The Big Business Behind Texas’ Smallest Wells

Drive through the Permian Basin, and you’ll pass thousands of them: aging pumpjacks nodding over wells that produce just a few barrels a day. These are Texas’s low-producing wells — often called “marginal” wells — and the state has more of them than anywhere else in the country. Individually, each produces very little. Together, they tell one of the most consequential and least understood environmental stories in American energy.

Peer-reviewed research measuring emissions at well sites across the country found that low-producing wells are responsible for roughly half of all wellsite methane pollution in the United States, despite contributing less than 5% of the nation’s oil and gas production. Methane is the main component of natural gas, and is a potent climate pollutant responsible for about 30% of the warming we’re experiencing now.

And since methane is the primary ingredient of natural gas, every cubic foot of methane that is vented, flared, or leaked from these sites is Texas-produced energy that never reaches a pipeline, a power plant, or a customer.

That waste has a price tag familiar to anyone who follows the state’s energy economy. That wasted natural gas often results in lost royalties for mineral owners, lost severance tax revenue that funds. Texas schools and roads, and lost value for the local governments and communities that depend on oil and gas dollars. It also carries a public health dimension: methane rarely leaks alone, and air pollutants that travel with it affect Texans, especially those living closest to these sites.

Who owns these wells? The popular image is the small, family-run operator — a “mom and pop” business scraping by on a handful of aging leases. Some of those operators certainly exist. But the ownership data tells another story. A small group of very large corporations dominates ownership of the nation’s low-producing well sites: just 91 companies, each holding more than 1,000 operating well sites, control nearly half of them. More than three-quarters of low-producing well sites are owned by companies with more than 100 active wells. Truly small companies — those with 25 or fewer operating sites — control just 8%. One of the most active buyers of these aging wells, the privately held Houston company Hilcorp Energy, operates thousands of low-producing sites across several states and has ranked among the largest reported methane emitters in the U.S. oil and gas industry. That distinction matters right now. Policymakers in Washington are weighing whether low-producing wells should be exempt from all federal clean air and methane standards under the Clean Air Act. Texans deserve an accurate picture of who would actually be affected — and the data show the primary beneficiaries would not be small family operators but rather some of the largest and best-resourced corporations in the industry.

The good news is that this is a solvable problem. Proven, low-cost technologies — regular leak inspections, updated equipment, better maintenance practices — are already in use across the Permian and other Texas fields. Many Texas operators, large and small, have made those investments and shown that cutting waste and staying competitive go hand in hand. Their experience demonstrates that the responsible operation of low-producing wells is not a hardship. It is a business practice already working in the field today.

Texas leads the nation in energy production, and Texans take pride in that. Leadership also means stewardship: ensuring the gas we produce powers homes and businesses rather than leaking into the atmosphere, and ensuring the facts about emissions, waste, and ownership are part of the conversation as decisions are made.

Learn more about low-producing wells and methane waste at texasmethanenetwork.com.