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Texas Faces Record Spend to Plug Abandoned 'Orphan' Oil Wells, Says IEEFA

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The Railroad Commission of Texas, which regulates the state's oil and gas industry, says it is facing soaring costs for plugging and remediating 'orphan' wells, the Institute for Energy Economics and Financial Analysis said on Tuesday.

The commission forecasts a record spend of $202 million to plug its current list of orphan wells that have been approved for remediation and decommissioning using public funds.

IEEFA said that "Texas is on a well-plugging hamster wheel whose liability has grown with each passing year,".

An oil or gas well is defined as orphaned if it has not produced hydrocarbons in more than a year and its paperwork has been "delinquent" for at least the same period.

IEEFA said the rising cost was linked to the number of orphan wells approved for plugging, the growing average depth of each well added to its list and rapid growth in the cost of plugging each one.

As of March 2026, the commission's list has 3,632 orphan wells, the highest ever number while the average depth of each is up 61% in a decade to 3,062 feet. The per-well plugging cost is now $55,629, up from $23,807 in 2016.

As a result, the outstanding costs the state faces to plug wells has been growing by 22% annually since 2016, IEEFA said, a burden ultimately borne by tax payers.

Texas spent $575 million on such work from 1984 to March 2026, plugging 47,757 orphaned wells "left behind by noncompliant or defunct oil and gas operators," IEEFA said.

The research said that this was down to irresponsible operators in the oil and gas industry that dodge their clean-up responsibilities at a faster rate than wells are plugged.

The number of Texan shut-in or inactive wells overall is 156,664 as of March, with roughly half of operators having now ended production at about one quarter of their wells.

The report does not discuss why it is so difficult to trace the companies that formerly operated the wells and have failed to subsequently seal them, given how much effort and time is spent granting access to and permits for oil resources at the outset.

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