Wednesday, March 22, 2023
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NM To Receive Millions in Fed Funding To Clean Up Orphaned Oil Wells


The Department of the Interior today 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. It's been a key initiative of the Biden Administration's Bipartisan Infrastructure Law, which allocated a total of $4.7 billion to create a new federal program to address orphan wells. According to the Department of the Interior, millions of Americans across the country live within a mile of an orphaned oil and gas well.

Climate experts say that orphaned wells are polluting backyards, recreation areas, and public spaces across the country. These historic investments are expected to help clean up these hazardous sites will create good-paying, union jobs, catalyze economic growth and revitalization, and reduce dangerous methane leaks.

“This 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.” 

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. “Orphan wells are an enormous source of methane, a greenhouse gas that is 86 times more potent than CO2. With this new funding we’re putting our traditional energy workers to work solving a major climate challenge,” said New Mexico Senator Martin Heinrich.

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. New Mexico is eligible for up to $25 million for the first phase. As we've reported before, $25 million is a drop in the bucket. The second phase the state is eligible for will bring the total to $43.7 million. Studies have shown that New Mexico may need up to $8 billion to cap these orphaned wells. These federal allocations were determined using the data provided by states, 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 Haaland.  

These resources will allow state officials to begin building out 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.  

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 the Interior’s Bureau of Land Management.


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