Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Orphan Wells topic
No spam. Unsubscribe anytime.
Corporation Commission urges long-term funding plan as well-plugging backlog remains large
Summary
The Oklahoma Corporation Commission told legislators its oil-and-gas backlog remains substantial even after federal funding, estimating about 17,000 wells would still need plugging under current assumptions; agency leaders outlined digital upgrades and a request to cover an anticipated office rent increase.
The Oklahoma Corporation Commission told the Senate appropriations committee that fixing the state’s long-standing orphan- and abandoned-well problem will require multi-year attention and new funding approaches.
The commission’s director said the agency’s inventories and cost projections show a persistent gap: even with the federal award the agency expects to receive, the office estimates roughly 17,000 wells would remain to be plugged if current lists and funding levels hold. Director: "If the list stays static, even with additional funding, there's still about 17,000 wells that would need to be addressed," and on current revenue streams "it would take 235 years to resolve." The commission also said it will get $102,000,000 from the IJA for a plugging program that it anticipates could plug about 4,500 wells.
Why it matters: Lawmakers pressed agency leaders on whether current fee structures, bonding and appropriations are adequate to address environmental, property and public-safety risks from aging and orphaned wells. Agency leaders emphasized that production-linked fees and excise taxes are volatile and that the commission receives a very small fraction of gross-production and excise taxes—about 0.42%—which equates to roughly $2.7 million off the top for oil-and-gas operations.
What the commission proposed: The presentation highlighted several internal priorities the commission says justify legislative attention: a digital-transformation program that centralized revenue tracking across 230-plus streams, an expansion of an ITD module to automate renewals and inspections, and a well-plugging module intended to manage the surge of federal funds and bidding. The director said the agency deployed $5,300,000 in appropriations for digital work in 2020 and acknowledged a smaller cut last year of $416,000 to that funding.
Staffing, leadership and facilities: Commissioners introduced new interim director Jim Marshall, a unanimous appointment reported to have occurred last week, and described a potential rent increase tied to returning some functions to the Jim Thorpe Building. Lawmakers asked detailed questions about phased moves, which the director said are planned to avoid disrupting courtroom functions, and about how OMES calculates rentable versus common space.
Legislative context and next steps: Senators pressed staff on whether bonding requirements and operator surety are adequate and asked how recently passed SB 132 (which adds gas-well plugging authorities and timelines) will be implemented; Jeremy Hodges, Director of the Oil and Gas Conservation Division, said the agency has notified operators covered by SB 132 and is working with them to refine lists and timelines tied to the new law. The committee did not take votes on funding at the hearing; the commission said it will provide requested revenue breakdowns and additional numbers by the end of day.
