In this episode of The Crude Truth, host Rey TreviƱo welcomes Texas Railroad Commission Chair Christi Craddick to discuss the vital role of the oil and gas industry in Texas amid a shifting regulatory landscape. As the state gears up for an important election, Craddick shares her insights on how the Railroad Commission balances fair regulations with innovation, ensuring job creation and industry growth. She highlights key initiatives, such as plugging orphan wells and securing funding for environmental projects, while addressing the challenges posed by federal overregulation and programs like the Inflation Reduction Act.
The conversation dives deeper into industry challenges and opportunities, including legislative incentives for orphan well management and the use of CO2 and water in enhanced oil recovery methods. Craddick emphasizes the critical role of small operators and efficient drilling practices in Texasā oil landscape. They discuss the implications of increased oil production in the West Texas oil field, smart water management, and the proactive measures the Railroad Commission is taking to tackle emergencies. Wrapping up, Craddick reflects on her motivation for seeking re-election and her commitment to maintaining Texas’ energy leadership amid federal pressures.
Highlights of the Podcast
01:38 – Introduction of Christi Craddick
03:39 -Texas’ Oil & Gas Industry Challenges
05:27 – Fighting Overregulation
06:49 – Legislative Session and Agency Challenges
08:11 – Orphan Wells & Environmental Responsibility
10:37 – Funding for Orphan Wells
16:01 – Federal Regulation Challenges
18:25 – Request for Additional Funding
20:21 – Incentivizing Operators for Orphaned Wells
22:09 – Acquiring Full Leases
24:11 – Idle and Inactive Wells in Texas
25:55 – Innovation in West Texas
27:41 – Seismic Activity and Fluid Management
29:20 – Emergency Response and Blowouts
33:16 – Why Christi Craddick is Running for Reelection
37:10 – Importance of Voting in the Upcoming Election
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The Crude Truth Ep. 104 Christi Craddick Railroad Commissioner of Texas
Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Rey TreviƱo [00:00:00] There’s no doubt about it. Texas is the global standard when it comes to not only oil and gas production, but keeping regulations to a minimum, but also enforcing the right rules at the right time. As we continue into this election, we talked to the chairman of the Railroad commission here in Texas, Christi Craddick.
Narrator [00:00:19] In 1901, at Spindle Top Hill near Beaumont, the future of Texas changed dramatically as like a fountain of fortune. Thousands of barrels of oil burst from the earth towards the sky. Soon, Detroit would be cranking out Model TS by the millions. And America was onĀ the move thanks to the black gold being produced in Texas. Now more than a century later. The vehicles are different, but nothing else has truly changed. Sure, there may be many other alternative energy sources like wind and solar and electric, but let’s be honest, America depends on oil and entrepreneurs. And if the USA is truly going to be independent, it has to know the crude truth.
Narrator [00:01:03] This episode is brought to you by LFS Chemistry. We are committed to being good stewards of the environment. We are providing the tools so you can be too. Nape Expo where deals happen. Air compressor solutions. When everything is on the line, Air Compressor Solutions is the dependable choice to keep commercial business powered up. Sandstone Group. Exec Crue. Elevate your network. Elevate your Knowledge. Texas Star Alliance. Pecos Country Operating Fueling Our Future.
Rey TreviƱo [00:01:38] Well, hello again and thank you so much for tuning into another episode of The Crude Truth as I shoot today from our studios here in Austin, right overlooking the state capitol and the governor’s mansion. It is no doubt about it that right now is a crucial time. And you’ve been hearing it everywhere and you’re going to hear it here again. This election is just so important. There are so many issues that need to be solved. There are so many leaders that we need to put in office, are keeping us in office to only keep us moving strong and forward into 2025 and to continue into really 2100, which really is only 75 years away, y’all. But I digress on that part. And today I bring in somebody that knows what’s going on, because here in the oil and gas industry, it is crucial to not only be partners with the Railroad Commission, but also work with them in a way that helps the small operators out and also helps give them the big picture on things that are going on here in Texas. Because as I mentioned in our teaser, y’all, everybody comes to Texans to know how we’re doing things and how we’re regulating. And that means that we are setting the example and we set the proper example. So today, I welcome Christi Craddick back on. Ma’am, how are you?
