Episode 7: Plugging Wells to Save the Planet
Episode 7: Plugging Wells to Save the Planet
The United States could have more than 3.2 million orphaned and abandoned wells that cause huge impacts to the environment. For ranchers and landowners like Schuyler Wight, this poses a significant threat to livelihoods. According to Megan Biven, it’s an opportunity to turn this emergency into a much-needed, water-saving climate jobs program, which turns oil and gas workers into national environmental heroes.
Schuyler Wight: The water’s coming out all over the place over there. It’s coming out over there, over there, over there. Flowing from underground. Flowing out.
(noise from Schuyler’s ranch)
Miguel Escoto: Schuyler, could you introduce yourself briefly and tell us about where we currently are?
Schuyler Wight: I’m Schuyler Wight. We’re currently at the eight, number eight well. The Railroad Commission is taking over the plug in operation on this well. It’s leaking all over the place.
Miguel Escoto: So can you help describe the scene here for our listeners? What exactly is being leaked? What does the scene look like?
Schuyler Wight: Yeah, it’s produced water, and produced water is a water that’s associated with oilfield production. It’s got salt and chlorides and H2S and methane and it’s got radioactive isotopes in it, it’s got benzene in it, it’s got all kinds of nasty crap in it. And this well has been flowing for quite some time. It’s got a dead zone that’s – I would guess about a 200 foot radius around this that’s just dead from all the water flow.
Miguel Escoto: Yeah. So this dead zone, um, I mean, this is a beautiful land, very green. But you have, like you said, this radius of just everything, all plant life is just dead. Um, how would you explain an abandoned or orphaned well, to someone who is unfamiliar with the concept?
Schuyler Wight: So an orphaned well is a well that, at one time, this well was predictive of oil and gas and there was an operator on it, like drilled it and completed it and produced it for a number of years. And then over time, these wells, the production declines until they get to where they’re unsustainable economically. And then at that point, the operators get less and less solvent. Uh, the good operator sells it to a lower tier operator who sells it to the lower tier operator, and it keeps going down the food chain until you get one that goes bankrupt. Uh… this particular company, they’re, they’re broke. And they turned over 450 wells to the state. And this, this well here is one of 100 on this ranch that they turned over to the state. They belong to the — it’s now the public’s obligation to plug them. And that’s why they call it an orphan well is because there’s no operator that’s there for financial responsibility to clean up the mess.
Miguel Escoto: In your opinion, who should have the brunt of this responsibility? Because there are thousands of these guys all over the Permian. They’re expensive to plug in. You have experience about that. Tell us firstly how expensive is it to actually plug in one of these wells and in your mind, who should bear the brunt of this responsibility?
Schuyler Wight: Well, just to give you a common idea of the cost, I’m just guessing, and I’m just a dumb cowboy, but this well here will be a six-figure well to plug. It’s easily over 100,000 and it might get upwards 3 or 400,000 to get it plugged and, you know, right now the state and the taxpayers are liable for this, but, you know, it should be the operators. The operators ought to take care of these things and never let them get to this condition.
Miguel Escoto: And it’s all sort of just part of the economic business plan, like you mentioned, that it keeps getting sold down the food chain to lower and lower and lower operators until it gets bankrupt. So returning to painting a picture of the scene here, does it smell nice?
Schuyler Wight: No, the smell is mostly from the H2S residue smell. This water has H2S in it. Which smells like… that’s a classic rotten egg smell. And so that’s what we smell. We’ve got two trucks here sucking water out of a cellar. They built an alternate wellhead to go on this well, and they’re going to have to get this cleaned up before they can even get a rig in here to work on it, because they can’t… They can’t even get a rig in here because it’s so muddy and they’re such a mess. They got to get that cleaned up before they can even start.
Miguel Escoto: And it’s muddy. We’re currently standing on some boards because it’s so muddy. We wouldn’t be able to stand here. And that’s because of all the produced water that’s been flowing to the surface, right?
Schuyler Wight: That’s correct. These boards are what they call rig mats and they put these down to give a foundation for the rig to sit on.
Miguel Escoto: Last time I visited, we looked at another orphaned well. Tell us about that well, is it also being… is the Railroad Commission also claiming responsibility for that one? Are they also plugging in that well, the way they’re plugging in the one in front of us?
