Geren Inactive Wells Bill Gives Old Wells Until 2040

The text as introduced · 993 words

By: Geren
H.B. No. 2766

A BILL TO BE ENTITLED

AN ACT

relating to the plugging of certain inactive wells subject to the

jurisdiction of the Railroad Commission of Texas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 89.023, Natural Resources Code, is

amended by amending Subsection (b) and adding Subsections (c)

through (g) to read as follows:

(b) Notwithstanding Subsection (a), an operator may not

obtain an extension of the deadline for plugging an inactive well by

complying with that subsection :

(1) if the plugging of the well is otherwise required

by commission rules or orders ; or

(2) if the inactive well:

(A) has been an inactive well for more than 15

years; and

(B) 25 years have elapsed since the well was

completed, unless:

(i) the commission approves an order

granting an applicant's exception to plugging the inactive well; or

(ii) the inactive well is included in an

approved compliance plan under Subsection (e), in which the

operator of the well commits to plug, or restore to active

operation, the inactive well within a time period ending on

September 1, 2040 .

(c) When considering a request under Subsection

(b)(2)(B)(i) for an exception to plugging an inactive well, the

commission shall consider an operator's demonstrated history of

returning inactive wells to active status.

(d) An exception approved by order of the commission under

Subsection (b)(2)(B)(i) is not transferrable to another operator

and shall terminate upon transfer of the well, except that a new

operator of that well may seek an additional exception under

Subsection (b) for that well.

(e) An operator may request the commission or its delegate

to approve a compliance plan for inactive wells. In approving a

compliance plan pursuant to Subsection (b)(2)(B)(ii), the

commission or its delegate shall consider the following factors:

(1) the number of years the well has been inactive and

its age;

(2) current economic conditions;

(3) the well operator's percentage of inactive wells

as compared to its total well count;

(4) any plan of action by the well operator to plug or

bring its inactive wells into production, injection, or other

service operation, which must include a compliance report to be

submitted to the commission annually with the operator's P-5

renewal;

(5) whether the operator has financial assurance to

cover the actual plugging costs of each well;

(6) the well operator's record of compliance, the

history of any previous violations, and the seriousness of any

previous violations;

(7) any potential hazards to the health and safety of

the public or environmental risks posed by the inactive well; and

(8) the demonstrated good faith of the well operator.

(f) If the commission or its delegate denies an operator's

request for approval of a compliance plan pursuant to Subsection

(e), the operator may request a hearing and order of the commission.

(g) The commission shall adopt rules that provide for

administrative review and approval of requests to transfer an

inactive well to another operator to ensure that wells of the

receiving operator are in compliance with this section.

SECTION 2. Subchapter B-1, Chapter 89, Natural Resources

Code, is amended by adding Section 89.031 to read as follows:

Sec. 89.031. ANNUAL REPORT BY COMMISSION. On or before

September 1, 2026, and each year thereafter, the commission shall

prepare and submit to the governor, lieutenant governor, and each

member of the legislature a report on inactive wells that includes:

(1) the number of inactive wells in Texas;

(2) the age and length of inactivity for the inactive

wells;

(3) the quantity of inactive wells that use each

method for extending the deadline under this chapter for plugging

inactive wells;

(4) the identification of the financial assurance

methods being used by operators for inactive wells under this

chapter, and the quantity of the number of inactive wells for each

category of financial assurance;

(5) the number of inactive wells and total wells that

were plugged in the prior 12 months, including a breakdown by

commission district of wells plugged by industry and by the

commission using state-managed funds;

(6) the number of inactive wells that were returned to

production, injection, or other service operation in the prior 12

months;

(7) P-5 status statistical summary of the number of

operators of inactive wells including the total number of operators

and total number of inactive wells for the status categories of

active P-5, P-5 Extension, Delinquent P-5, and P-5 delinquent

greater than 12 months;

(8) the number of P-5 Organization Reports revoked

under Section 91.114, the associated well count, the total amount

of financial assurance in place for those operators, and the amount

of financial assurance collected; and

(9) the annual cost calculation for plugging an

inactive well, as defined in Section 89.002 (a)(9).

SECTION 3. Subchapter B-1, Chapter 89, Natural Resources

Code, is amended by adding Section 89.032 to read as follows:

Sec. 89.032. COMMISSION RULEMAKING. (a) The commission

shall by rule adopt requirements for inactive wells. In its

rulemaking, the commission shall consider the following factors:

(1) risk to public safety and/or the environment;

(2) wellbore integrity and wellhead integrity

including the ability to monitor casing pressures; and

(3) regional considerations of risk such as

penetration of corrosive or overpressured formations, and

completion in zones containing hydrogen sulfide.

(b) The commission's rules shall include requirements that

within one year of the 15th anniversary of a well becoming inactive,

the operator of that well submit a report to the commission that:

(1) demonstrates completion of a successful fluid

level test or a mechanical integrity test of the well conducted in

accordance with the commission's rules in effect at the time of the

test, with a phase-in period for wells that require testing on the

effective date of the rule; and

(2) includes documentation of the results of a

successful fluid level test and reporting of pressure on the

production casing prior to testing.

SECTION 4. This Act takes effect September 1, 2025.