Ground Zero for a Billion-Dollar Surge of Zombie Oil Wells

By Clayton Aldern, Christopher Collins & Naveena Sadasivam

Grist


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 3 million 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 14-inch 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 onto 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 $7 million. 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.

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 $335 million 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. (This article uses the term “abandoned” to encompass wells on the states’ orphan lists as well as inactive wells we found to be in disrepair.) Exactly how many wells will end up on the states’ rolls is an open question. 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’ wells alone have ranged from a conservative $168 million to a mind-boggling $117 billion.

Continue to full article . . .

Picture: Zorin09, CC BY 3.0 https://creativecommons.org/licenses/by/3.0, via Wikimedia Commons

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