Schuyler Wight: So I went to the April open meeting in Austin and brought that to the attention of the Railroad Commission, that well was first reported back in 2015, the Railroad Commission sloughed off responsibility at that time and we actually found all the paper records where the Railroad Commission is is responsible for that as well. And I have not heard anything from the Railroad Commission. They’ve been silent on that. There’s been no word from them. There’s no movement on it, nothing that I can tell. So I’m totally in the dark on what they’re doing about it.
Miguel Escoto: You also mentioned that… Well, let’s talk now about how this is affecting you personally. This is in your land. How is this affecting your livelihood and your business? Tell us about that.
Schuyler Wight: So I’m a rancher, so I have cattle and I turn cattle out on this ranch. And of course, I have to grow grass and cattle have to eat good, nutritious grass, to, in order to live, in order to survive. And so, you know, this dead zone around here, this is not going to grow anything for generations. So there’s no way that there will be any grass or anything growing on this. But the other danger is that sometimes cows will drink this water, they’ll come by and and cows have this kind of… this kind of inner, uh, um, nutritional, um, I don’t really know what to call it, but it’s like craving. Intuition. They kind of crave certain things. And anyway, they’ll, they’ll come by and there’s a little bit of salt in here, and they’re hungry for salt. They’ll drink some of this water. And so I’ve had cattle die from drinking this stuff. And there’s actually on that Boehmer Lake, there’s dead cows around that Boehmer Lake, from breaking out of the darn thing. So, yeah, it affects me.
Miguel Escoto: What is Boehmer Lake and why is it so dangerous? What is in this produced water that causes these cows to die?
Schuyler Wight: So the groundwater district, the local groundwater district tested the water in Boehmer Lake, and they found high levels of salt and chlorides, sulfur, heavy metals. It’s got benzene, teratogen, xylene. And this is all over EPA thresholds, by the way. And it’s also got several different radioactive isotopes in it. It’s got deadly level of H2S gas —14,000 parts per million H2S and a hundred parts per million is over the limit that’ll kill you. So it’s deadly levels of gas and cancer-causing things in that water. So it’s bad stuff.
Miguel Escoto: Is this the lake that was artificially created as a result of the orphaned well that blew the surface?
Schuyler Wight: Yeah, there’s an orphan well over on that Beamer Lake that is flowing. It’s been flowing for about seven years and it created that Beamer Lake. That well it’s what they call a P-13 well and a P-13 well is a well that was originally drilled as an oil and gas well later, converted to water well on paper. The operators left their responsibility to the landowner. The landowner did not have the wherewithal to take care of that well, so they just let it flow. And it’s been flowing and flowing and flowing. And the landowners have long gone. They gave up and left a long time ago. So it’s just out there flowing and it’s creating a pollution nightmare and it’s poisoning groundwater. It’s all that nasty stuff is coming to the surface and it’s leaching down into the groundwater.
Miguel Escoto: So is this something that should worry the Permian Basin region just as a larger, broader community? Should this worry our access to clean, drinkable groundwater?
Schuyler Wight: I think it ought to scare the hell out of us because there’s very… there’s not enough water to go around as it is. Our supplies of fresh water here in the Permian Basin are stretched to the limit even now. Just think ten, twenty, fifty years from now how much more stretched these groundwater supplies are going to be. And we can’t afford to keep polluting this fresh water and expect to have good clean water for the people to drink.
Miguel Escoto: Welcome to the final two episodes of our podcast series, Murdering Our Stars, a podcast about the Texas Permian climate bomb. These next two episodes are dedicated to oil and gas workers and the communities who will continue to live in the Permian well after the oil and gas industry has ended. At the beginning of the episode, you heard the testimony of Schuyler Wight, one of the many Permian ranch owners affected by the industry. He will make an appearance later on in this episode as well.
Fossil fuel executives strategically lump oil and gas workers as part of, quote, the industry. Oil and gas bosses strategically create this monolithic image of the industry that somehow, the roughneck who works 12 hour shifts exposed to harmful radioactive chemicals is on the same team as a Houston based boss with a mansion and a private jet. The reality of the field is that exploitative class dynamics are rampant in the Permian. This area is saturated with ads of personal injury lawyers representing workers who are fatally injured or have even been killed on the job. According to the U.S. Bureau of Labor Statistics, 1,566 oilfield workers died on the job from the years 2008 through 2017. Nearly the same number of soldiers died in Afghanistan during that period. The oil field is a battleground. On the one hand, there’s the working class in the region, mostly Latino men and immigrants, like my family members who searched for the best paying jobs to provide for their families. On the other hand, we have the capitalists, big bosses who parachute into the region from Houston or Wall Street to extract as much wealth as possible without regard to the well-being of their workers or of the local communities.
