ecuted before the mid-1980s) do not have restoration language, and landowners cannot force a company to rehab the area unless they can prove negligence. Since the landowner is responsible for cleanup, con-
sider establishing a restoration savings account to be used when those older wells dry up. Protect livestock by fencing off sludge pits, tanks and other equipment that pose a danger. “You need to require full restoration if you have
the authority to do that,” Wallace advises. “If you’re the lessor of the oil and gas lease or sign a surface use agreement, then you want the lessee to agree to restore [the surface] to a certain condition. Spell it out as in- depth as you like.” The lessor and lessee will have to agree on the conditions, however. Important points may include removing caliche and
trucking it to a location that is benefi cial to the ranch or farm. Hauling off sludge, drilling mud and pit lin- ers before fi lling pits with previously saved topsoil is a good strategy. Stipulate that the oil company relocate equipment, such as above-ground pipes, pumpjacks, tanks and electric lines.
Test the water Wallace highly recommends requiring the lessee to
pay for fresh water testing. Landowners can inspect the surface restoration, but they cannot see if oil has entered the aquifer. If water quality tests have been conducted at intervals during oil/gas production, any recent pollution will be easier to confi rm. “If you can get [water quality tests] done as part of
the oil and gas lease or an SUA, you at least have some ability to hold the lessee’s feet to the fi re fi nancially, and take care of your water losses,” Wallace advises. “For most ranches and farms, water is the key to be- ing able to operate.” The Texas Railroad Commission (RRC) mandates
the plugging of spent wells to protect fresh water. This is such an expensive procedure that the RRC requires each oil/gas company to provide a plugging bond, so that if the company leaves the state or declares bank- ruptcy, plugging will be completed. The RRC diligently checks paperwork to locate people who are responsible for plugging. For example, a landowner buys a 1 per- cent interest in a neighbor’s oil well as an investment. Later when the operator declares bankruptcy, the RRC holds the investor responsible for well plugging. Years ago, landowners thought they were obligated to plug wells, but the law now states that only working inter- est owners are responsible.
tscra.org
The RRC requires that plugging be completed by
fi lling the well with an appropriate cement mixture to certain depths. This vital procedure prevents oil and chemical leaks into fresh water. Oil companies usually hire a plugging company. To save money, the oil company often offers to let the plugging company take casing, pipes, wellhead, tanks and other equip- ment, which can be sold or used in other locations. Known as salvage, this practice may benefi t the land- owner who has an old lease that does not require site restoration. Wallace advises that landowners or their represen-
tatives be present to observe the plugging procedure, to ensure it is properly completed. A reputable plugger will explain what he is doing and why. Landowners may contact the RRC if they have concerns. Unfortu- nately, many companies postpone plugging. The RRC and Texas Legislature are working to improve plugging delays. Wallace recommends that landowners with unplugged wells periodically call the RRC to check on the plugging schedule. Occasionally, companies will ask to rework old wells
to utilize a new technology — high pressure hydraulic fracturing, commonly known as fracking. This tech- nique injects fl uids at high pressure into subsurface rock formations to improve oil or gas fl ow into a well bore. Be aware that pipes used in older wells were not designed for the fracking pressures used today, so they have most likely weakened while sitting in the salt-water environment used in that process. Wallace recommends that the company test the pipe to deter- mine if it can handle a present-day frack job. One benefi t of having a dry oil well is the ability to
convert it to a water well if the original casing is near a fresh water aquifer. Digging a new water well is pricey, but under Texas law, a landowner may specify in the lease that he have the right to take over the well from the operator. By using an existing well bore, the pipe can be perforated at the proper depth to pump water. Hire a water well driller who is familiar with this
procedure. He or she will work with the RRC to assign the well from the oil company to the landowner and other reconditioning requirements. The landowner will be responsible for plugging when the water well is no longer viable. Although oil or gas wells may be depleted, land-
owners should continue to be proactive. If oil company activities do not seem quite right, call the RRC’s district offi ce where the well is located or a trusted oil and gas attorney.
November 2016 The Cattleman 69
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