Texas oil companies face new deadlines to plug inactive wells

Senate Bill 1150, which is on its way to Gov. Greg Abbott, is a rare example of the Texas Legislature regulating the state’s oil and gas industry.

By Carlos Nogueras Ramos  May 27, 2025

Texas oil and gas companies face new deadlines to plug defunct wells after the Texas Legislature agreed this week to send Gov. Greg Abbott a bill setting new rules for the industry.

The bill, which passed with bipartisan support in both chambers, is the first legislative step in years toward addressing the growing environmental problem for which the state’s taxpayers have become increasingly responsible.

Written by state Sen. Mayes Middleton, R-Galveston, Senate Bill 1150 requires oil and gas operators to plug wells that have been inactive for at least 15 years.

The Texas Railroad Commission, the agency regulating the oil and gas industry, must start enforcing the new rules in September 2027.

In a statement to The Texas Tribune, the Texas Oil and Gas Association applauded the bill.

The bill “recognizes that once a well has reached the end of its economic life and there is no useful purpose, the owner should be responsible for the plugging, and makes this the law in Texas,” said Todd Staples, the association’s president.

More than 150,000 inactive wells puncture Texas land, regulators estimate. Nearly 8,900 of them have no established owner because the company is either bankrupt or no longer exists.

The commission calls these orphan wells, some of which have become conduits for water traveling underneath them. At least eight have burst with brine since October 2024, costing the state millions of dollars to fix.

Current Texas law allows oil companies to indefinitely extend the amount of time they have to plug wells. Middleton’s bill changes that, but there are exceptions.

An operator can still ask for an extension in a number of scenarios. For instance, regulators can consider requests from operators with a proven history of plugging other inactive wells.. Another provision allows extensions for operators who can’t afford to plug the well. If approved, the well would have to be plugged by 2042.

Under the bill, regulators must evaluate a number of factors, including the operator’s plugging history, the number of inactive wells on the property and whether the operator has a plan to reactivate the well.

It will be up to the commission to work out the details of how to enforce the bill. Regulators must consider risks to public safety and the environment, as well as the state and location of the well.

Virginia Palacios, executive director of Commission Shift Action, a group that advocates for stronger environmental regulations, said she was impressed to see the oil and gas industry support Middleton’s bill, but disappointed the rules aren’t more stringent.

Lawmakers should have given operators 10 years, instead of 15, to plug the wells, she said, adding that the bill contains too many extensions. She said she hopes the commission’s rules will be stricter.

“I'm optimistic that this law is going to help reduce some of the problems we've had from unplugged wells,” Palacios said. “But, in the bigger picture, we could have so much more efficient laws if we had lawmakers actually taking feedback from the people that are most affected, who are seeing these problems play out on the ground, and are seeing what the solutions should be.”