However, alternatives exist in the horizon of the Permian sunsets is a world in which people are valued more than short term profits of a tiny number of billionaire investors. Our two guests for the remaining couple of episodes will help us envision what this Permian beyond the oil and gas dictatorship can look like. Megan Biven will talk to us about the environmental and financial emergency of orphaned and abandoned oil and gas wells in Texas and how robust social investment can turn this emergency into a much needed water saving climate jobs program, which turns oil and gas workers into national environmental heroes. John Beard, a former oil and gas worker himself, will discuss with us the vital importance of linking the environmental justice movement with the labor rights movement. First off, we’ll talk to Megan. She is a Louisiana native and a former U.S. Bureau of Ocean Energy Management employee who founded and runs Tru Transition, an organization committed to making sure oil and gas workers have a seat at the table during the energy transition. Here’s my conversation with Megan.
Miguel Escoto: Megan, thank you so much for being on this podcast. This episode specifically, the topic is people over profit in the Permian Basin. So thank you for helping us to try to understand the situation with abandoned wells. We know it’s an important thing, but can you paint us a picture about what exactly is an abandoned well? Why does it matter?
Megan Milliken Biven: Thank you for having me, first. So how did we get here? So Texas. Texas is, you know, the home to spindle tops. It is one of the most prolific and oldest oil and gas provinces on the planet. It’s, you know, its legacy and history is global. And that means that the discarded holes and wreckage of that proliferation is also still there. And what we’re dealing with is a total well population that I could tally of about 1.6… Sorry. I could probably say 1.7 million total wells across Texas. And these include legacy wells that were drilled before 1950, about 800,000 wells that were plugged in the recent era. A few hundred thousand. And then there’s orphan wells. And, you know, that is a term that has been bandied about. And the definitions vary by jurisdiction and by state and by region. And for our purposes, we’re going to use what I think should be the only definition of an orphan well, which is a well that is not plugged and where a previous or current owner cannot be located. Absolutely no one on the hook. Every other well that is unplugged… So let’s go back a little bit more. So an unplugged well, what is an unplugged well? So we know you drill a hole into the earth. You inject you create like a steel casing to access those hydrocarbons. You pull them out. And then what do you do when you’re done? You sip the milkshake. You’ve drunk it all up. What do you do? Well, typically, they inject cement into that straw and ensure that the water resources and everything else is segregated from any remaining oil that could be in there or gasses. And so that it doesn’t pollute a water aquifer or leach out and cause an explosion. There’s just methane gas leaking out.
So an unplugged while means that you have not done that. A leaking well could mean a variety of things. It could mean that you plug that well. But the cement is failing. The steel is corroding. It could mean some kind of component within the whole engineered product has a leak and that the gas is migrating somewhere else. Could mean a variety of things. But for our purposes, it is a hazard. It is both a climate hazard because there’s methane. It is a hazard to our water resources. It is a health hazard because of the various chemicals and potentially naturally occurring radioactive materials associated with these formations. All of the things salt, you know, just salty brine is a threat to agriculture, to water resources, to husbandry, to dealing with, like, cattle ranches. So, yeah.
Miguel Escoto: And there’s so many of them, which is something that always blows my mind. And the figure you just listed, almost, almost 2 million, right?
Megan Milliken Biven: Yes. Across the state of Texas. And I don’t know if that figure actually includes offshore and state waters. I’m not entirely sure.
Miguel Escoto: And so you were listing out some of the environmental issues and the health concerns that go along with abandoned wells. I’m going to ask you about that a little bit more in detail later. But I also wanted to focus on how this relates to the workforce locally, how it relates to labor. So, you know, in the region, one of the fossil fuel industry’s most obvious forms of injustice is environmental degradation. But the Permian also faces labor injustices, which is something that you focus on. Many, many see that the industry, they see it as an indestructible, steady force of employment. According to your research, however, is the reality different from this myth?
Megan Milliken Biven: Yes.
Yeah, how is the industry actually vulnerable? How is it actually a vulnerable source of employment for the local workforce?
