US Unveils $1.15 Billion for Abandoned Oil and Gas Well Clean-up

Monday, January 31, 2022

The Biden administration on Monday said it would make $1.15 billion available to states to clean up abandoned oil and gas wells as part of a broad effort to reduce U.S. climate warming emissions and improve health and safety in nearby communities.

The money represents a portion of the $4.7 billion for well clean-up that was included in the infrastructure law passed in Congress last year. The program is a pillar of U.S. President Joe Biden's pledge that fighting climate change will create jobs and revitalize neighborhoods harmed by aging fossil fuel infrastructure.

The White House said 26 states were eligible to apply for the funding, or nearly every state that has documented orphaned wells, defined as wells with an owner that is either unknown or insolvent.

In a statement, the Department of Interior, which is overseeing the program, said each state would be allocated an initial $25 million grant, and additional funding based on its number of documented oil and gas wells, the estimated cost for plugging wells there, and the number of job losses sustained between March of 2020 and November of 2021.

Texas and Pennsylvania are eligible for the most funding of $107.5 million and $104.2 million, respectively, Interior said.

The number of abandoned wells in the United States has grown over the last decade, and many experts believe the number will keep growing as fossil fuels are replaced by cleaner forms of energy.

Earlier this month Interior said it had found more than 130,000 documented orphaned wells in the United States - far more than a widely-cited report by the Interstate Oil & Gas Compact Commission from 2019.

The abandoned well funding is one of several federal efforts the White House laid out on Monday that are aimed at reducing emissions of methane, a potent greenhouse gas. They include a Department of Transportation initiative to require pipeline operators to reduce methane emissions across their systems, and a Department of Energy program to offer technical assistance to well plugging efforts.

(Reuters - Reporting by Nichola Groom and Jeff Mason; Editing by Marguerita Choy)

Categories: North America Decommissioning Plugging and Abandonment

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