Texas spent $7M to plug a toxic well. Now it’s demanding a Houston company foot the bill.

In September 2024, the Texas Railroad Commission spent an eye-popping $6.95 million to plug a toxic well in Ward County.

The price is so high — about 230 times the amount needed to plug a typical well — that it has become emblematic of the financial pressure the commission faces as it tries to contain wells that have been leaking for decades.

Now, the commission is trying to recoup those funds from a prominent Houston wastewater operator that it says was responsible for the blowout. WaterBridge, which launched a high-profile initial public offering last year, denies responsibility and plans to challenge the findings at a hearing.

The looming legal battle will be a test for both the commission and the oil and gas industry it regulates, as tensions mount over who is responsible for a series of oil well spills in Texas.

“This case is unprecedented,” Mizubashi’s attorneys wrote in response to the commission’s enforcement proceedings.

Search map: There are 500 potential “zombie” wells in Texas. This map shows where they are most likely to contaminate.

The company said the case was unusual because WaterBridge’s disposal wells were properly licensed and were operating within the boundaries of those licenses. However, the commission held WaterBridge responsible for a blowout in a 1950s-era well a half-mile away that was not plugged to modern standards.

Hundreds of thousands of decades-old wells dot the landscape of Texas, miles deep that can provide a pathway for industrial wastewater to rise to the surface, contaminating groundwater along the way. A recent analysis by the Houston Chronicle found that 2,700 wells in Texas are at high risk for leaks.

WaterBridge said the commission failed to prove its wastewater was liquid from a blowout well in Ward County and contaminated groundwater. It also rejected the commission’s use of pressure data to link its disposal wells to flowing wells. It noted three other disposal wells within a two-mile radius that may have triggered the incident.

Shortly after the incident, the commission canceled the permit for the Waterbridge treatment well, which is no longer operational. A hearing on the matter has not yet been scheduled.

A spokesman for the commission declined to comment, noting that it does not comment on pending cases. The commission’s evidence in the case has not yet been made public.

The state’s leaky well problem isn’t easy to fix. Oil companies no longer have a safe place to discharge wastewater. The Permian Basin is one of the most oil-producing regions in the world, but it actually produces far more dirty water than oil—about three barrels of water for every barrel of oil on average. That’s because the fracking process releases large amounts of benzene brine in shale that has been trapped alongside oil and natural gas for thousands of years.