Megan Milliken Biven: That’s an excellent question and one that we have to interrogate and challenge. So in the state of Texas, for instance, we all know that the shale boom happened in the year 2014 and latter. And during that same period of time, Congress overturned the crude oil export ban, which meant that we could now export crude oil. And so what did that do? Well, it’s a commodity. It’s a global commodity. Texas is not the only oil producing region. It caused an oversupply which crashed commodity prices globally. You know, I remember I was living in Houston at the time with my husband who worked for an oilfield service company offshore. And I mean, it was just for sale signs everywhere. We got a great deal in our car, but I mean, it was just tragic. Everywhere you looked, people were losing their jobs. And I can’t remember the exact number, but I remember it was like about 100,000 people lost their jobs in Houston alone. And what happened was that oil and gas companies drilled themselves into an oversupply and they had to make up their profits somewhere. So what did they do? They fired workers. They fired Texans. And you see that with the statistics. You know, production in Texas increased by 60% between 2014 and 2018 while jobs in extraction fell by 30%. And then, of course, we all know in 2020, after the Saudi-Russian price war and still sustaining oversupply, we lost 118,000 direct oil and gas jobs. And Texas was… I don’t know the exact number, but a significant portion of that. And I think the latest statistic I saw was that only something like 20% of jobs have recovered since that even with the record oil prices, because what happened during that time when productivity increased? Well, oil companies learned to do more with less. They need less guys out there on the rig. And even if they had less guys on the rig, they now have them as contract employees and they say, hey, we’re going to cut your pay by 20%, but you could make it up by working extra hours, by increasing productivity.
So they’re squeezing how much they’re fracking the earth, getting more from the earth, but they’re also getting more from the laborers and the workers. So, yes, it’s a… it’s not a good bet to put your chips in with the oil and gas industry for continual employment because they’ve learned to do more with less and they’re going to continue to do that. And if you read industry reports, if you read like, you know, Deloittes and McKinsey and all of those things, that’s what they keep on projecting. You know, there’s these new deals with like Microsoft and Google and Amazon Web Services to automate these rigs, to do a parallel digital twin test with the rigs. I mean, yeah, obviously it is safer and you need people to work on these rigs, but these companies don’t care. They’re going to figure out a way to have as few people as they can on those rigs doing that work. And so even though they’re up there, telling Congress saying, you know, we’re a good employer, the data says otherwise, the numbers say otherwise. We know that they’re not a meaningful, good employer.
Miguel Escoto: And that all of that context is important for us to discuss in terms of the Abandoned Well Act legislation that you work on. So considering all of these dynamics of oil and gas corporations leaving the workforce in limbo and not providing steady and sustainable sources of employment, I wanted to ask you about how addressing the crisis of abandoned wells can help address that. Right? Because in many of my discussions with community members in the region, imagination about alternatives is scarce. Many oil and gas workers dislike their work and want to transition to other sources of employment. From my conversations, even many surveys demonstrate this and it’s not surprising considering what you just laid out. But in the Permian, it’s really difficult to imagine these alternative types of jobs. And so you’ve worked on the Abandoned Well Act legislation. Can you describe how this policy proposes alternative sources of employment for the local workforce?
Megan Milliken Biven: Sure, of course. So my big slogan for this is we don’t need oil and gas companies. We don’t need C-suite marketing guys. We don’t need any of those people. Who we need are the riggers. We do not need oil and gas companies, but we do need oil and gas workers. And so the Abandoned Well Act was my creation and my attempt to form public policy in a way that’s not traditionally done anymore. You know, I was reared in the stories of World War II in New Orleans. You know, my grandfather worked at Avondale Shipyard, which built the Higgins fleet, it was the D-Day invasion vessels. And they, you know, there were, I think, 40,000 employees in one shipyard across the state building these vessels and building these boats within a two year time period. And that would eventually lead to our victory in Normandy. And that was kind of like my starting point, like it’s not about how much money we can save or how few workers we can employ. It’s like, what resources do we need to bring to bear to solve this problem? And when you look at the United States, you know, while Texas has close to 2 million wells, we have about 10 million wells across the United States historically. And that is not counting pipelines. That is not counting associated infrastructure. That is not counting offshore in federal and state waters. So you look at this massive, you know, field of wreckage that’s in front of us, how much we have to actually confront. And well, to me, I saw, well, you need a lot of jobs. You need a lot of people doing a lot of things. And as it stands right now, you know, private firms plug wells only in periods of what we found in high productivity. When they’re, you know, as they’re drilling, they’re plugging wells to improve, you know… I forget the exact… to improve pressure. And then of course state working well programs have been bare boned and underfunded intentionally and barely scratched the surface. So the Abandoned Well Act was my attempt to create a well-resourced, mission oriented program that dealt duly with the giant field of wreckage, with the fact that we have all this skilled labor that is going to just languish. You know, a lot of these workers are going to be pulled into other jobs, be it trucking, you know, the gig economy. And we’re going to lose those skill sets. But we actually need those skill sets today. We need those workers who have that expertise, if they are so inclined, if they would like to continue using their skills. And so the Abandoned Well Act would create field offices in every state across the United States where we would directly employ oil and gas workers upstream
to do this work. We would have our own equipment, our own work over rigs, our own everything, and we would have everything we need to do this work on a continual mission-oriented basis. And so I can go on and on, but I feel like I should give you a question. Yeah, I know you propose a question.
