Federal officials are setting the framework for interagency programs to manage nearly $5 billion to clean up and plug thousands of orphan oil and gas wells across the country, and state regulators are moving quickly to capture the share of Alaska.
Leaders of the Departments of Interior, Agriculture, and Energy, along with the Environmental Protection Agency and the Interstate Oil and Gas Compact Commission, signed an agreement Jan. 14 that clarifies each agency’s role in the management of $4.7 billion dedicated to the remediation, plugging and abandonment of well sites in the Infrastructure Investment and Jobs Act passed by Congress last November.
The memorandum of understanding outlines the roles of a seven-member executive group made up primarily of interior agency leaders to oversee the cleanup of wells on federal lands. Separate programs are in place for state and tribal subsidy programs for well cleaning.
According to an IOGCC report released late last year, 33 states reported more than 92,000 orphan wells across the country in 2020; a total up approximately 50% compared to 2018 due to renewed interest in the study and documentation of orphan wells.
Alaska Oil and Gas Conservation Commission Chairman Jeremy Price is the state representative on the IOGCC. He said while Alaska has only 12 orphan wells identified on public and private lands scattered across the South-Central and North Slope, plugging and remediation work at the mostly remote sites comes with at an excessive cost. AOGCC estimates that it will take $42.6 million to properly plug, remediate and abandon the 12 well sites, according to the agency’s Dec. 29 notice of intent to apply for federal grants.
He said the AOGCC plans to visit some of the orphan wells and carry out early work next spring – also when the state grants are expected to be announced.
“The (infrastructure) bill was written to get people back to work, so we have to meet tight timelines,” Price said, adding that some of the competitive grants will take into account job losses in the oil and gas industry for each state from the beginning. of the pandemic. Alaska has lost about 3,300 jobs, or about 33% of its oil and gas workforce since March 2020, according to AOGCC’s notice of intent to apply for the grants.
However, the state’s application does not cover all problem wells in the state. Funding from the Bureau of Land Management to repair 20 remaining legacy wells needing attention in Alaska’s National Petroleum Reserve on the North Slope will come from the federal well cleanup program.
Hannah Ray, spokeswoman for Sen. Lisa Murkowski, wrote via email that the senator believes the Interior should prioritize cleaning up wells on federal lands, especially those drilled by the federal government, such as in the NPR-A. Murkowski was part of the 10-member Senate negotiating team on the infrastructure bill
Interior spokesman Tyler Cherry wrote in an email response to questions that the department is meeting the aggressive deadlines set out in the infrastructure bill to get the money out.
According to Cherry, interior officials are working to publish the amount of formula grant each state will be eligible to apply for, along with application guidance.
“The department wastes no time working with our partners to ensure these investments and programs make sense for the communities they are meant to benefit,” he wrote. “We are focused on implementing these programs as quickly and efficiently as possible.”