Christi Craddick [00:02:55] Well, thanks for having me.
Rey TreviƱo [00:02:56] My gosh. Thank you so much. And thank you for the time you have been on a whirlwind really since, I don’t know, the last 6 or 8 months with the campaign from the primaries now, the general election we have been. And how’s it going out there?
Christi Craddick [00:03:09] It’s going well and we’re busy about a month to the end. So we’re we appreciate everybody who’s helping us, where we’re traveling the state, listening to what’s going on and reminding people to vote.
Rey TreviƱo [00:03:20] Well, I think the most important thing there is you’re listening to people and you’re telling people to get out vote. What are you hearing out there right now? Because you’ve been all over for listeners out there that don’t know, the state of Texas is huge. So to travel the state, that’s no ordinary feat for any anybody running for election. But what are you hearing out there?
Christi Craddick [00:03:39] Well, you know, East Texas has different challenges than West. And I’ve been in both in the past week. So. And we love going across the state. Look, I think West Texas and East Texas south and the whole state is very concerned about where the oil and gas industry could go with this next administration, striation depending on who wins in November. So people are concerned about that. But that being said, everybody is happy, I think, today with the road commission, for the most part, we’ve got fair, consistent rules and regulations. They’re innovating. And when you’re making money and employing people, the industry is moving forward and continuing to to create those jobs. I think that people have a lot of questions. So what’s going on in this industry? And like I said, I’m concerned about what Washington can do to us. And as far as overregulation, which we’re already seeing and want to make sure as we continue in Texas that we have, they have opportunities. Again, it’s about job creation. It’s about opportunities for families. And where are those tax dollars going? Because people are concerned about their families Generally, it costs more to eat. It costs more to fill up at the pump. And they want to make sure that their families are taken care of. And the oil and gas industry is a job for them.
Rey TreviƱo [00:04:59] You know, you mentioned there that, you know, there’s just so many different parts of how the economy really here in Texas only continues to thrive under the oil, under oil and gas, and how this administration in Washington right now only continues to add on. More regulations are continue to try to you know your office is a well I’ll I’ll let I’ll I’ll just ask a question rather than it’s like, you know, what are you guys doing to help fight off all these overregulation there?
Christi Craddick [00:05:27] Well, we work a lot with the attorney general’s office. So he, we appreciate, is suing this administration on several fronts. And so we hope that that’s one way. To stop what? Some of this overregulation. But the other piece really is for as an agency, we want to have fair, consistent rules, regulations, but we also want best practices. So we have about four rulemakings going on right now. We’ll make sure our rules are up to date on all fronts, and we think that that makes industry continue to do the right thing. And in which I think they want to do gives them opportunities to continue to clean up the environment. We want to make sure we’ve got good inspectors and people working at this agency. Our biggest challenge is always been that industry goes and hire some. So because we have good people who work for us and making sure we’ve got enough resources for that our agency. And so when I think you started said we were in Austin and legislative sessions coming. So we are working on our budget for next session and we want to make sure we’re prioritizing keeping good people. Continue our I.T. upgrade, which we’re almost done with, and getting more dollars for, well, plugging because that’s a priority for this agency as well. So those are issues we’re already working on with the legislature.
Rey TreviƱo [00:06:49] Well, you know, first of all, the I thing as a whole, I think is still moving forward. Great. We’ve talked about it before and congratulations on getting close to done. I just don’t any and in any company upgrading your of it it’s always going to be I’m sure you all have a part of you and you all are done with that.
Christi Craddick [00:07:05] We’re almost done. So we are going back in this session. The last big tranches r u r c, which is disposal wells and and that part of our sector as well as alternative fuels. We’ve got a few got a few parts to finish, but this is our last big, big ask this session and we’re expanding that because of what’s going on in the industry. We’ve got a lot more water issues all over the state. Want to make sure that we expand our I.t. Project while we’re building it so we don’t have to go back. And it costs less when you’re doing it when you build. So we’re going to ask for so we can collect more data and have more information available for everybody.
Rey TreviƱo [00:07:41] You know, the other thing you mentioned a minute ago was about receiving more money for orphan wells, and I think we’ve discussed it before, but, you know, you do have a whole department for orphan wells and ways that you all I guess I’ll just say it like this you’ll give money to other companies to go plug wells year round. And I’m just saying it kind of in an easy lackadaisical way. But can you talk about that real quick? And then I want to follow up with another question about more money.
