A lesson for Guyana: Chevron sued for leaking oil wells in Texas, decommissioned 30 years ago

Aug 18, 2024 News

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Kaieteur News – Ashley Watt, the owner of a 22,000 acres ranch that sits above roughly 330 oil wells, has sued American oil company Chevron for dozens of leaking oil wells that have contaminated the land and groundwater on the Texas property.

Watt, who inherited the ranch from her parents, filed a lawsuit in the 109th District Court in Crane County against Chevron and other oil companies in December 2022. She alleges that the multinational and smaller companies failed to properly plug and abandon wells on the property. She argues that old wells are now leaking.

Watt said, “This is a colossal liability that’s going to have to be borne by somebody…whether it’s the companies—or, if they pass the buck—the taxpayers of the state of Texas.”

Leaking wells 

The lawsuit, according to Inside Climate News, could upend assumptions about plugging oil and gas wells.
The common wisdom is that once an oil or gas well is plugged, the chapter is closed. Regulators don’t require operators to go back and check the plugs. Everyone assumes that crude oil, produced water and gases like methane won’t leak from a plugged well.

Watt and her team are however documenting how decades-old plugs can fail, with disastrous consequences. She wants Chevron to re-plug and remediate wells on her land.

The first sign that something was wrong at Antina Ranch came in June 2021, when the Estes 24 well began spewing toxic water to the surface.
The Watt family cattle operation had co-existed with oil and gas drilling for years. Her parents bought the ranch in 1995.

The ranch measures half the size of Washington D.C. Hundreds of wells were originally drilled by Gulf Oil in the 1940s and ‘50s. The Standard Oil Company of California purchased Gulf in 1984, rebranding it as Chevron.

The multinational took over the Antina assets, including the Estes 24 well. Chevron plugged and abandoned the well in 1995. Estes 24 wasn’t supposed to leak oil or produced water, which is salty, toxic wastewater laced with heavy metals that was supposedly encased underground.
Chevron eventually re-plugged the well at Watt’s insistence. But in the process Watt and her attorney, Sarah Stogner, developed what they describe as a deep distrust of the company. They say they set out to find other leaking wells on the property.

In the three years since the original well blowout, Watt and Stogner say they have excavated about 90 of the roughly 330 wells on the ranch and found widespread integrity problems. As the scale of their endeavor became clear, they brought on Daniel Charest, an experienced Dallas trial attorney with Burns Charest LLP.

“This problem went from being, ‘Oh, there’s a leaky well or two,’ to, ‘There are hundreds,’” Watt said.
In December 2022, Watt filed the suit against Chevron and Walsh and Watts Inc., Pitts Energy Co. and Williams Oil Company, smaller oil companies that took over low-producing wells on the ranch.

The lawsuit aims to get the wells re-plugged and for Watt to be made whole for the damages to the property. Watt wants the court to find Chevron and the other companies liable for contamination, require cleanup and restoration of the property and require Chevron to pay monetary damages.

Carcinogen found 

In a filing earlier this year, Watt stated that test results have found constituents on the surface or underground including benzene, toluene, arsenic, radium-226, radium-228, ethylbenzene and xylenes, all heavy metals. She no longer uses well water on her property and has moved all the cattle off the ranch. Benzene is a known human carcinogen; benzene, toluene, ethylbenzene and xylenes can all harm bone marrow, the central nervous system and the immune system.

Watt isn’t the first Permian Basin landowner to report leaking and compromised wells on her property. But she said she is determined to get her day in court and has poured upwards of $1.5 million into the case. She acknowledges that few landowners have the financial resources to litigate such an expensive, contentious case.

“This is one ranch, one part of Texas. But the scope of this problem is mind-boggling,” said Charest, the attorney. “There are ranches all across the state that don’t have these resources.”

Chevron sought to halt the excavations with a court order, arguing they could damage the well plugs and compromise evidence before trial. The company also questioned whether Watt had the authority to excavate the wells.

Chevron has also asked the court to compel Watt to disclose the number of contaminated wells and the specific constituents identified at each well.

For decades these well plugs were out of sight below the hard caliche soil of the Permian Basin. But now they are key evidence in a case against one of the world’s biggest oil companies.

“Chevron has successfully re-plugged wells on Antina Ranch, without any lawsuit or court orders requiring us to do so,” Chevron public affairs advisor Catie Matthews said in an emailed statement. “Chevron will continue to coordinate with the Texas Railroad Commission and respond appropriately to any potential concerns at Antina Ranch.”
Matthew declined to comment on the litigation.

Safe decommissioning? 

“If we want [wells] not to leak, we need to design them to last for the future of humanity,” said Dwayne Purvis, a petroleum engineer and oil and gas consultant at Purvis Energy Advisors. “But I don’t think anybody conceived to do that at any point in the history of the industry.”

Purvis said it’s basic economics. A plugged well is no longer a money-maker for oil and gas operators. That means companies try to minimize costs while plugging and have no economic incentive to go back and check old plugged wells.

“Oil companies won’t do that until there’s a need to do it,” Purvis said. “And that need is probably going to have to come in the form of regulation.”

Bankruptcies are also common among smaller operators, so in many cases there is no corporate entity to hold responsible for an old, leaking well.

Oklahoma University petroleum engineer Catalin Teodoriu said that a well plugged in the 1950s or ‘60s would not meet today’s industry standards. But he agreed more research is needed to understand how corrosion and other underground forces can compromise plugged wells. At his laboratory, Teodoriu is studying how different cement well casings age over time.

“As in almost every engineering system that we build…. your system will fail sooner or later,” he said. “Nothing is made forever.”

A lesson for Guyana 

Guyana commenced oil production in December 2019. Hydrocarbons were first discovered by the American oil supermajor, ExxonMobil back in 2015. Currently, three Floating Production Storage and Offloading (FPSO) vessels are in operation, collectively producing about 645,000 barrels of oil per day (bpd).

In addition to the three projects that are producing, Exxon and its Co-Venturers have also received regulatory approvals for another three deep-water developments, with a seventh permit pending approval.
Each project has a 20-year life span after which Exxon will engage in decommissioning activities. The company has already commenced deducting monies from Guyana’s oil to pay for decommissioning, although it has not yet finalized the decommissioning plan.

The company has said it may plug the wells, while the risers used to transport the hydrocarbons to the FPSO could be detached and left on the seafloor. Concerns were previously raised regarding the company’s intent to leave behind its waste behind but Exxon argued that this move could be better for the environment since organisms could have started living on the equipment.

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• Chevron, decommission, Guyana, lawsuit, Texas, wells

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