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Louisiana to receive funding to address orphan wells through Bipartisan Infrastructure Bill

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Posted at 2:01 PM, Jan 31, 2022

The Department of the Interior on Monday announced $1.15 billion in funding is available to states from the Bipartisan Infrastructure Law to create jobs cleaning up orphaned oil and gas wells across the country.

According to the department, this is a key initiative of President Biden's Bipartisan Infrastructure Law, which allocated a total of $4.7 billion to create a new federal program to address orphan wells. Millions of Americans across the country live within a mile of an orphaned oil and gas well.

They say orphaned wells across the country are polluting backyards, recreation areas, and public spaces across the country.

"President Biden's Bipartisan Infrastructure Law is enabling us to confront the legacy pollution and long-standing environmental injustices that for too long have plagued underrepresented communities," said Secretary Deb Haaland. "We must act with urgency to address the more than one hundred thousand 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."

They say plugging orphaned wells will also 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 focuses on spurring economic revitalization in the hard-hit energy communities.

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 well sites. That includes the state of Louisiana. See the numbers here

The Department 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. These 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.

"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.

The U.S. Department of the Interior (DOI) will allocate to Louisiana $47,396,249 in Phase One formula funding and initial grants to plug and restore orphaned oil and gas wells. Louisiana is expected to receive a total of $111,449,520 in funding from the IIJA for orphan wells.

According to Senator Bill Cassidy, Louisiana could also be eligible to receive further funding through the bipartisan infrastructure bill’s $1.5 billion state Performance Grant program.

“I’ve heard from communities across Louisiana about the environmental and safety hazards of orphan wells,” Cassidy said. “This funding from the Bipartisan Infrastructure Package will create jobs, help state officials address these wells and make Louisiana a cleaner place to live. In addition, the land around these wells can be repurposed and lead to an economic boost.”

In the coming weeks, the Department will release detailed guidance for states to apply for the Initial Grants.

These resources, the department says, 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 the Department to ensure that the final formula funding for states is based on the best information available.

Application guidance will also be released in the coming months for states to access the Formula Grant funding they are eligible for, followed by further instructions to apply for the $1.5 billion in state Performance Grants, the third type of state grant program set up in the Bipartisan Infrastructure Law. The Tribal orphaned well grant program, a $150 million component of the broader orphaned well program, is being informed by ongoing Tribal consultations and listening sessions. The law also provides for a separate $250 million program for remediation of orphan wells on federal land, which will be implemented through Interior's Bureau of Land Management.

In 2021, retired Lieutenant General Russel Honoré called on oil and gas companies to do more when it comes to thousands of orphaned wells.

Speaking with KATC in October, The Department of Natural Resources says that since 1993, they have plugged, or removed more than 3,000 wells, no longer being used, through the state's oilfield site restoration program.

Honoré says he is asking the state to change laws that prevent oil companies from cleaning and plugging the wells themselves. DNR says they are continuing to work as quickly as possible to fill in the orphaned wells. See that story here

Last year in May, several people were injured while trying to cap an abandoned well in St. Mary Parish.

Texas Petroleum Investment Company said contractors were working to cap a well in the Belle Isle Field in St. Mary Parish and were injured when a spark ignited natural gas. The incident began while workers were trying to plug the abandoned well, the company said. See that story here

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