Railroad Commission Requests Millions in Additional Funding at the Senate Committee on Finance HearingBlog

On Feb. 11, Christi Craddick, chairman of the Railroad Commission, presented at a meeting of the Senate Committee on Finance. Craddick spoke on exceptional items, requesting additional funding beyond the $50 million base budget for the commission. Extra support from the senate would be used to fund data reporting on produced water, investigations into underground well injection, registration for oil and gas pit systems, and a digitized filing system for oversight and safety regulation.

Arguably the most important item on the agenda is the commission’s request for an additional $100 million solely devoted to funding orphaned well plugging efforts. Orphaned wells are non-compliant, unplugged oil and gas wells with no known operator on file with the Railroad Commission that have been inactive for at least 12 months. Craddick’s self-prescribed “big-ticket item” request for additional funds would be used to combat the costs of well plugging, which are on the rise due to the high cost of labor for plugging wells of varying depth, age, and location.

The Railroad Commission is expected to plug 1,000 wells per year on a budget of $22.75 million. In 2024, the average cost to plug a well was $15/ foot, making a 10,000-foot well a $150,00 expense. Chairman Craddick said this base budget is “no longer sustainable without further legislative action.” Emergency and high-priority wells absorb a significant portion of the budget, leaving little room to address the long list of backlogged wells waiting to be plugged.

The commission is seeking to adjust their performance measures to reflect their current limitations. Craddick informed the senate committee that there are more orphaned wells every year than they have the capacity to plug. As of September 2024, there are 8,300 orphaned wells in Texas, and it would take $330 million to plug all of them.

The Senate is now concerned with getting to the root of the problem: at what point does plugging a well become the responsibility of the government? Senator Charles Perry expressed his concern for finding the parties who initially abandoned the wells. Craddick assures that the commission has a process of tracing the well ownership, but that the majority of former operators are “bankrupt, died, [or] disappeared.”

Commission Shift Action supports the commission’s request for extra funding to plug these wells. We are also advocating for policy reform to address systemic issues related to orphaned wells and limiting extensions on inactive well plugging. On Jan. 29. Virginia Palacios, executive director of Commission Shift, testified at the open meeting of the Railroad Commission of Texas. She emphasized the importance of changing “state laws to ensure that active operators pay to plug their own wells in a timely manner before the wells end up orphaned.” Additionally, she spoke about the limiting the number of inactive well plugging extensions for a singular well as a “simple and reasonable way to ensure wells are plugged before they are orphaned and before they cause pollution to groundwater.”

The Railroad Commission cannot advocate for policy change, but they are looking to the legislature for important direction and support. We urge supporters to call your legislators and representatives to show your support for the Railroad Commission’s request for additional funding. Find out who represents you here.