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MEMORANDUM
TO: Interested Parties
DATE: January 5, 2022
RE: Overwhelming Interest in Orphan Well Infrastructure Investments
I. INTRODUCTION
The Interior Department is committed to helping working families, often in rural and Tribal communities, who face hazardous pollution, toxic water levels, and land subsidence both during and long after energy companies have moved on.
The Bipartisan Infrastructure Law’s historic investments will help revitalize these local economies and support jobs, while addressing environmental impacts from these legacy developments. The law includes $4.7 billion for orphaned well site plugging, remediation, and restoration activities. These legacy pollution clean-up efforts will advance the Department’s goals of environmental justice by helping historically marginalized communities address the devastating and long-lasting effects of legacy pollution.
Millions of Americans live within a mile of the tens of thousands of abandoned mines and oil and gas wells. Secretary Haaland recently visited the Los Angeles area in California, which has one of the highest concentration of wells in the country, where she viewed idle and orphaned well sites. Her visit spotlighted the impact that legacy pollution is having on communities of color and in poor communities throughout the region.
Plugging orphaned wells will help advance the goals of the U.S. Methane Emissions Reduction Action Plan, as well as the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, which focus on cutting pollution from the largest sources of methane emissions in the United States.
II. CLEANING UP LEGACY POLLUTION, ADVANCING ENVIRONMENTAL JUSTICE
On December 17, 2021, the Department of the Interior released initial guidance for states interested in applying for federal grants to fund the proper closure and cleanup of orphaned oil and gas wells and well sites, a key investment of the Bipartisan Infrastructure Law.
The guidance outlined eligible activities that states may use grant funding for, including plugging wells, remediating and reclaiming lands impacted by oil and gas development activities, and removing infrastructure associated with the wells. It also included information on how states can apply for grant opportunities, and timelines for implementing the programs.
States had until December 30, 2021, to notify the Department of interest in applying for a formula grant, one of three funding opportunities to address orphaned wells made possible through the law.
III. STATE INTEREST IN INFRASTRUCTURE LAW GRANT FUNDING
Twenty-six states submitted a Notice of Intent (NOI) indicating interest in applying for a formula grant. These represent nearly every state with documented orphaned wells.
States that indicated interest in additional formula grant funding include Alabama; Alaska; Arizona; Arkansas; California; Colorado; Illinois; Indiana; Kansas; Kentucky; Louisiana; Michigan; Mississippi; Missouri; Montana; Nebraska; New Mexico; New York; North Dakota; Ohio; Oklahoma; Pennsylvania; Texas; Utah; West Virginia; and Wyoming.
A preliminary analysis from the NOI process indicates that there are over 130,000 documented orphaned wells in the United States — nearly two-and-a-half times the amount previously estimated.
IV. NEXT STEPS FOR GRANT FUNDING PROCESS
As directed by the Bipartisan Infrastructure Law, the Interior Department will publish the amount of formula grant funding that each state will be entitled to apply for, as well as detailed application guidance, in the coming weeks. States are also able to apply at any time for an initial grant of up to $25 million to begin building out their plugging programs and remediating high-priority wells. Further instructions on applying for performance grants, the third type of state grant programs set up in the law, will be released later this year.
Those who are interested in learning more about a specific state’s NOI information should contact the state’s designated oil and gas commissioner.
On Thursday, January 6, the Bureau of Land Management will host a roundtable-style webinar focusing on an overview of the federal orphaned well program and the bureau’s overall implementation plan. The roundtable format will incorporate a variety of perspectives and cover a range of topics for discussion, including priorities, well sites, and coordination with states, industry, and Tribal grant programs.
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