Christi Craddick [00:08:11] Sure. So orphan wells are important for us to manage. Back in 2000, you and I have talked about this, I think before the state decided to put a fund in place. So we have orphaned abandoned wells, meaning somebody has gone out of business, we can’t find them and we need to clean up. We want to continue to clean up issues and particularly plug these wells. We as an agency today have about 8000 on our books. That number seems to be stagnant. We do plug a lot of wells, but then more come on. And that’s not unusual. Whether it’s small or large operators, just things happen. And so we go out and inspect those wells once they come into our portfolio. And most of these wells are old. And when I say old, more than 20, 30 years old, old, mostly vertical wells, too, and not not many horizontal wells. It’s it’s old stuff. And we didn’t have a bonding program when these wells were were drilled. So we have gone the legislature has been giving us additional dollars. We also use fees from the industry. And today, if the if in the last 20 years we do go get a bond and we use that as an insurance policy as well. So we go inspect those wells, we prioritize them. If they’ve got an environmental problem, they go to the top of the list. If they’re one that we don’t see that could cause an environmental problem or that has a leak, for instance, they’re on the list. And so we go out and have and you mentioned we do have companies who go out and bid like everybody else does in the state. We go out and bid and have contracts and we do what we call a managed contract so we don’t go plug just one. Well, most of the time we go plug, you know, 10 or 12 saves the state a little money, saves everybody a little bit of money because you have to move a rig once on a piece of property, right, instead of moving it all over. So we this last year, we plugged about a thousand wells. That’s been our goal for the last several years. And and so we continue to plug wells and that’s been a that’s an important piece of what we do to try to continue to make sure the environment stays clean.
Rey TreviƱo [00:10:22] Now, with all that being said, you also mention trying to get more trying to receive more money for plugging orphan wells. You know, how much money are you all looking to get from the state and are there any chances that we can actually get some from this inflation reduction?
Christi Craddick [00:10:37] So we have two pots of money today. So I’m going to talk about the. Inflation reduction at first because it’s you know, there’s never an easy federal program. So we we as an agency, when the IJA was being proposed in DC or almost three years and we were asked how many orphan wells we had. And remember, it isn’t just onshore wells. We also have all the abandoned orphan wells that are in the bay. That glow permitted, which today is about 153, and those cost a lot. It’s about $1 million a well is our estimate because you have to build a platform, you have to have specialized crews. So those caught usually cost more than than onshore. So we we said to the federal government, we have about 8000 wells. And our estimate three and a half years ago or three years ago was that it cost us $330 million to plug everything on our books at the time. Okay. Now, obviously, life has moved and we’ve plug some wells, but still we still have about 8000. About two years ago, after the law was passed, states who applied got $25 million in unrestricted dollars, meaning no programmatic. And I say that very specifically in a second.
Rey TreviƱo [00:11:55] Yes
Christi Craddick [00:11:56] I’ll explain why. And we took those dollars and plugged about an additional 730 wells in the state. Then about a year ago, the Department of Interior put out rules about what the next group of money and here becomes the program. Right. So we all agreed as states, I see lots and lots of comments were made. And last August we all agreed that, okay, we can live with these. There aren’t perfect, but we can live with how this program’s going to work and fine. So we as a state were the first state in to apply for four federal dollars under the new program and February 1st, with $78 million, show up at my agency, almost 79 million except and this is where I go back. The federal government’s never easy to work with. And on January 15th, they came back and said, we’re adding some some more. Things that you have to do. So the new three things that we all remember, we’d all agreed. Now we have to go get Native American tribes to agree before we can start a web plugging project, which in Texas we don’t really have relationships with very many of those tribes. So the federal government’s first to help us. Two, we have to go to the historical commission of the state, which they we work well with historical commission, and they have to approve the projects. And three, and everybody, because they’ve been watching your show, understand this. We have to go get us Fish and Wildlife Service to improve our projects. And they have a minimum of 45 days to approve something, which means it’s very slow. So unfortunately, we had 60 projects shovel ready to go. We planned, we were ready to go and we’re off 60%. They are very slow to permit. It’s very onerous to get through the