Louisiana is home to 4,605 orphan oil and gas wells and plans to ask the federal government for an Infrastructure Investment and Jobs Act grant to help pay the estimated $401.7 million cost of plugging them.
It is one of twenty-six states that met the Dec. 30 deadline to request part of the $4.7 billion Act to fund plugging of abandoned wells and restoring associated property. The effort is aimed at both cleaning up environmental issues at the well sites and plugging the wells to halt methane emission.
The Biden Administration said the plan was aimed at both its environmental benefits, especially for low- and moderate-income residents living near abandoned wells, and its expected economic benefits for oil and gas service jobs.
The Department of the Interior said Wednesday that the grant-seeking states reported a total of over 130,000 orphan wells.
This report does not include 21,211 “idled” or “abandoned” wells in Louisiana or thousands of similar inactive wells in other states that are not considered orphaned. Additionally, a survey conducted by the Interstate Oil and Gas Compact Commission estimated there are an additional 310,000 to 800,000 undocumented orphan wells around the United State.
In the declaration of grant interest, the Louisiana Department of Natural Resources (DNR) estimated the state lost 12,256 oil and gas industry jobs between March 2020 and November 2021 – a 23.4% reduction.
The Louisiana DNR estimates the effort could employ around 1,000 people full-time and reduce methane emissions by 558 metric tons annually.
In the past few years, the number of orphan wells in Louisiana has increased significantly as older abandoned wells have been identified and small oil and gas companies have been forced into bankruptcy.
The Louisiana DNR said the state plugged and abandoned 3,353 orphan wells between 1993 and November 2021, at a cost of $141.3 million. That represents an average of more than $42,000 for each well, though some wetlands or open water wells may be more expensive.
In the next few weeks, the Interior Department will announce how much money each state will be entitled to request under the grant program. States may also 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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