Interior Department making $1.5B available to plug nation’s orphaned oil wells, seeking public comment

The U.S. Department of the Interior (DOI) is announcing the availability of $1.5 billion for states to clean up orphaned oil and gas wells across the country. Building on nearly $2 billion already invested, the DOI anticipates the influx of funds will spur economic growth, prevent harmful methane leaks and remediate environmental and public health risks associated with unsafe surface and groundwater. 

Funded through the $4.7 billion Bipartisan Infrastructure Law (BIL) investment in orphaned wells, the DOI will make up to $40 million in grants available to states looking to tackle legacy pollution through the DOI’s Orphaned Well Program Office (OWPO).  

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The OWPO will administer these regulatory improvement grants for states to plug, remediate and reclaim orphaned well sites on state-owned or private land, measure and track greenhouse gas emissions at well sites and identify and address adverse human or environmental effects related to orphaned wells in disadvantaged communities. 

This announcement also marks the start of a public comment period for the OWPO’s Draft State Regulatory Improvement Grants Guidance, inviting feedback on the program’s draft guidance for this grant installment. Funded through the BIL, the OWPO’s draft guidance outlines the DOI’s investments in orphaned well projects. Public comment will play a vital role in shaping the program’s funding allocations and future investment opportunities. 

Orphaned wells, which are abandoned and no longer in use, present significant health and environmental risks. They contribute to air and water pollution, leaking toxic substances, contaminating drinking water sources and releasing potent greenhouse gases like methane. Supporting 2021’s U.S. Methane Emissions Reduction Action Plan, the proposed OWPO grants will plug these orphaned wells and further climate action around the country. 

States can apply for three types of OWPO grants for orphaned well cleanup: initial, formula and performance grants. Of the total funding, approximately $1.5 billion is designated for performance grants, which include both Matching Grants and Regulatory Improvement Grants. 

The two categories of Regulatory Improvement Grants announced are: 

• Plugging Standards Grants: Up to $20 million to encourage states to implement effective standards and procedures for well plugging. 

• Program Improvement Grants: Up to $20 million for states to enhance their programs designed to reduce future orphaned well burdens. 

States may use one or both Regulatory Improvement Grants to accomplish one or more of the following orphaned well initiatives: 

• Plug, remediate and reclaim orphaned wells on state-owned and private land. 

• Identify and characterize undocumented orphaned wells. 

• Rank orphaned wells based on public health and safety, potential environmental harm and land use factors. 

• Measure and track greenhouse gas emissions from orphaned well sites along with surface and groundwater contamination. 

• Remediate contaminated soil and restore native species habitats that have been affected by orphaned wells and related infrastructure. 

• Remediate orphaned well-adjacent land and decommission associated infrastructure. 

• Identify and address any adverse human health or environmental effects of orphaned wells in disadvantaged communities. 

This round of OWPO grants will also support up to 10% administrative costs associated with projects, including posting appropriate signage on orphaned and decommissioned well sites to improve transparency. 

Through the BIL, the DOI has been allocated $4.7 billion to address orphaned oil and gas well plugging. Before this announcement, the OWPO had awarded nearly $1.1 billion in grants to 25 states for cleanup and plugging initiatives. Using these funds, states have already plugged more than 8,800 wells through program investments. 

In addition to supporting the U.S. Methane Emissions Reduction Action Plan, investments through the OWPO align with the Justice40 Initiative, which ensures that 40% of federal investments will benefit disadvantaged communities. So far, 44% of the orphaned well plugging projects have been in such communities. 

Comments on the draft guidance can be submitted via email to orphanedwells@ios.doi.gov by Nov. 12. Feedback from the public will play a crucial role in shaping the program’s future and its impact on communities nationwide. 

Government Market News has previously covered the DOI, OWPO and orphaned well investments in the past. Most recently in August, the DOI announced $775 million in grants for 21 states to address legacy pollution and cap oil and gas wells. 

Photo courtesy National Institute for Occupational Safety and Health (NIOSH) from USA, Public domain, via Wikimedia Commons