Don't know if this is released yet, but GLO declares war on ExxonMobil... Although junking the hole is a despicable practice, it is common. We rarely do re-entries into plugged wells because of the high likelihood of junk and rig-time issues associated with it. Often, it is done, not out of malice, but laziness. It is wrong, and it has had the effect that operators themselves that condone this behavior have sabotaged the oilpatch worse than any Jihadist would want to do. I support Patterson here, and would like to see the RRC adopt plugging rules that aren't entirely outdated and would allow easy reentry to boreholes after plugging.
Patterson requests state hearing on Exxon oilfield abuses
Company’s oilfield sabotage, fraud and cover-up exposed in nearly 20-year-old case
AUSTIN — Jerry Patterson, Commissioner of the Texas General Land Office, today
requested that the Texas Railroad Commission hold hearings into Exxon-Mobil’s
intentional sabotage of oil wells in Refugio County as well as the company’s fraudulent
reports covering up the damage. The “show cause” hearing would require the America’s
top oil producer to explain why it should not pay administrative penalties that, theoretically,
could exceed $1 billion.
“Exxon committed irrefutable, intentional and flagrant violations of state rules regulating the
oilfield,” Patterson said. “As Texas Land Commissioner, and responsible for millions of
dollars worth of state oil and gas resources held for the schoolchildren of Texas, I cannot
stand by and let this kind of egregious behavior go unpunished. The Railroad Commission
must act to enforce its own rules against Exxon.”
According to Texas Railroad Commission regulations, Exxon-Mobil could face penalties of
up to $10,000 per well, per violation for every day since 1992. With over 100 wells in the
original lease, the financial punishment could be enormous, but a conservative estimate puts
the figure at least in the hundreds of millions.
The case centers on a dispute with the O’Connor family, a venerated Texas dynasty with
roots going back to the Republic. In the 1950s, Exxon-Mobil negotiated an oil lease with
the O’Connors for their oil-rich expanse of land in Refugio County. When the relationship
turned sour in the 1990s, Exxon-Mobil terminated the lease and plugged the wells. As per
state rules, Exxon filed paperwork with the Railroad Commission outlining its wellplugging
procedures and filed sworn affidavits as to the final condition of the wells.
The O’Connor family soon learned those reports to the Railroad Commission were
fraudulent.
When an independent producer, Emerald Oil, attempted to capitalize on new legislative
incentives to reopen abandoned wells, they found the old Exxon-Mobil wells hadn’t been
plugged but sabotaged — filled with junk, cut well casings, contaminated oil tank sludge
and even explosives. Many of the wells were left unrecoverable.
In the subsequent litigation between Emerald and Exxon-Mobil, the trial court found
Exxon-Mobil had intentionally, systematically and secretly damaged the wellbores and lied
about it in the Railroad Commission filings. A Court of Appeals upheld the ruling, and the
matter went to the Texas Supreme Court.
The Supreme Court did not rule on the merits of the issue, but reversed the ruling on a
statute of limitations technicality. This week, Patterson asked the Supreme Court to rehear
the matter given the serious nature of the crimes involved.
“It is vital that the integrity of the Railroad Commission rules be upheld, whether or not the
Supreme Court chooses to address this case again,” Patterson said. “The senseless waste of
our natural resources, the sabotage of a producing oilfield, and cover-up by Exxon is a
malicious act that must be dealt with by the state of Texas.”
As commissioner of the Texas General Land Office, Patterson is a fiduciary to the Texas
Permanent School Fund. Oil and gas produced on Permanent School Fund lands have
earned more than $11.5 billion for the Permanent School Fund, which helps offset the
state’s share of funding for public education.
Patterson, a Republican, reiterated that he was not siding with environmentalists in their
war against Big Oil, but rather would like to encourage oil production through solid
enforcement of the law.
“This kind of fraudulent, nefarious activity by one bad actor brings discredit to an industry
that overwhelmingly plays by the rules,” Patterson said. “I worked as a roustabout on an oil
rig and I know that an oil company can be a great steward of natural resources because it
has an economic incentive to do so. You don’t foul your own nest. And that is exactly
what Exxon has done.”
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TEXAS GENERAL LAND OFFICE
JERRY PATTERSON, COMMISSIONER
Office of Communications ● Mark Dallas Loeffler, Director
1700 N. Congress Ave. ● Austin, TX 78701-1495 ● 512-463-5339 ● Fax:
512-475-1415
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