program. And and that’s unfortunate. Look, it’s your tax dollars. It’s mine. It was passed and we’ve talked to the Congress, men and women who passed this and had good intentions. Department of Interior has created a program instead of a pass through. And that was not the intent. But getting Congress to do anything is a challenge. So we are working through that program and trying to use dollars appropriately because it’s my tax dollars in yours. So we ought to use it. One pot of money. Yes. The other part is state dollars. So we got an additional eight years ago, we started getting additional dollars into this agency to plug more wells since we got to about 1000 a year and it’s been roughly 22 to $23 million a year that we’ve gotten. Well costs have gone up. So we have not gone back and asked for an increase in our cost. And and so it’s because we were eight years ago average about $15,000 a well to plug. Today it’s 30 to $45,000. Well, depending on where you are. That’s the average cost. So we need an increase in dollars because of that. But to and everybody reads about them. We’ve had some emergency wells in the state and frankly, you might read about it in one part of the state, but it’s all over. We have emergency issues. We’ve got a lot of drilling going on in the state there. There are issues that are popping up all over. And so we’ve been spending additional dollars not out of the well plugging, but just out of the agency. And so we don’t have any more money. We want to we want to fully fund the program that we need to. And so we’re going to ask for additional dollars. And we really think, look, there’s a lot of rainy day money, which is severance tax dollars. Yes, we ought to have access to some of that to to work and make sure the agency can do its job well in plugging. You know, that’s a long answer to your question.
Rey TreviƱo [00:15:52] Well, no, but I’m glad you were able to put it into two different pots. And let’s go back to the federal dollars. I think it’s hilarious that they literally give you the money and then say, by the way, here’s do.
Christi Craddick [00:16:01] By The way, two weeks out.
Rey TreviƱo [00:16:02] Yeah, two weeks out.
Christi Craddick [00:16:04] And lawyers got involved, if that tells you what happened. Well I mean and I am one, but I think look, Scott.
Rey TreviƱo [00:16:09] You know, I know you mentioned the Native Americans. And in Oklahoma, it’s big and it’s a very big part of it. I know. I remember growing up when my dad was still doing the more software side. And you do a royalty checks. I mean, you would have a thick check stack of checks and all went out to all the native.
Christi Craddick [00:16:28] That’s right.
Rey TreviƱo [00:16:28] And so you work close and close. Right? Right. But here in Texas, I can’t. Now, granted, it’s me. So it’s not like, you know, like I’m taking this to the bank. I can’t think of any place that we’re drilling on Native American land anywhere.
Christi Craddick [00:16:40] We don’t really have that many in Texas. And so it but we have to go back and look at where the historic Native American tribes could have been. So we make sure it’s Native American tribes are really important. There’s no question about this. Yes, it’s back to Washington, DC. One size doesn’t fit all regulations, and that’s where this is. And that doesn’t it’s unfortunate because it doesn’t make a lot of sense. You’re right in Texas, like it wouldn’t Oklahoma or New Mexico, they have more Native American tribes. You ought to be respectful of working with the landowners, the surface owners, which I think we are anyway. But we don’t can’t readily identify a lot of Native American tribes. However, we still have to go through that. The bigger challenge is really us Fish and Wildlife Service, You know, they don’t do anything easy. They’re a big agency, part of an agency, and frankly, they don’t have enough people. And that’s a real challenge for them. And I will say Department of Interior, the woman who’s run it and there’s one woman running the program at this point for the entire country. She’s been very fair to us and trying to work with us. But they need more than one person to run a program. So so we’re working on federal dollars. But that being said, state dollars are still really important to us. We want to. Make sure we have enough dollars to plug appropriately. And emergency wells have become a bigger part of our portfolio than we anticipated a few years ago. So that’s what we’re going to ask for, an additional 74, almost $75 million to put into our well plugging program in the next couple of years to make sure that we can plug not just emergency wells, but that we we can continue to meet those metrics because costs have gone up well.
Rey TreviƱo [00:18:25] Before I move on to the next question, do you see any opposition to that? And.
Christi Craddick [00:18:29] You know, we’ll just see what the legislature decides if everybody’s over asking for money, that’s part of it. But I think we’re probably we hope the industry usually is for our our ask. And I think generally the environmental community wants us to continue to plug wells and landowners as well. So I don’t know that we’ll have opposition. It’s whether they’ve already dedicated dollars someplace else.
