State Orphaned Wells Program

The Bipartisan Infrastructure Law creates three types of grants for the state program:

In general, a state may use funding for any of the following purposes:

  1. To plug, remediate, reclaim orphaned wells located on state and private land.
  2. To identify and characterize undocumented orphaned wells on state and private land.
  3. To rank orphaned wells based on factors including the following priorities:
    • Public health and safety,
    • Potential environmental harm and
    • Other land-use priorities.
  4. To make information regarding the use of funds received under this program available on a public website.
  5. To measure and track—
    • emissions of methane and other gases associated with orphaned wells and
    • contamination of groundwater or surface water associated with orphaned wells.
  6. To remediate soil and restore native species habitat that has been degraded due to the presence of orphaned wells and associated pipelines, facilities and infrastructure. 
  7. To remediate land adjacent to orphaned wells and decommission or remove associated pipelines, facilities and infrastructure.   
  8. To identify and address any disproportionate burden of adverse human health or environmental effects of orphaned wells on communities of color, low-income communities and Tribal and indigenous communities.
  9. To administer a program to carry out any activities described above.

A state may not use more than 10% of the funds received during a fiscal year for administrative costs, with the exception of the small-scale Initial Grant.

Initial State Grants

Each state may receive a large-scale Initial State Grant up to $25 million if the state submits a request for funding to the Department of the Interior by 5/13/2022.

This request must include:

  1. A certification that (templates are provided at the end of the Initial Grant guidance document)
    • the state is a member state or associate member state of the Interstate Oil and Gas Compact Commission;
    • there are one or more documented orphaned wells located in the state; and
    • the state will use not less than 90% of the funding requested under this subsection to issue new contracts, amend existing contracts, or issue grants for plugging, remediation, and reclamation work not later than 90 days after the date of receipt of the funds.

Rather than the large-scale Initial Grant above, a state may request up to $5 million if the following requirements are met:

  1. Requests funding under this provision,
  2. Does not receive a grant under the larger Initial Grant above, and
  3. Certifies to the Secretary of the Interior that the state
    • has in effect a plugging, remediation, and reclamation program for orphaned wells; or
    • has the capacity to initiate such a program; or
    • the funds will be used to carry out any administrative actions necessary to develop an application for a formula grant or a performance grant.

Distribution

Subject to the availability of appropriations, the Secretary shall distribute Initial Grant funds no later than 30 days after the date on which the State submits to the Secretary the certification required for the large-scale Initial Grant (up to $25 million) or the small-scale Initial Grant (up to $5million).

Deadline for Expenditure

A state that receives Initial Grant funds shall reimburse the Secretary in an amount equal to the amount of the funds that remain unobligated on the date that is one year after the date of receipt of the funds (12 months after the effective date of the grant).

Reporting

Not later than 15 months after the date on which a state receives Initial Grant funds, the state shall submit to the Secretary a report that describes the means by which the state used the funds in accordance with the certification submitted by the state for the large-scale or small-scale Initial Grant. This is in addition to quarterly financial and performance reports required throughout the life of the grant.

Additional detail on the application process and reporting requirements are provided in the Initial Grant Guidance document. If there is any discrepancy between the content of this website and the Initial Grant guidance document, the Grant guidance document prevails.

Resources

Formula Grants

The Bipartisan Infrastructure Law appropriates $2 billion to fund Formula Grants under the Orphaned Wells Program. Formula grants are available for various activities when the surface is owned by the state or by a private party, including, potentially, individually owned Indian properties that are held in trust by the Secretary of the Interior but fall under the state definition of ‘orphaned wells on private land’ for purposes of compliance with this section only. Funds may not be used for activities where the surface is owned by the United States or by an Indian Tribe but may be used for federal wells where the surface is owned by the state or by a private party and appropriate agreements are in place with the federal mineral manager, which has determined the well to be orphaned.

Section 40601(c)(4)(A) allows states to apply for a Formula grant up to state’s eligible amount as determined by the Department of the Interior in accordance with Section 40601(C)(4)(A)(iv) and published by the Department on January 31, 2022, or as revised in a subsequent Department publication of Formula eligibility.

As provided under Section 40601(c)(2), a state may use Formula Grant funds to:

  • plug, remediate, and reclaim orphaned wells located on State-owned or privately-owned land;
  • identify and characterize undocumented orphaned wells on State and private land;
  • rank orphaned wells based on factors including public health and safety, potential environmental harm, and other land use priorities;
  • make information regarding the use of funds received available on a public website;
  • measure and track –
    • emissions of methane and other gases associated with orphaned wells; and    
    • contamination of groundwater or surface water associated with orphaned wells;
  • remediate soil and restore native species habitat that has been degraded due to the presence of orphaned wells and associated pipelines, facilities, and infrastructure;
  • remediate land adjacent to orphaned wells and decommission or remove associated pipelines, facilities, and infrastructure;
  • identify and address any disproportionate burden of adverse human health or environmental effects of orphaned wells on disadvantaged communities, including communities of color, low-income communities, and Tribal and indigenous communities; and
  • administer the program of work identified in its grant agreement.

Additional detail on the application process and reporting requirements are provided in the Formula Grant Guidance document. If there is any discrepancy between the content of this website and the guidance document, the guidance document prevails.

Resources

Performance Grants

$1.5 billion is appropriated for Performance Grants in the Bipartisan Infrastructure Law.  Like Formula Grants, Performance Grants may be used on State and private land for the activities specified in Section 40601(c)(2) of the Bipartisan Infrastructure Law.

There are two categories of Performance Grants: Matching Grants and Regulatory Improvement Grants.  Subject to appropriations and other criteria, a State may be awarded and spend up to $30 and $40 million in Matching Grant and Regulatory Improvement Grant funds, respectively.

Under Section 40601(c)(5)(F), a State may receive a Matching Grant equal to “the amount that the State certifies to the Secretary the State will expend, during the fiscal year in which the State will receive the grant” less “the average annual amount expended by the State during the period of fiscal years 2010 through 2019.”  A State may receive more than one Matching Grant.

Under Section 40601(c)(5)(E), a State may receive up to two Regulatory Improvement Grants.  A State may receive a Regulatory Improvement Grant if, during the 10-year period ending on the date on which the State submits its application, the State demonstrates that it did either of the following:

  • Strengthened plugging standards and procedures designed to ensure that wells located in the State are plugged in an effective manner that protects groundwater and other natural resources, public health and safety, and the environment; or 
  • Made improvements to State programs designed to reduce future orphaned well burdens, such as financial assurance reform, alternative funding mechanisms for orphaned well programs, and reforms to programs relating to well transfer or temporary abandonment.

A State may receive up to $20 million for each of the above two criteria, and a State may receive only one grant for each criteria.

Additional guidance regarding the application process and reporting requirements will be provided.  If there is a discrepancy between the content of this website and the guidance, the guidance document prevails.

Resources

 

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