US Interior Department Offers Funding for Orphan Well Cleanup

The US government has made more than $1 billion available to qualified states. The program is part of the recently passed infrastructure law.

Texas and Pennsylvania were eligible for the most Phase One funding in the Biden administration's orphan well cleanup effort.

The US Department of the Interior (DOI) has made $1.15 billion in funding available to states to create jobs cleaning up orphaned oil and gas wells across the country. The funds come from the $4.7-billion allocation in the Biden administration’s Bipartisan Infrastructure Law aimed at creating a new federal program to address orphan wells as part of a broad effort to reduce US climate warming emissions and improve health and safety in communities near these wells.

DOI added that plugging orphaned wells will also help advance the goals of the US Methane Emissions Reduction Action Plan, as well as the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, which focuses on spurring economic revitalization in the hard-hit energy communities.

“President Biden’s Bipartisan Infrastructure Law is enabling us to confront the legacy pollution and longstanding environmental injustices that for too long have plagued underrepresented communities,” said Interior Secretary Deb Haaland. “We must act with urgency to address the more than 100,000 documented orphaned wells across the country and leave no community behind. This is good for our climate, for the health of our communities, and for American workers.”

Nearly every state with documented orphaned wells submitted a Notice of Intent (NOI) indicating interest in applying for a formula grant to fund the proper closure and cleanup of orphaned wells and wellsites.

The DOI today released the amount of funding that states are eligible to apply for in Phase One, which includes up to $25 million in Initial Grant funding and a quarter of the total Formula Grant money available for the 26 states that submitted NOIs. The allocations were determined using the data provided by states from the NOIs and equally considers the following factors required by the Bipartisan Infrastructure Law: job losses in each state from March 2020 through November 2021; the number of documented orphaned oil and gas wells in each state; and the estimated cost of cleaning up orphaned wells in each state.

Texas and Pennsylvania are eligible for the most funding of $107.5 million and $104.2 million, respectively. Rounding out the top five eligible states for Phase One funding are Ohio ($84.9 million), Oklahoma ($78.2 million), and California ($61.5 million).

“The Department is taking a thoughtful and methodical approach to implementing the orphaned oil and gas well program that aims to get money to states as quickly as possible while being responsible stewards of taxpayer dollars. We are committed to ensuring states receive investments equitably and based on data-driven needs,” added Secretary Haaland.

DOI is expected to release detailed guidance for states to apply for the Initial Grants in the coming weeks. The resources will allow state officials to begin building out their plugging programs, remediating high-priority wells, and collecting additional data regarding the number of orphaned wells in their states. Improvements in the state data, combined with more accurate Bureau of Labor Statistics job loss data that will be released in upcoming months, will allow DOI to ensure that the final Formula Grant funding for states is based on the best information available.