Rey TreviƱo [00:18:51] What I want to highlight though, it’s a stay on the orphan oil topic and you say that you I’ve had about 8000 wells a year and it’s been stagnant. I do want to at least highlight that, hey, y’all are plugging about a thousand wells a year. And so and then about more come on to the orphan less every year. So, you know, it’s it’s not stagnant, but it is. I want to say, hey, the program is working. Okay?
Christi Craddick [00:19:16] So remember, we plug a lot of the industry overall plugs, a lot of wells in the state. The industry plugs about 95% of the wells that are plugged in the state. We’ve got a lot of wells in the state. Historically, we’ve drilled about or I should say industries drilled. We’ve permitted about 1.5 million wells, right? So our orphan abandoned well program isn’t is what everybody else in the country and actually Canada aspires to be. So we had a conversation a couple of years ago with the Canadians in Alberta area and I guess during Covid or sometime during Covid, they had 400,000 wells that needed to be plugged up there. That’s a crazy number. I don’t know how you approach it. Right. But so Texas really an industry plugs most of the wells. They’re not orphaned, abandoned, but they need to be plugged in. So I appreciate that that people recognize we need to be plugging wells, we need to plug them appropriately. And at some point, economics or just they’re old, they aren’t going to come back online. So we need to clean up the environment and clean it up.
Rey TreviƱo [00:20:21] You know, let me ask you this. In order to maybe get some of these wells off that orphan list, how do you guys, I guess, award in to incentivize operators to go pick up some of these other leases where maybe there might be one? Good. Well, but it’s but it’s considered a plugging liability. You know, how do you guys you know, there’s some ways to to encourage us to go by and pick up these older leases to not only plug the wells, but then also put wells online? Like, are there some ways that you guys can help us, you know, encourage us to pick those up?
Christi Craddick [00:20:54] Well, the legislatures are coming in, so I think it’s a nice time to try to get some incentives from them. Look for for things like enhanced oil recovery, we do have incentives. We do see companies doing enhanced oil recovery, meaning their use or water or the new thing is CO2. And I say new 20 years old in the state, but everybody sees an opportunity with CO2. That’s what we all want. We want to use to. So we see some of these older wells are being used in enhanced oil recovery, whether it’s water floods or CO2 floods. And look, there’s some opportunity potentially, and we’re hearing conversations about companies plugging wells and getting CO2 credit on the open market. We can’t, as an agency, plug a well and get CO2 credit, but industry can. So I think that’s an opportunity as well. And and if you’ve got good rocks, good rocks mean somebody is going to go pick up those leases, then we have to plug to remediate some stuff and then they go drill or remediate and reopen as well. So I think there’s opportunities. But we do require you as you’re coming in, you can’t just pick one well off a lease. You take the whole.
Rey TreviƱo [00:22:09] Thing, you dig the whole thing, you.
Christi Craddick [00:22:10] Take the whole thing. Because look, it’s you can’t cherry pick. Exactly. We want you if you’re going to take responsibility for that lease and buy it, you know, go leased up the new you get everything so and so we’re willing to have those conversations about and continue conversations about how we keep some of these older wells online because it’s small operators. And and once you plug the well, it’s hard to go back down and find those resources again. And it’s tax dollars and jobs that go away, too.
Rey TreviƱo [00:22:42] You know, and then you mentioned, you know, the small operators, you know, a small operator is somebody that, you know, does probably, what, 200 barrels of oil a day or less.
Christi Craddick [00:22:50] I know that we have I think we’ve got 100 to 200 barrels. That’s probably fair.
Rey TreviƱo [00:22:55] And, you know, so these guys are. Almost one stop shops and they’re probably not only drilling their own wells to some degree, but they’re also reworking the wells themselves. Very hands on. And so having to do all the paperwork on the back end. That’s right. And so I know that, you know, especially in all these smaller communities, you get these almost lease swaps a lot. And so it’s like, well, that’s a floating liability. That’s why I ask you those questions, because for the big companies to go, okay, okay, we’re going to have to set aside this much money, kind of like we were talking about our pre pre meetings. Like I was looking at some leases is like we knew we’re going to have to have these wells close like, okay, so that’s X amount of dollars that we’re never going to get back, so to speak. And I use quotations for all my listeners out there because, you know, that’s that’s money that went down a hole that you don’t get back because obviously the whole point of drilling wells is put money down, the hole in the money comes back up. That’s true. But, you know, just being able to encourage us to do more because there are so many wells like I’ll share this also, I think not only is there 8000 orphan wells, but we have numerous idle wells that each company has on their books. Right. That to me would be one another another thing there. But but anyway.