Miguel Escoto: That’s really like describing how historical context really helps us understand how we can address the climate crisis today right there. I feel like many times we’re put into tiny little boxes by oil and gas companies that say this is the amount of things that you are allowed to do, but we can think bigger. And that’s what I really appreciate about this sort of systemic program that does a lot of things all at once. It helps the local workforce transition away from harming the earth and it and it helps our water. That’s the other question I wanted to ask you about. So, we talk about this from an economic perspective of like employees and creating jobs but there’s also the aspect of clean and safe drinking water. Why is it important for us on an environmental level for us to monitor and maintain this field of wreckage, as you described it?
Megan Milliken Biven: I mean, I like water. Well, first off, it’s low hanging fruit for climate mitigation. Right? You know, you have 10 million holes. We need to stick fingers in those holes to prevent the gas. Like I picture an old Disney cartoon, putting your fingers in the boat and stopping all the water coming into the boat. But this is, I guess, the opposite. We have low hanging fruit. Like we know where these emissions are. We know how to stop them. And in terms of water, you know, why I want to create an agency and why I want it funded and not like a discrete program that lasts five years is that oil and gas wells are not plug and done. You know, steel corrodes, pressure builds. You know, I’m sure you’ve been watching the saga of the Antina cattle ranch in the Permian Basin where a previously plugged Chevron well blew out and just this week… a neighbor’s former… I forgot …it was a test well – blew out and it’s spewing salt brine across the landscape. It looks like, you know, a snowy Hoth in Star Wars. It’s just it’s just salt water everywhere. And what does that do? That destroys the water aquifer, you know, now you need like like desalinization. And in a place like the Permian, water is more precious than oil. And you see, I mean, if we talk about economics earlier, like, you know, the Chicago… excuse me… the Chicago Mercantile Group? I forget what they call it there, call themselves now. It’s the Chicago Board of Trade. And it’s a commodity exchange. And they now have water contracts. They have water futures. You know, water is going to be the next big commodity and Texas needs to protect it. They need to protect it so that it does not become like this asset that is only for the few because we all need water to live. And it’s ridiculous that we were just allowing it to be destroyed in this manner. Kind of went off on a tangent. Sorry. But yeah, these wells, you know, and they’re not plug and done, they pose a perpetual risk. We can plug it today, but we need to monitor it in perpetuity. We need to have it… because no state, no federal program currently monitors abandoned wells. When abandoned well… is a well that has been plugged and abandoned. But that does not mean that… we should not be continuing to monitor and watch these wells, because, like I said, they can fail. And then where are we left then?
Miguel Escoto: Right. And then there’s a dynamic of… of… the actual process of fracking that requires, I think in the Permian, it’s four… four barrels of water for every barrel of oil. Right. So there’s that aspect of water. We’re wasting water taking it out of the hydrological cycle. And at the same time, with all this wreckage that we’re leaving behind, we’re still keeping, still putting our water tables and our water sources at risk. And so that I mean, that, it’s a crisis on that level of just we need water, it’s necessary, and it’s running out and we need to take care of it. But when it comes to monitoring something in perpetuity, right? Why do you think it is important… It is so important for a job like this to be a public program instead of, say, Halliburton Corporation running these abandoned, well, reparation programs?
Megan Milliken Biven: Well, there’s no money to be made from a public good or service. There is only rationing, right? I mean, this is my view on privatization of public goods and services. You know, the only way that a company like Halliburton makes money doing this is by charging the government. Right? It’s a government service. So let’s just eliminate the middleman. You know, we always talk about saving money. Well, the profit of Halliburton is where we save money. And direct employment means that ok, these workers have a federal union. They have oversight. You know, I can’t audit… I mean, yes, even if it’s a public program, potentially, I could audit Halliburton’s records. I could do whatever. But this way, instead of, you know, sorry… there’s a lot of dogs barking outside, a little distracted. Do you mind waiting one second?
