Home to 4,605 orphan oil and gas wells, Louisiana seeks federal money to plug them

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Louisiana is home to 4,605 orphan oil and gas wells, some of them threatening the environment, and now plans to ask the federal government for a Infrastructure Investment and Jobs Act grant to help pay the estimated $401.7 million cost of plugging them.

It's one of 26 states that told federal officials by the Dec. 30 deadline they want part of the $4.7 billion reserved in the law for plugging abandoned wells and restoring associated property. The effort is aimed at both cleaning up environmental issues at the well sites and, by plugging the wells, stopping the release of methane, the carbon-rich main ingredient of natural gas that's been linked to global warming.

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In requesting the states to apply for the money, President Joe Biden's administration said the plan was aimed at both its environmental benefits, especially for low- and moderate-income residents living nearby abandoned wells, and its expected economic benefits in an era of declining oil and gas service jobs.

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In its Dec. 23 declaration of interest in a grant, the Louisiana Department of Natural Resources estimated the state lost 12,256 oil and gas industry jobs between March 1, 2020, and Nov. 15, 2021, which represents a 23.4% reduction in that sector in Louisiana.

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If all of Louisiana's orphan wells were targeted for plugging, the effort could employ about 1,000 people fulltime for a year, and could reduce methane emissions by 558 metric tons per year, according to a 2020 report by Columbia University and Resources for the Future, a Washington D.C. environmental policy think tank.

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The Interior and commission tallies do not include 21,211 "idled" or "abandoned" wells in Louisiana and thousands of similar inactive wells in other states that are not considered orphan.

Under Louisiana rules, that includes wells where oil and gas are not being produced for a variety of reasons, including low oil and gas prices. Under a variety of state rules, well owners are not required immediately to plug wells that they are not abandoning, but they remain responsible for assuring the wells are not causing environmental problems.

In the past few years, the number of orphan wells in Louisiana has increased significantly, both because more older abandoned wells have been identified and as small oil and gas companies struggling with lower oil and gas prices have declared bankruptcy or otherwise abandoned ownership of them.

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In the next few weeks, Interior will issue a notice announcing how much money each state will be entitled to request under the grant program. States also may apply for an initial grant of as much as $25 million "to begin building out their plugging programs and remediating high-priority wells."

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