Initial $25M Grant for Louisiana Orphaned Wells Awarded
Federal government funding announcement allows DNR to call out to contractors to help address orphaned well sites
For Immediate Release
Contact: Patrick Courreges, 225-342-0510
BATON ROUGE – Following today’s announcement by the U.S. Department of the Interior (DOI) that Louisiana has been awarded $25 million in federal funding to address orphaned wells in the state, the Louisiana Department of Natural Resources (DNR) is sending out Request For Qualification (RFQ) notices calling on qualified contractors to submit proposals for work on restoring orphaned well sites.
Orphaned well sites in Louisiana are wells designated by the Office of Conservation as not having a responsive operator, either due to the operator going out of business or being unable or unwilling to maintain their sites in compliance with state regulations. Louisiana’s orphaned well count is at about 4,500 sites, accelerated by downturns in the prices of oil and gas prior to 2022 that put financial strains on oil and gas companies and their ability to maintain their sites or their businesses.
The federal funding comes from the Infrastructure Investment and Jobs Act (IIJA) of 2021, and is being administered by the DOI as part of an overall $1.15 billion announced last January for states to plug and remediate orphaned wells. DOI has indicated states will receive additional phases of funding in coming months.
For this $25 million Initial Grant, in addition to the work of plugging orphaned wells, DNR plans to use the funding to establish systems and protocols surrounding elements recommended by DOI - including establishing or revising protocols and programs for methane and water quality testing and monitoring; addressing disproportionate impacts to disadvantaged communities from orphaned wells; and creating jobs to restore oilfield sites. The Initial Grant requires participating states to obligate 90 percent of the funding to be under contract within 90 days of initial receipt and 100 percent to be obligated within one year. The official start date of these deadlines will be October 1st, but the DOI’s formal announcement allows DNR to move forward with setting up projects and contractors.
This funding is in addition to, and independent from, the funding the state already receives from oil and gas producer fees to plug orphaned well sites through the state Oilfield Site Restoration (OSR) Program. OSR receives about $10 million a year in funding currently, and plugs 120 to 200 wells per year, depending on conditions and complexity of plugging operations.
“This Initial Grant funding will be a strong boost to our ongoing efforts to reduce the number of orphaned well sites in our state,” said DNR Secretary Thomas Harris. “Through cooperative efforts between the state administration and legislators in the past several years, we have found ways to increase the number of wells plugged by OSR annually, but the problem was one that was generations in the making. The IIJA funding helps us take a bigger bite out of the backlog, while also providing opportunities for companies and workers who suffered from the industry downturns.”
DNR hopes to be able to see the Initial Grant pay for at least double the number of wells plugged by OSR annually in recent years, he said.
Orphaned well sites initially planned to be addressed with this grant are primarily located in north Louisiana, with a smaller number of well sites located in south Louisiana, as north Louisiana offers both greater concentrations of orphaned wells – with the Office of Conservation’s Shreveport and Monroe districts being the site of more than 3,100 of the state’s nearly 4,500 current orphaned well sites – and closer proximity to more disadvantaged communities.
Contractors considering submitting proposals to participate in the IIJA-funded orphaned well program in the state, as well interested members of the public, can visit http://www.dnr.louisiana.gov/index.cfm/page/1622 to get the latest updates and information on DOI guidance, DNR activity and IIJA orphaned well projects in Louisiana.
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