The bipartisan infrastructure bill signed into law by President Biden in November contains $4.7 billion in federal funds to be distributed to the states for the restoration and plugging of orphaned wells. With recent guidance on state applications for these grants released, and disbursements of funds to begin soon, the Council is actively working to partner with state offices and ensure that Council Member Companies are well positioned to benefit from this opportunity.
The REGROW Act provides a mechanism through which funds would be distributed to already existing state orphaned well plugging programs, which are subject to minimal federal requirements. These states would then use the funds to contract with local companies to perform the work. The Council has advocated for such a program in Congress and is looking forward to seeing the funds distributed to participating states.
In guidance to the states released December 17, the Department of Interior indicated the three types of grants available for applications. Initial Grants have a May 15, 2022, deadline and Formula Grants were due by December 30. Most states have submitted a notice of intent to apply for grants of up to $25 million of initial funding, including Texas, Pennsylvania, California, Colorado, New Mexico and others.
The department released a memo in early January indicating there are more than 130,000 documented orphaned wells – more than twice the amount previously estimated by the Interstate Oil and Gas Compact Commission. The White House and Interior Secretary Deb Haaland have prioritized the issue since her nomination, given its impact on surrounding communities.
Plugging orphaned wells benefits states in several ways as companies seek to hire additional oil and gas workers, and it eliminates emissions from escaping the wells. Given the expertise within the oilfield services sector, Council Members are well suited to bid on these projects.
The Council, led by the Well Servicing Committee, is forming a working group to draft best practices on plugging orphaned wells for the sector. This document will be shared with participating states and will aim to ensure that work around the country is done according to industry best practices by legitimate companies. If you are interested in contributing to this work, please contact Director Government Affairs Deidre Kohlrus.
Most recently, the Department of Interior’s Bureau of Land Management held a roundtable webinar presenting an overview of the implementation plan for the identification and remediation of orphaned wells on federal lands. Council Member Randy Pacheco, CEO, A-Plus Well Service, participated as a panelist and discussed issues facing the workforce needed for these projects. Pacheco has been a long time leader in the work of plugging orphaned wells.
Maria Suarez, Director Government Affairs, writes about industry-specific policies for the Energy Workforce & Technology Council. Click here to subscribe to the Council’s newsletter, which highlights sector-specific issues, best practices, Council activities and more.