are still scattered across the ranch, and though they’ve changed hands, they remain largely unplugged.
‘A failure on so many levels’
The situation isn’t much better elsewhere in the Permian Basin. Texas and New Mexico have already identified about 7,000 abandoned wells that were once operated by over 1,000 companies. State officials estimate these will cost $335m to plug. The states define wells as “orphaned” if they don’t have an approved operator on record; additionally, Texas only includes wells that haven’t produced in at least a year. However, a healthy chunk of roughly 100,000 “idled” wells in those states could also eventually end up abandoned.
While officials have argued that oil prices will eventually rise, reviving inactive wells, environmental advocates and energy analysts say that the industry is in a downward spiral that will cause the number of abandoned wells to balloon. The uncertain outlook means that independent estimates of the cleanup costs of Texas’s wells alone have ranged from a conservative $168m to a mind-boggling $117bn.
In order to estimate the true cost of cleanup, Grist and the Texas Observer created a statistical model to identify wells soon to be abandoned, based on past trends. Our model found that approximately 12,000 Texas wells are nearly statistically indistinguishable from the more than 6,000 already on the state’s rolls. Wells our model identified have similar characteristics to wells that have already been abandoned: they’re older, haven’t been used to produce oil and gas in almost a decade, and are currently operated by younger companies with shoddy compliance histories. Given past trends, we expect these wells will be abandoned in the next four years. Texas already estimates it will cost $303m to clean up the 6,000 wells on its abandoned wells list. State records indicate the 12,000 additional wells our model identified will cost at least $624m to clean up. In New Mexico, our model found that 421 wells are likely to be abandoned in addition to the roughly 700 wells on the state’s list. According to state records, the plugging cost for the additional wells is more than $14m.
States have not collected nearly enough money from operators to foot the bill. Though they force oil and gas producers to front substantial cash to cover plugging costs in case their wells are abandoned, these bonds only covered one-sixth of Texas’s cleanup costs in 2015. In New Mexico, these bonds would cover just 18% of plugging costs for all of the state’s orphan wells.
Spokespeople for the states’ oil and gas industry regulators – the Texas Railroad Commission and the New Mexico Oil Conservation Division – said that fossil fuel companies plug the majority of wells themselves and that state agencies only get involved in rare cases when operators disappear. The industry also funds reclamation programs managed by the states through fees and taxes, they said.
Andrew Keese, a spokesperson for the Railroad Commission, said that the agency has plugged more than 1,400 wells per year over the last two years. “The Railroad Commission prioritizes protection of public safety and the environment and has a robust program of inspecting the state’s oil and gas infrastructure,” he said.
But Briggs’s experience seems to indicate otherwise. For years, Laura has dogged the Railroad Commission to help her solve the problem on her property. But officials haven’t shown much interest in helping her or anyone else trying to plug non-operational wells. Just a few miles east of her ranch, leaks from abandoned wells have formed a toxic, sulfuric lake that is three times saltier than the Gulf of Mexico. Elsewhere in the county, one well has created a sinkhole that threatens to swallow an entire highway.
“This is a failure on so many levels,” Laura said. “When you have people who are just in it for a quick buck, they don’t really care what they leave behind.”
In 2019, the 7S leases on the Briggs ranch were transferred to another operator through an arrangement that Sewell said allows him to collect on future earnings. Sewell deflected blame for problems on Laura’s property to an operator who worked there in the past. He called the oil wells a “headache” and admitted that he neither plugged the wells nor produced oil from most of them. But by using a provision in state law that allows operators to apply for multiple extensions to plugging inactive wells, he claimed he was able to offload the problem wells and stay in the oil business. The Railroad Commission would not confirm this.
“We got rid of all the wells,” he said. “We just cashed in.”
Bay Laxson had reached his wits’ end. The two dozen or so wells on his 1,100-acre south Texas ranch had been acquired by Jenex Petroleum and neglected by the Denver-based oil company for years, falling into further disrepair, according to Railroad Commission records. By the summer of 2016, commission inspectors had found that 11 of the wells were not compliant with state plugging and environmental rules. Some of them had rusted wellheads and were overgrown with wild vegetation, Laxson wrote in a letter to the commission. Leaks often sprang from pipes and pumps, spewing briny oil and water. One of Laxson’s Angus bulls had died recently after becoming entangled in some abandoned pipe and junk equipment. Its bones are still scattered on the property.
Laxson, 71, cares deeply about taking care of his land. After a stint in the military, he returned to south Texas in the 1970s when he inherited a citrus orchard from his aunt, deciding to try his hand at organic farming. Experimenting with compost, turkey droppings and even bat guano, Laxson’s farm soon overflowed with bower tangerines, giant watermelons and cantaloupes. He made a name for himself, supplying watermelons to Whole Foods when it held the grand opening of its inaugural store in Austin in 1980.
Laxson ran his orchard until about two decades ago when his children moved away and rising labor costs made the farm unsustainable, but he still continues to grow fruits and vegetables on about four acres around his house. “We don’t spray anything on this place that can kill anything,” he said proudly.
So on a hot July day in 2015, when a 100-gallon chemical tank belonging to Jenex spilled on to his property, endangering the aquifer he relies on for irrigation and to water his animals, Laxson lost it. “That was kind of the last straw,” he said.