Miguel Escoto: Yeah. That’s alright.
Megan Milliken Biven: We live on a busy street. It’s just like…
(Megan making dog noises)
Miguel Escoto: No worries. Go for it. I’ll be here.
Megan Milliken Biven: Calm down, puppy. It’s okay. Alright there we go. It’s like, would you rather… What is that mercenary group that Erik Prince owned?
Miguel Escoto: Blackwater.
Megan Milliken Biven: Blackwater. It’s like would you rather Blackwater run your military or would you rather, you know, the United States Army run our military? I mean, that’s a terrible analogy, I guess, but it’s like… it’s a public good and a public service. We should have a well-equipped public agency that’s accountable and Democratically controlled do this work.
Miguel Escoto: Yeah. And it also gets to the question of accountability. These are the same… these drilling companies are the same ones that created this mess. So that’s another question that I wanted to ask you. Who pays for this?
Megan Milliken Biven: I wanted to say one thing. I wanted to say one thing about that.
Miguel Escoto: Go for it.
I think it’s about… so one thing I encountered… so background for the audience is that I previously worked for the Department of the Interior, as Bureau of Ocean Energy Management. And there was this weird dynamic. A lot of people from my agency did come from industry, right? Like there would be a boom and bust and they would somehow make their way over to the agency because it was stable and there was just good living compared to just the boom and bust cycle. But there was almost a deferential attitude towards industry like that is where the expertise lays. That is where the smart people are because they get paid the big bucks. Whether that is true, I would argue against that. But I think that the United States government needs to have the expertise to deal with this because as it stands now, we have these committee hearings, we have these webinars where you have high ranking government officials asking oil and gas companies, what’s the best way to do this? When we should have the in-house capacity. We should be… you know in my bill, I talk about an abandoned well lab where we have a national laboratory, could be in Texas, could be in New Mexico or wherever, where we test out the best plugging practices, we create new tools, we train our personnel in the best, safest of practices. We create new materials that they can wear to be protected. All kinds of things that we should be leading on instead of just deferring to unaccountable, shadowy transnational oil and gas firms. So I think there’s a lot to be said, not just about being accountable, but just developing the in-house expertise.
Miguel Escoto: Yeah, no, exactly. And that goes to this next point, which is… who pays for it — usually? How does it usually work where big oil and gas companies are like systematically sell off their low producing wells to companies that go bankrupt? How many times and many, many times taxpayers are the ones that are left to pick up the bill to clean up this industry’s mess, right? So how do we ensure that the firms created this mess are responsible for paying to clean up?
Megan Milliken Biven: Okay. That’s like six questions in one, Miguel, I’m just letting you know. Okay, so first, we are already paying for it both literally in terms of these orphaned programs, in terms of this new federal bill that just passed, the REGROW Act, in the bipartisan, bipartisan infrastructure bill. And we pay for it in terms of our farms, our schools, our our everything is being affected by these wells if they’re nearby them, right? Like the methane in the atmosphere, we are already paying a price. And so we have to acknowledge that those costs exist. Just because they’re not on, you know, Chevron’s balance sheets does not mean that they are not being imposed upon us. When a mother in the Permian has to take her child in for a respiratory event, that is a cost. You know, we talked about the Antina cattle ranch? She… the owner, Ashley Williams, had to move all of her cattle off site. That is a cost. These are costs over and over and over again that we all bear that are not on a spreadsheet, that are not on the evaluation on a stock price. Right. So we need to acknowledge that there are costs that are not being included in this conversation.
So how do we make them pay? That’s the next question. Well, this is the tricky part, right? Because they have so far the valuation of a company is, you know, there’s two sides of the ledger, right? Assets and liabilities. And these companies have been for decades operating like they have no liabilities. And under you know, under my bill, under the plans that we’re trying to push forward, all of a sudden these liabilities are going to be on their books. And so it’s, I mean, and I think once people get wise to the idea that they do have these liabilities they legally exist. There’s no escaping them. They exist. It’s just a matter whether we have a government that actually enforces and seeks the obligation for those liabilities. And so I’m kind of going around in circles right now.
