Exxon Mobil and Texas Sabotage

17 07 2009
From: Treehugger.com, 2009

From: Treehugger.com, 2009

Oil companies certainly are good at giving me stories to write about. I found out that recently (March 2009), Exxon won a trail against Emerald Oil & Gas Company. A trial that it probably should not have won. In the late 1980’s. The oil giant had a falling out with the land owners of 121 of their Texas oil wells. When Exxon requested a cut in the 50% royalty rate that the O’Connor family had imposed since the 1950’s, when Exxon Corp. was known as Humble Oil & Refining Co., the family refused and Exxon decided to pack up and leave. Law requires an oild company to plug the wells upon leaving and report on how those wells were plugged so that if any party sees a future opportunity with the wells, they have the ability to tap into them again. When Emerald Oil & Gas made their attempt to tap into 1/3 of the wells in the early 1990’s, they were met with concrete and explosives, prohibiting them from accessing many of the wells. Exxon has been proven responsible for sabotaging their old wells by filling them with concrete, metal, explosives, and toxic waste, as well as leaving damaged metal casings in the wells.

So, Exxon won the most recent case at the supreme Court in Texas (ruled by Justice Dale Wainwright) on the basis that Emerald Oil filed the case too late. While Emerald argued the the case should have begun when Exxon finally revealed the documents disclosing the method for plugging the wells (a false disclosure), the supreme court ruled that the clock started ticking when Emerald discovered that the wells had been sabotaged, meaning that they were 2 months late filing the case. So this really gets me…the court knows that Exxon has sabotaged the wells, but they toss out the case because it is 2 whole months late. This is absurd.

The case is not yet dead though. According to Bloomberg, Jerry Patterson, the commissioner of the land office that oversees oil leases that help fund Texas schools, has asked the Texas Railroad Commission to conduct hearings into the matter. Exxon could be fined for not accurately describing what was used to plug the wells, thereby making it far more difficult for Emerald to access the wells than they would have been lead to believe.

“Under Railroad Commission rules, Exxon Mobil could face fines of $10,000 a day per well, Patterson said in the statement, which he plans to release on July 20. He said those penalties could add up to more than $1 billion on wells the company abandoned in 1991 after a disagreement over royalties with the owners, the O’Connor family, a Texas oil dynasty.”

Exxon’s response:

“The allegations paint a false and misleading picture of Exxon Mobil’s involvement in the O’Connor oil and gas leases… The area in which the wells are located has a water table very close to the surface. It was critical that Exxon protect the groundwater by plugging the wells solidly and thoroughly.”

I’m SURE Exxon must have been putting explosives in their wells to protect the groundwater. I bet if they blew up their oil tankers in our harbours it would be a great benefit to our health too. Maybe, we can substitute oil for water as a healthy alternative beverage even? Give it up Exxon. As it turns out, $1 billion in fines is about 2% of the company’s total net income last year. They reportedly have about $25 billion in cash and cash equivalents just tucked away in reserve. I don’t know why they fight these things and drag them out so long. If they just paid the costs right away, the process wouldn’t drag on so long and maybe they wouldn’t have such negative PR.

 The Railroad Commission hasn’t yet decided whether or not they will fine the oil company. the three commissioners that would hold hearings are to meet on July 21st. Once again, I hope Exxon gets what it deserves.

Bloomberg Article: http://www.bloomberg.com/apps/news?pid=20601130&sid=apaHKiMnL4Qk

Austin American Statesman Article: http://www.statesman.com/news/content/news/stories/local/03/28/0328exxon.html

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