The Laxsons filed a formal complaint with the Railroad Commission and were joined by Michael Bordovsky, a landowner 100 miles northeast who was also growing increasingly frustrated with Jenex. The majority of Jenex’s wells – about 240 of them – were on his property, and they were “unsafe” and “environmentally dangerous”, he later testified before the commission. Gauges affixed to some of the wellheads showed pressures 150 times normal levels, like ticking time bombs “ready to either vent [methane] to the atmosphere or, worse yet, break the casing and get [oil and gas] into one of the many valuable aquifers”, said Bordovsky. Laxson and Bordovsky both argued that Jenex had voided its leases by abandoning the wells on their properties, and the commission should therefore compel the company to plug the wells and clean up the fallout.
Initially, the Railroad Commission seemed to agree, ordering Jenex to plug the wells on Laxson’s property in November 2016. Agency inspectors found that 315 wells on Bordovsky’s property had not been producing for more than a year, and Jenex hadn’t revived or plugged them. There was an open pit of polluted water near one well, which was leaking oil from its valves. Ten wells were just holes in the ground. As a result of the numerous, longstanding violations, the agency calculated a penalty of $919,430 – an extraordinary sum considering the agency’s average fine is around $2,500. To drive the point home, the agency refused to renew Jenex’s license to operate in the state, one of the last resort tactics reserved for the worst offenders.
Jenex was breaking many of the rules that were codified by the 2009 Texas law that sought to cut down on the number of abandoned wells: it had not filed forms for over 330 of its inactive wells, including many on Bordovsky’s property, to request exemptions from well-plugging requirements, according to Railroad Commission records. Some wells were missing other required forms documenting that the company had removed tanks, pipes and other surface equipment from wells that had been inactive more than 10 years, and several failed mandated pressure tests.
Bordovsky wrote in a letter to the Railroad Commission that Jenex was reporting several wells on his property were producing oil when they weren’t outfitted with pumps. In fact, they could barely be located because of the overgrown weeds surrounding them. Bordovsky claimed that by reporting the wells as producing, Jenex could avoid having to post additional bonds for cleanup, another requirement under the 2009 law. State inspectors never bothered to perform site checks to verify whether the wells were producing; they simply took the company at its word. Bordovsky took photos of the non-functioning wells and sent them to the commission, which did not investigate.
Facing an almost $1m fine and the loss of its license, Jenex performed an end run around the agency by finding a buyer: Maverick Energy. It was a familiar name for Bordovsky, who was then forced to drop his complaint against Jenex. Maverick had operated the wells on his property until 2012. But when one of several companies run by Maverick’s directors filed for bankruptcy, Maverick’s leases ended up with a court receiver. Jenex then acquired the leases. Bordovsky was livid and filed a subsequent complaint with the commission arguing that the agency shouldn’t allow Maverick to operate the wells.
During a 2017 administrative hearing, Jenex told the commission it could either allow the transfer to proceed so that Maverick would become responsible for the wells, or block the transfer and deal with a $5.5m cleanup on Texas’s dime. “If [the permit] is not renewed,” a lawyer for Jenex said, “all of this will become the state’s problem.”
Despite Bordovsky’s protest, the commission approved the transfer of the lease, with strict conditions. Maverick was required to bring its wells back into compliance within three months. Three years on, that hasn’t happened. Last year, Maverick racked up 121 state violations for infractions such as disposing of oil and gas without a permit or not plugging inactive wells. The wells on Bordovsky’s property, which were producing more than 550 barrels of oil per month in 2014, were producing no oil as of the end of last year. Maverick was briefly barred from operating in Texas, but the commission renewed its license last year. Meanwhile, the agency dropped enforcement charges against Jenex. Once the wells were transferred to Maverick, Jenex was no longer an operator in the state of Texas, and the fines were erased.
Keese, the Railroad Commission spokesperson, said that the agency performed multiple checks before approving the sale, including verifying that Maverick posted the blanket bond of $250,000 required under state law. When violations weren’t addressed promptly, the commission severed Maverick’s leases, prohibiting the company from operating in the state until it addressed all outstanding violations and paid any fees that were due. Keese said the agency was monitoring the company for continuing violations and may take further action if it fails to comply with state regulations. Requests for comment from Maverick directors were either declined or not returned.
After taking over the leases in 2017, Laxson said Maverick was diligent about fulfilling its promises to him. He’d been particularly worried about several non-producing wells leaking into the aquifer he taps for irrigation water. Over two years, the company plugged two high-risk wells; a cleanup worker told Laxson it cost at least $100,000 to plug just one of those. Then, things took a turn for the worse.
As the novel coronavirus spread to the United States, oil prices plummeted from about $63 to less than $20 per barrel last spring. Operators shut down half of all producing wells in Zavala county. Given the remote location of Maverick’s wells – Laxson’s ranch is closer to Mexico than it is to Austin – haulers charge $5 per barrel just to drive the oil to processing facilities, Laxson said. He added that his royalty checks have shown the company selling oil for as low as $12.30 per barrel. His share came out to about $1.20 per barrel.
Now, Laxson is worried about what might come next. Maverick is among the top 20 Texas operators with the most wells likely to be abandoned, with 57 of its approximately 300 wells forecasted to meet that fate, in part due to the company’s long history of rule-breaking. Our model also identified two other operators – run by the same people and registered at the same address as Maverick – likely to abandon more than 40 wells each.
Laxson thinks the chances of another well being cleaned up on his property are slim and is treading gingerly with Maverick. He even performs small repairs on the wells himself, tightening valves on pipes.
“[Maverick is] at the point now where they’re pretty close to throwing their hands up,” he said. “And what happens then? The old lease is just left in limbo, nothing gets done, and it falls to the state of Texas. And the state of Texas is not going to do anything.”
A longer version of this story was originally published by Grist and The Texas Observer and is republished here as part of Covering Climate Now, a global journalism collaboration strengthening coverage of the climate story. This story was supported by the Pulitzer Center.