Shocker: Exxon Mobil Violates the Law

Posted by Steven D. at 10:48 AM on August 19, 2009.

I'm positively shocked, shocked I tell you! I'm sure the following allegations of criminal activity by one of the largest multinational companies in the world are completely unfounded:

AUSTIN — Texas Land Commissioner Jerry Patterson called on the state's powerful oil regulatory agency Tuesday to open hearings into allegations that Irving-based Exxon Mobil Corp. improperly plugged and sabotaged oil wells in a South Texas county after failed negotiations to reduce royalty payments.

Patterson said the alleged violations could possibly result in more than $1 billion in administrative fees to the state from the nation's largest oil company. But Exxon Mobil said in a statement that the Republican official’s allegations are "groundless" and "paint a false and misleading picture" of its involvement in the Refugio County wells.

And here I thought Exxon Mobil had all Texas Republican politicians in their vest pocket. Wonder why Mr. Jerry Patterson decided to go against the flow? Oh, wait, here's a possible explanation. There's other rich folks involved. Well bust my britches if this doesn't read like an episode from Dallas (link to the show provided for our younger members at the Trib):

The case stems from a legal dispute between Exxon Mobil and the O’Connor family, a South Texas dynasty whose roots date to the Texas Republic. The family owns thousands of acres of oil-rich land in Refugio County.

In the early 1950s, Humble Oil and Refining Co., an Exxon Mobil predecessor, negotiated an oil lease with the family, ultimately drilling 121 wells that produced at least 15 million barrels of oil and more than 65 billion cubic feet of gas, resulting in royalty payments of at least $43 million, according to court documents.

But in the early 1970s, Exxon Mobil sought to negotiate a lower royalty because the profitability was declining. After the negotiations failed, the family entered into another lease with a company now known as Emerald Oil & Gas.

The family alleges that when Emerald attempted to reopen the abandoned wells, workers discovered that the well bores had been plugged and sabotaged with oilfield junk such as cut well casings and contaminated oil tank sludge. The family also alleged that Exxon Mobil sought to cover up the sabotage with misleading reports filed with the Railroad Commission.

Emerald and the royalty owners filed suit in 1996, accusing Exxon Mobil of intentionally sabotaging the field. A trial court ordered Exxon Mobil to pay $18.6 million to the plaintiffs. That ruling was upheld by an appeals court, but the Texas Supreme Court overturned the rulings in what Patterson called a statute of limitations technicality, effectively saying the O’Connor family had waited too long to file its grievances.

I knew somehow this wasn't being done by Mr. Patterson in the public interest. We all know how Republicans hate public anything, now don't we? But private interests? That's a whole 'nother shootin' match. This sounds like legalized extortion to me by the O'Connor family. Pay us what we want and we'll call off our dog (that's you Mr. Patterson). Of course, I could have this all wrong.

Nah.

Tagged as: environment, corporations, exxon mobil