Miguel Escoto: It makes total sense. The subsidies that they have, it’s not a fair… it’s not a fair… system.
Megan Milliken Biven: No, it’s not a fair system. These companies are almost entirely profit is almost entirely subsidy and government regulation that allows them to do these things, right? And so when you address all of this, the way I would do this, there’s multiple ways to do this. First, we need, at the state level, we need the full cost — trust funds. So you know how you have to save for college or you have to pay a mortgage every month you pay towards it? We should force oil companies to do the same for those wells and they can either put that money upfront at the beginning, the entire amount, or they pay a monthly amount. And then if they do the monthly amount, then there’s full cost bonding, which is an insurance policy. So the metaphor I use is you pay your mortgage and then you have your mortgage insurance, and that account would benefit the regulator. Right? And this is for the remaining production within a carbon budget. I know we’re already beyond our carbon budget, but the reality is that we still drive, we still heat our homes, until we can transition fully, we have to confront the reality that we are in now. And then, of course, a general wide orphan well fee across the entire industry. The way I’d like to do it is like we have a robust plugging program. We just sit, we divide the amount at the end of the year and send it to the companies. And then, of course, there’s no way we can get another thing we can add to this. I’m a maximalist. So I like all of the policy levers. I don’t believe in them counteracting each other. I think that you should just deploy all of them at once. And another thing that I proposed in my bill is something we did in the 90s. So they’re used… there are these institutions called savings and loans, right? They’re these community banks.
And in the 90s there were a bunch of Texas savings and loans in Louisiana, Texas, Louisiana and Texas saving the loans where the owners, the people who were running them, were basically just looting them and they were functionally valueless, they were insolvent. And the regulators recognized that this was happening and realized that if we did not… if the United States government did not do something, there would be a run on the market, that there would be a run on the banks, and we would have a collapse of the banking system. And these were community banks, right? And so what did Reagan’s government do? Well, they took them over. They appointed federal appointees to run these banks down, to win them down or to get them in proper order and to ensure there wouldn’t be a complete collapse. And so I proposed something similar where we reckon… we identify those wells and those companies that are insolvent. Because there are, you know, we talk about those scavenger companies that pick up wells after like toward their end life to producing life and they’re not properly bonded and they don’t have the assets to actually plug and abandon those files. So what the AWG would do is identify those companies, identify those wells and take them over and run them and then employ those people directly and use the remaining production to finance the plugging of those wells. Because we always talk about, oh, increased royalties, increased severance rates. Well, you know what’s a better cut? 100%. And the American people can get 100% of those cuts with them. You know, our current energy needs, as we wind down and switch over and for the audience to before you get all hot and bothered because this is obviously a… the people who are going to be listening to this are we’re comrades in the environmental movement. We should be doing this in parallel with ramping up everything else — offshore wind, geothermal, obviously, you know, we have to like wind one down and ramp the other one up in parallel supply side.
Miguel Escoto: And currently all of this is in the hands of boardroom corporations. Currently, all of these decisions are not… the public is not involved. And so and, and, and on the flip side of that, if there are any listeners that are a part of the industry, maybe they feel this, like, defensiveness of how can you attack oil and gas companies? Well, there are alternatives. And Megan has laid out for us literally millions of wells that need help and that need people on the ground to maintain in order to protect our water. So that’s another thing I want to stress here, is that this can be… this can be a great, great program for transitioning our workforce away from oil and gas production.
Megan Milliken Biven: Miguel, I’m sorry you made a really good point, that I have to follow up on. Okay. You might well, you made the point that right now these decisions are being made by boardrooms. Right. And you’re absolutely correct. So the question is, do you want this to be controlled by some C-suite assholes in the Netherlands or the UK or wherever in California? Or do you want a seat at the table? Do you want it because, you know, the bill also talks about having representatives from labor, from actual people who are in these jobs. Do you want them dictating the terms? Because the transition is already happening. We’re already leaving those jobs behind. So do you want, you know, an unelected C-suite jerk to determine this, or do you want your own elected people to do this and you at a seat at the table? Because that’s the question, right? The transition is happening in one way or the other. And so who’s going to determine the terms? Who’s going to divide up the spoils? That’s what’s happening.
Miguel Escoto: Exactly. Exactly. Transition is already happening just right now. It’s pure chaos. And what’s driving these decisions is not the well-being and sustainability of communities. It’s just profit. So, yeah, totally. Speaking of that, what’s already happening? I wanted to ask you about what the Biden administration is already doing. So, they have passed a version of abandoned well reparation policy. What do you think about it? Where does it fall short? Where can we improve it?