Christi Craddick [00:24:11] I got 150,000 inactive wells in the state today is what we have what we have listed. So now today, industry has an opportunity to continue to test those wells and and we don’t consider those orphaned or abandoned. They really are on somebodies books and but those some of those wells industry I think is beginning to slowly plug some of those wells to we probably ought to have a more aggressive program at some point. Some of those wells will never come back online and maybe some of them will. I think there’s always opportunity to remediate a well and work and rework it, but at some point it costs more to rework a well than it does to plug it and try and drill and you know.
Rey TreviƱo [00:24:55] Yeah. And I’ve I’ve ran into that and I’m sure other operators have to every now like you go back and look at the billing I think you could have done a new.
Christi Craddick [00:25:04] Well that’s right.
Rey TreviƱo [00:25:06] I want to talk about West Texas. As far as I’m concerned, that is the biggest oil field in the world, right? We’re in Texas. I’m going to say that and I’ll stand by that. And if OPEC was right here, I’d say your second.
Christi Craddick [00:25:16] I think that’s fair. Okay. I think that’s fair.
Rey TreviƱo [00:25:20] But, you know, with as much production right now as we have in America right now, as I like to say, whenever I get the opportunity to do an interview, you know, we’ve opened up the spigots in West Texas. You know, like you we kind of just turn the faucet on a little bit more full blast. We’re not drilling as many wells, but we’re producing more oil right now than we ever have, which is also causing some possibly some issues out there right now. And, you know, that’s something I wanted to talk to you about, is just all the all that’s going on out West, Texas. And first of all, let’s just highlight the good West Texas, what’s going on there. We can talk about some of the negatives that are going on.
Christi Craddick [00:25:55] So you’re so you’re right, West Texas is the most productive. And I say the Permian Basin, the biggest oil field in the world and the most productive, which means there’s a lot going on. And everybody there’s a lot of jobs out there, although you’re right, we’re not drilling the number of wells and don’t have the number of rigs running because industries innovated and gotten smart. And so they need fewer wells because of horizontal wells. And the innovation is now we’re averaging two miles of the horizontal well instead of a mile like we were a few years ago. They’re recycling a lot of water. I joke that we can almost have East Texas and West Texas look the same and have a lot of green out in west Texas with the volume of water that we have in West Texas produced water that’s coming out. But but people are being smarter about what’s going on with water. And we appreciate it. And we think there’s some more opportunity to come that they are looking at what beneficial use looks like, like putting our crops, for instance, as an example besides just recycling it. We’re using it. So so we’re excited about watching industry do some really smart things. And again, I think they’re able to do it because our rules or regulations are consistent. They also can talk to us and say, We’re heading down this road, will you work with us so we can get there? And and we let them test some things too, because we want that innovation. I think that’s how this industry continues to thrive. Yeah, so that’s a real positive. And you’re right, it’s a big with the biggest oil field, you’ve got some challenges. And and so what are the challenges that we deal with? And the industry is dealing with one, seismic issues. And to produce waters of a challenge. I say you’re not in the oil and gas industry. You’re in the fluids industry.
Rey TreviƱo [00:27:41] Amen to that. Yes.
Christi Craddick [00:27:42] And because water is a piece of it, you’ve got and waste, you’ve got to figure out what to do with that with that part, too. So as an agency, look, we put inspectors out any time there’s there’s stuff going on there, they’re in double time, I feel like. And these are good folks that are working to see what the issues may be and where if we can identify where a seismic activity happened. Right. And we’ve worked with industry, we’re working with with Bureau of Economic Geology and Texas Tech has got a water consortium that they’re leading. Everybody’s looking for good solutions to some of these issues. And so and we get landowners involved. I mean, there’s a lot of groups involved that are giving good feedback. I was in both East Texas and West Texas, like I mentioned. And I go ask the smart geologists and engineers that I visit with and say, okay, these are some issues we’ve got going for on water. What do you see? What do you suggest? And and they’re working to to give us some other solutions besides what we’re working through as well. We’ve got great people, my agency, we can always hire a few smart water people to give them some help, by the way. And I don’t know that anybody anticipated, not just today, because it’s not just in West Texas, although that is where we’re all focused today. But we’ve got some challenges all over the state. And like I said, I think industry wants to be a good operator. Landowners want to know what’s going on. And so we’re we as an agency are trying to communicate and have inspectors out there to work with people to figure that out.
