RRC concerned Texas may not be able to maximize federal funds to plug orphaned wells

AUSTIN – The Railroad Commission of Texas has filed comments on draft guidance issued by the U.S. Department of the Interior (DOI) for utilizing formula grants to plug orphaned oil and gas wells.

Several aspects of the draft guidance have caused concern for the RRC because it could hinder the state’s efforts to use as much funding as possible for important work that protects residents and the environment.

Among the concerns is the fact that the DOI may end up changing formula funding calculations for states, which could mean Texas could get less than the approximately $318 million that was originally due to the state.

The guidance also has program requirements for states that go beyond the scope of the federal legislation that authorized the well plugging funds. These requirements are burdensome and sometimes unrealistic to implement, which will inevitably hamper the momentum of the state’s plugging efforts, resulting in less wells being plugged than could be.

The comments submitted by the RRC are guided by the agency’s expertise in plugging orphaned oil and gas wells. That expertise was key to Texas’ first in the nation status utilizing federal funds to plug orphaned wells, when work began in October 2022 with the state’s $25 million initial grant. 

Adding unnecessary requirements to the next phase of federal funding, the formula grants, can hinder the state’s ability to plug as many orphaned oil and gas wells as possible.

“As Chairman of the Railroad Commission, I believe it is crucial for this agency to thoroughly assess all strings attached to federal money. When dealing with the federal government, we always read the fine print,” said RRC Chairman Christi Craddick. “The Commission is responsible for ensuring health and safety standards for all Texans while overseeing responsible stewardship of our state’s abundant natural resources. The Department of Interior’s draft guidelines are extremely concerning, and our comments reflect our commitment to prioritizing Texas.

“Money intended for well plugging efforts should be used for just that – not bureaucratic red tape. Advancing the Biden administration’s political agenda at the expense of Texans is unacceptable, and this agency will continue to push back on all unreasonable regulations put forth by the federal government.”

“President Biden’s Interior Department needs to stop playing politics with taxpayer dollars and allow Texas and other oil and gas states to get to work plugging more wells and producing much-needed reliable energy,” said RRC Commissioner Wayne Christian. “Texas is not only the national leader in producing oil and natural gas, but is also a leader in plugging abandoned wells, protecting groundwater, and reducing flaring. Taxpayer dollars should ALWAYS be used with the utmost care—Biden’s Interior Department needs to walk back their overreaching guidance which only adds onerous regulations making abandoned well plugging more costly and less timely.”

“Taxpayer dollars – regardless of their origin – should always be used efficiently and effectively to achieve the desired result,” said RRC Commissioner Jim Wright. “Based on the draft guidance issued by the DOI, it would seem that plugging as many orphan wells as possible is low on the Department’s priority list. The words “innovation” and “federal government” rarely appear in the same sentence. Instead of handcuffing states with top-down, bureaucratic red tape and unrealistic requirements that increase plugging costs, the DOI should seek to empower states like Texas by providing them with the flexibility to achieve our shared mission of reducing the orphan well population.”