Federal government seeks input on how to spend $250 million to clean up abandoned oil wells

Federal regulators are looking for ways to spend $250 million earmarked for cleaning up abandoned oil wells throughout the U.S. funded by the recent infrastructure bill passed by Congress and signed into law by President Joe Biden.

The program to distribute the federal dollars to states for cleaning up the wells was planned to be enacted by Jan. 14, 2022 and the U.S. Bureau of Land Management schedule an online webinar to present its proposal and receive public input for 12:30 p.m. on Jan. 6, 2022 via Zoom.

In its announcement of the program, the BLM argued plugging abandoned wells, also known as “orphaned” wells, must be prioritized to protect public health and the environment as the facilities when left unmonitored can leak air- and water-polluting chemicals.

“The orphaned well program will work to identify orphaned wells and associated infrastructure on federal land and then plug, remediate, and reclaim these wells and the surrounding land,” read the announcement.

“Orphaned wells will be prioritized by public health and safety; potential environmental harm; and other subsurface impacts or land use priorities.”

In New Mexico, state regulators estimated there were up to 700 abandoned oil and gas wells left unused by oil companies when operations lose their financial viability. 

A study from the National Parks Conservation Association found 511 abandoned wells within a 30-mile radius of national parks in New Mexico, mostly in oil-producing regions in southeast Permian Basin and northwest San Juan Basin.

The study found 260 orphan wells near Aztec Ruins National Park and 44 near Chaco Culture Historical Park – both in the San Juan Region – and 198 abandoned wells near Carlsbad Caverns National Park in Permian Basin area.

“It is shocking to learn how many orphaned oil and gas wells are leaking dangerous pollutants into the air and water, harming not only our national parks but also local communities,” said America Fitzpatrick, energy program manager at the Association.

“This is an urgent problem that needs to be addressed by Congress to protect parks and public health, and prevent oil and gas companies from skipping town without cleaning up after themselves again in future.”

New Mexico policymakers seek funds to cleanup oil and gas wells

When wells are left abandoned, the State must pay the cost of shutting them and remediate the land back to its original state.

Depending on the characteristics of the land, it was estimated this could cost million of dollars paid for with public money by the New Mexico’s Oil Conservation Division (OCD).

Gov. Michelle Lujan Grisham recently signed into law a funding bill during the 2021 Special Legislative Session that ended this month, appropriating $3.5 million to abandoned wells, which was a leading priority in the annual budget request from the OCD’s parent agency the Energy, Minerals and Natural Resources Department (EMNRD).

New Mexico’s two Democrat U.S. Sens. Ben Ray Lujan and Martin Heinrich co-sponsored such legislation both citing the environmental harm and potential job creation and economic development that could be brought on by the work.

Lujan’s REGROW Act was intended to provide about $4 billion for well cleanup on private and state lands, along with $400 million for the work on federal and Tribal lands – which included the $250 million included in the Infrastructure Bill.

“The REGROW Act will put New Mexicans back to work while safeguarding our environment and reducing harmful air pollution,” Lujan said. “This bipartisan legislation aims to clean up the tens of thousands of orphaned wells across the nation, including more than 700 in New Mexico.”

Heinrich co-sponsored the Oil and Gas Bonding Reform and Orphaned Well Remediation Act introduced by U.S. Sen. Michael Bennett (D-Co.) which would call for federal agencies to update bonding requirements paid by energy companies when constructing wells.

“This is a problem we must solve,” Heinrich said. “With strong funding for states and Tribes to address the current backlog of these orphan wells, we can put people to work plugging them, protecting groundwater, and curbing hazardous emissions.”

And in the U.S. House of Representatives, Rep. Teresa Leger Fernandez (D-NM) introduced the Orphaned Wells Cleanup and Jobs Act of 2021 that would not only add about $8 billion in funds for remediation but also raise minimum bonding requirements to $150,000 for all of an operator’s wells on an individual lease and $500,000 to all of an operator’s wells in an entire state.

“Fossil fuel companies abandoned hundreds of thousands of oil and gas wells; they abandoned their duty to clean up after themselves,” Leger Fernandez said. “Their leaks into the air and groundwater pose serious public health risks, especially to rural, Tribal, and communities of color.”