Rey TreviƱo [00:29:20] Well, you know, you talk about like everything that’s going on out there, I want to just kind of talk about how you guys and how y’all respond to situations, as you mentioned earlier, that you’ve got you often will find that you’ll know, even use it for emergencies on our phone. Well, it’s right here. In the last couple of weeks ago, there was a big blowout out in west Texas. You know, what did you guys do to like, you know, let’s walk through that. Like you hear about this big blowout. You know, how does the railroad commission spring into action? Because that’s a well, that’s an awful well. So how do you spring it?
Christi Craddick [00:29:53] And actually the blowout well is not an awful well. So we identify so first and foremost we get an inspector on site or whoever from the field. So that would be the Midland Field office from where we’re talking about. And we inspect it. We start identifying who the if we can identify who has ownership of of a well we identified and and the person, the company that drilled that well came in and said we think it’s ours and we would we’re going to work to remediate that. So first and foremost is, you know, you’ve got so much water coming out and that’s what a several of these are. Let’s figure out who can haul water off. Let’s start identifying where the well is. Let’s make sure we know where the the wellbore is and and who are the appropriate people to get companies. We need to go hire people to get involved. So we’re on site most of the time. We’ve had a couple of people from Austin have been out there. I’ve been out in West Texas for almost a month and back and forth just because between managing people and making sure we’re identifying how to resolve some issues, getting real solutions is important. You don’t want to just plug something so it you have a problem. Again, you want to do it right and do it well. And look, not all these wells were plugged. Some of them weren’t plugged. They’re just holes out there that have that water, found a hole, found a place, and it came up. So those are challenges that we’re, again, working through as an agency. We’re in the process of updating our i t and like I said, the last part as you see it, which is underground injection wells, we want to make sure that we as we build that system or saltwater disposal wells, we use it interchangeably for us, right? And we want to make sure that we are gathering more data. So if we see an issue or there or there’s an issue, we can go back and say, all right, this area pressure that because we know that from data that people gave us when they were permitting and continuing to drill the well. So being more proactive, we’re working through that. And also part of that is, is for us, identifying the wells that we need to prioritize to plug now. So we’ve done numbers for a long time now. In the last six months, we really have recognized in our shifting our priority to just straight 1000 wells numbers to saying, all right, we’ve got some environmental challenges in this area. We may have an east to west. Well, that needs we need to prioritize based on environmental risk better than we have in the past and not worry about hitting a thousand wells, although I still want to get there. But let’s prioritize the environmental risks. And so we’re working through some of those reprioritisation and looking how that works. And that’s part of some of this. But we’ve got emergency wells. And so we’ve we’ve already spent $10 million on one this year. And that’s a lot of money for for an agency that, like I said, only has $23 million to spend. So it’s going in and. Legislature’s biggest challenge, I think to understand, for them to understand. We’ve got a lot of water. The poor spaces is full and we’re active in a lot of spots. And nobody anticipated this five years ago. But this is where we are and we need to make sure we’re or addressing the issues in real time.
Rey TreviƱo [00:33:16] The you know. Christie or excuse me. Excuse me. Chair Well, Chairman, I want to ask you this because listening to you and hearing all the things that you are involved in, you’re in another fight again to campaign to do, to go for another to do this again.
Christi Craddick [00:33:36] Right.
Rey TreviƱo [00:33:36] And, you know, you’ve you’ve done this before. Meaning, you know, this is not your first year seeking your first reelection. What is it that just is continues to motivate you to want to do this and only see things grow? Because before I let you answer is like we’ve only seen positive things happen. I again, I do think that the three that are in there have been very instrumental, you know, a lot of positive changes. Yes. As we know behind the scenes, I’ll sit here and I’ll say, hey, here’s what’s going on. I can play good.