Megan Milliken Biven: Yeah. What can we do with the methane reduction infrastructure and infrastructure grant program? So there’s several prongs to this. There’s just straight up grants to the states and then there’s performance grants. What can we do? So this bill is not the bill I would have written, and it rewards the very actors that helped co-create the crisis. It’s because they wrote the bill. The Interstate Oil and Gas Compact Commission, which is comprised of industry and state regulators, wrote this bill. And so, of course, they gave themselves a big old payday. And the way I would ensure this is not a lost opportunity is well, for one, implement some uniform requirements, have a national definition of what constitutes an orphaned well, have one single database because every state is going to have to submit information on each well that it plugs. It’s going to have to submit information on how many people were employed, you know, what were the materials used… all of these things. So let’s use a single template, right? That’s pretty simple, that we put into one single national database that we could any of us could pull up and know, hey, I can look on a map like on the database and pull it up and say, Oh, this well was plugged by this company on this date, this many workers using this material. That seems like an easy, like baseline thing that we should all agree on. In addition to that, national plugging standards you know that vary only by geographic conditions, of course. And what, you know, the techniques and while plugging in that you do in Permian, Texas versus Appalachia, where there might be a coal bed seam nearby, are going to be a little bit different. But we should have some uniform criteria and standards.
So those are like, you know, just real baseline things. But then there’s going to be performance grants, right. Grants that the states have to apply to based on some kind of reforms at the state level. The language in the bill is very generic and broad and I assume that right now the implementers of this are going through some rulemaking, be it with Mitch Landrieu and his infrastructure team or with the Department of the Interior. What constitutes a reform worthy of these performance grants? And I have some recommendations, you know, like you talked about these inventories of orphan wells. Well, I think more pressing is, you know, the inventories of inactive and idled wells across the states. You know, a lot of states allow… they have plugging requirements within a certain period of time, like after production is officially ceased you are supposed to, you know, plug in abandoned within the time period. But they have like 20 different reasons for why you don’t have to do that, you know, like future beneficial use, you know, I don’t want to and they’re pretty much tied. Like in Texas, the Railroad Commission is tied to approving those extensions. And so as a result, we have wells that are just sitting there unplugged, languishing in inactive status and idled status for decades. And so one requirement that the federal government could impose upon states that would be an absolute win is to repeal all plugging extensions. Easy peasy. Repeal plugging extensions, because plugging extensions mean that there are basically no plugging requirements and they will necessarily create orphan wells. And so I won’t regale you with everything on this list. But there’s a lot of things we can do.
Miguel Escoto: There’s a lot. And thank you for that overview. I think this is an incredibly important political arena. Abandoned wells, plugging in wells. I think that this is where the environmental movement and the labor movement can really unite forces. And yeah, thank you for giving us this overview and helping us with this idea of imagining alternatives, right? We can imagine former oil and gas workers being environmental heroes with things like this. And for me personally, it really gives hope that it’s possible that the transition is really possible.
Megan Milliken Biven: Well, thanks. I’m happy to hear that. I mean, like I said, we do not need oil and gas companies, but we certainly need oil and gas workers. There’s no reason why these people should not be paid a continual salary, have good benefits, have everything that they need to live a comfortable life and perform their work in safety.
Miguel Escoto: We were talking about the respect that we have for these guys that are actually doing the plugging in these wells. It’s a pretty nasty, dirty endeavor, isn’t it?
Schuyler Wight: It is, absolutely. I’ve got a lot of respect for these guys because they get out there, wade through the mud and through all this crap, and they go out there and they get these wells plugged up. I don’t want to do that job. I’m too old to do it now. But, uh, when I was younger, I didn’t want to do it because it’s too nasty. I’ve got a lot of respect for these guys, so. And these wells need to be plugged properly. That well that’s over there that we saw last time in Section 24 that well, according to the paperwork filed with the Railroad Commission, it is plugged, but it was not plugged properly.
Miguel Escoto: So not only is it important for these wells to be plugged in, because obviously we want to protect our groundwater, we want to prevent it from flowing to the surface, but we also have to do it very well. And it’s something that has to be invested in substantially.
Miguel Escoto: Thanks for listening to this episode and traveling this far into the series. In our next and final installment, we will discuss the important intersection between environmental justice and labor justice. Talk soon.
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