The Playbook: Offloading Old Polluting OIl Wells Onto Taxpayers For Fun And Profit While Hiding Behind Shell Companies
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But those tasked with addressing the reality of the country’s orphan wells disagree. “We have a welfare system for oil and gas. I hope you understand that,” said New Mexico Commissioner of Public Lands Stephanie Garcia Richard, who oversees the state’s public lands. New Mexico has already documented more than 1,700 orphan wells across the state. “We have oil and gas welfare queens.” In New Mexico, Garcia Richard is trying to hold accountable one of the myriad drillers that have followed key steps in the playbook, the oil company known as Siana.
Siana is made up of two related entities — Siana Oil and Gas Co. LLC and Siana Operating LLC — based in Midland and Conroe, Texas. The company operated 11 wells in southeastern New Mexico in the heart of the Permian Basin. In reality, Siana is the corporate shield for a man named Tom Ragsdale. After he aggregated his few wells, he generated cash through a trickle of oil and gas production and set up a business injecting other companies’ wastewater into his wells to dispose of it. But the state worried that Ragsdale’s operations were polluting the environment and that he was refusing to pay royalties and rental fees he owed the state, according to State Land Office staff. Ragsdale did not respond to repeated requests for comment from ProPublica and Capital & Main. He also did not appear for a pretrial conference after the state brought legal action against Siana, court records show, and a state court judge ruled against his companies.
Siana was responsible for at least 16 spills, according to New Mexico Oil Conservation Division data, mainly spilling what’s called produced water, a briny wastewater that comes to the surface alongside oil and gas. “Corrosion” and “Equipment Failure” were among the causes. The State Land Office hired an engineering firm to study the damage. The firm produced a damning 201-page report in 2018, finding oil and salt contamination exceeding state limits at Siana’s most polluted site. At high enough levels, these substances can kill plants, harm wildlife and impact human health. The State Land Office estimated that cleaning up that site alone would cost about $1 million. In 2020, New Mexico won a judgment against Ragsdale’s companies that, with interest, is now worth more than $3.5 million. But it won’t cover the cleanup cost. Between a small bond and the judgment, the state has been able to recover a mere $50,000 or so from Siana and related entities.
When the state tried to collect the rest, Ragsdale placed Siana Oil and Gas in bankruptcy protection in June 2023. Although he listed the company as having millions in assets at the time of the bankruptcy, the company had only $20,500 in a bank account. Court records show Siana is responsible for between $1 million and $10 million in liabilities, including money owed to the state of New Mexico, other oil companies, various counties and others. Stickers plastered around Siana’s drill sites — on which the company’s name is misspelled — provide phone numbers to call in case of leaks or other emergencies. None went to Ragsdale or Siana employees. A man named William Dean answered one number. He owned a local oil field services company called Dean’s Pumping that was contracted to work on Siana’s wells, but Ragsdale stopped paying its bills, ultimately owing his company tens of thousands of dollars, Dean said. “He was trying to half-ass things,” Dean said of Ragsdale. “I don’t know what happened to Tom.”
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https://www.propublica.org/article/oil-orphan-wells-cleanup-playbook-siana-tom-ragsdale
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