Christi Craddick [00:34:10] I want to hear the complaints.
Rey TreviƱo [00:34:11] You I know you do. I know you do. And I share with you. But it’s like, what makes you want to continue to do this again to hear these complaints? Because minor at least halfway decent. You know, I can only imagine other individuals, but it’s like, what? Why? Why is it you want to go again? Why do you want to go on?
Christi Craddick [00:34:26] Thanks. Well, thanks for the question, because, look, I ran for the royal commission, not because of politics, but because I really wanted to get to the agency and make some changes. I t being a big piece, I keep talking about it, but it’s been huge for us. We were hardcopy and in hardcopy filing and you had to come to the library. We’re now we still have a library. That’s all old stuff that we’re basically everything’s digitized or will be. And that’s a big piece for us for, you know, it’s been transformational for this industry for and we’re more transparent and it’s been allowed us to be to do better with fewer people, I think longer term. So so we so that’s been a big piece. But because I think this is a good industry, I think it’s the most important industry and the most important agency in the state. And so. I like the throw because I actually like the people at the agency. We have really good people at the agency. They’re all nice. They’re all trying to do the right thing by the state. They’ll work hard. But I also think this industry is really important when you look at not just where we are in Texas, that it’s a third of the state’s economy and it’s got puts in about $25 billion into the state every year in tax dollars and other dollars. That’s a lot of money. But you’ve also got about 480,000 people who work directly in this industry. And and with an average salary of $125,000, that’s real money in people’s pockets. So you want to make sure that we as an agency don’t mess it up and we continue to allow those jobs to be created and innovation to happen. And in today’s environment with the federal government, you’ve got a group of people who don’t like the oil and gas industry, don’t appreciate it, and would like for it to go away, which is not realistic and not common sense. Hopefully we’re going to change in November. But whether we do or we don’t, you’ve got to have I want to continue to make sure as an agency, I think we need people who’ve been there that we have knowledge about what’s going on, because again, this is a dynamic industry and I think I’ve got some good experience over there. But you also need people who are going to push back and explain why the federal government shouldn’t be and why it should be state regulated, how important this industry is not just to the state. And I’ve mentioned how important it is the state, but we look at nationally and frankly, internationally worship and LNG all over the world. That’s important. National security is important. If Texas is strong in our energy strong, then so is everybody else around the world. And I think that’s really a priority for me to make sure that we continue in Texas to be a leader.
Rey TreviƱo [00:37:10] Well, I just cannot thank you enough. You know, since this is a campaign season, you know, if there’s anything else you’d like to share on on why they should vote for you, please, please let me know. Please give the panel the floor. Just one more.
Christi Craddick [00:37:24] Thing. Look, I think it’s important to get out and vote, number one. So please vote this cycle. I’m number four on the ballot. We’ve made it through a primary and we do have a general election. And and I hope people aren’t apathetic or just stay at home because this is an important election cycle, not just for this race, especially for this race, but across the country where this country goes and the policies that are being created across the war, across the country that’s today. And so, look, I believe in freedom of choice and that we ought to be able to do have a little bit of everything, because we’ve got windmills, too, in this day. I don’t have an issue with that. But natural gas is really and the production of natural gas and moving it all over the world, that’s a priority. We shouldn’t have shut down LNG, terminal permitting. That’s that’s a policy decision that Washington, DC and this administration made without any knowledge of what’s going on. So I look forward to continue educating people about how important this industry is. But also just again, fair, consistent rules and regulations allow Texas to be a leader, and we want to make sure that we have best practices and continue to be highly.
Rey TreviƱo [00:38:39] Well, well, Chairman, and I cannot thank you enough for coming on. Thank you so much for the time. Again, you’ve been all over the state and it’s not done yet. So good luck here for the rest of the campaign and we hope to see you here again later in November.
Christi Craddick [00:38:53] Thank you for having me.
Rey TreviƱo [00:38:54] I’m going to and to all our listeners out there, if you got any questions about what the royal commission does or how they help out every day, please reach out to me if you got any questions on Orphan Wells and how we only continue to plug those, let me know. But as always, I want to thank you all for listening and we’ll see you again on another episode of The Crude Truth.
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