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Oklahoma Corporation Commission outlines staffing gains, warns of oil-well plugging shortfall
Summary
The Oklahoma Corporation Commission told the legislature it used last year ppropriations to hire inspectors and cut wells-per-inspector by about 10%, but said federal grant requirements and the scale of abandoned wells mean the state still faces a multi-hundred-million-dollar plugging gap.
Brandy Reath, director of administration and executive director for the Oklahoma Corporation Commission, told the House appropriations subcommittee the commission used additional appropriations last year to hire more field inspectors and reduce the caseload per inspector.
"We have around 175,000 active oil wells," Reath said. "That brought down the number of wells per inspector by about 10%" and "they each have around 2,279 well sites on average they're responsible for." She thanked the legislature for the support that funded the hires.
Reath described other agency priorities, including cross-training field staff to handle utility and pipeline issues, expanding emergency-response coverage at ports of entry, and a new drone program to find abandoned wells. She said the commission bought an in-house LiDAR-capable drone after a yearlong vendor search to satisfy executive-order restrictions on foreign software.
On plugging funding, Reath described two programs: a limited state plugging fund financed by surety and a federal IIJA grant. "The first round of that money was $25,000,000," she said, and the commission used nearly all of that to plug wells. But Reath cautioned the federal rules for a new round require methane testing, which will raise per-well costs and reduce the number of wells the state can plug.
Reath gave the committee numbers from recent work: the state plugging program plugged 27 wells using about $1,012,000 of state funds and 17 wells using $254,000 of surety. The IIJA grant expended roughly $23.9 million to plug about 110 wells in the first round, she said.
Reath warned of scale: "There are right at 18,000 wells on the abandoned pluggable well list currently," she said, and she told lawmakers the known abandoned well list does not include a much larger set of pre-reporting wells that could add substantially to liability and future costs. She said the commission will provide a data report to the legislature soon that overlays historical aerial photography with current maps to help target sites.
Committee members asked about surety and how the fund is handled if a bond exceeds reclamation cost. Reath said forfeited surety goes into the plugging fund, not to agency operations, and that cash surety is low. A committee member said cash surety held by the commission was about $5.2 million.
Reath and the committee also discussed related workforce issues: market adjustments to keep engineers and technical staff, the commission—inding efficiencies by transferring surplus fleet vehicles to rural law enforcement, and the continuing challenge of rural fuel deserts caused by federal equipment mandates for small fuel retailers.
The commission did not ask the committee to adopt a specific statutory change during the hearing; Reath urged lawmakers to consider broader programs to help rural fuel retailers and to monitor bills that would reform surety requirements for oil and gas operators.
