DNR restores first 20 Louisiana orphaned well sites with bipartisan infrastructure funding

Shreveport Times 2/2/2023

Thursday, Gov. John Bel Edwards and Louisiana Department of Natural Resources (DNR) Secretary Tom Harris announced that restoration work has been done on more than 20 orphaned well sites since mid-January as a result of the federal funding provided by the Infrastructure Investment and Jobs Act (IIJA). It’s anticipated that contractors will complete the restoration of another dozen sites next week.

Funding for Louisiana was formally announced in October 2022 and the selection of primary contractors in December 2022. The sites were then prepared and work began in mid-January, with the first well plugged on January 17, 2023, in the Caddo Pine Island Field in Caddo Parish, which is home to some of the densest well populations in the state.

Since then contractors have plugged 22 well sites, and will wrap up another dozen in the coming week, with work expected to be continuous through at least October of 2023.

“Thanks to the IIJA and the leadership of Sec. Harris and his team, we have been able to hit the ground running in plugging the orphaned wells, and I’m very pleased with the work that has been done so far and the fact that we anticipate the pace of restoring these sites will only increase in the coming months, said Gov. Edwards. “Plugging the orphaned wells is among the top goals of the state’s Climate Action Plan as we focus on reducing fugitive methane releases and addressing the impacts of climate change. This issue has been decades in the making, and while we will not be able to resolve the problem in a year, the work being done today is helping us gain some ground on the backlog and demonstrates that Louisiana is an excellent investment for future orphaned well restoration funding.”

“We had to make sure that we were applying these funds within the guidelines set by the federal government before we could really get going,” Sec. Harris said. “Now that we have all the pieces in place, we hope to maintain a strong pace of restoring these wells sites through next fall.”

Additionally, Harris said the contractors are still ramping up their work crews – seven crews are currently operating, but a further 10 are becoming available in the coming month.

The U.S. Department of the Interior (DOI) is providing the IIJA funding, having awarded Louisiana a $25-million Initial Grant to address orphaned wells in the state. The IIJA funding 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 this year – though details have not yet been announced.

Typically, 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 in recent years that put financial strains on oil and gas companies and their ability to maintain their sites or their businesses.

For this $25 million Initial Grant, in addition to the work of plugging orphaned wells, DNR is using 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.

As part of the additional requirements of the grant DNR is working with LSU and its contractors to compile methane measurements and cost data to estimate future oilfield site restoration costs and methane emissions from all orphaned and idle wells in Louisiana.

The IIJA 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 the conditions and complexity of plugging operations.

Orphaned well sites initially planned to be addressed with these contracts and future contracts under the Initial Grant are primarily located in north Louisiana, with a smaller number of well sites located in south Louisiana, as north Louisiana offers greater concentrations of orphaned wells. The Office of Conservation’s Shreveport and Monroe districts are the site of more than 3,100 of the state’s roughly 4,500 current orphaned well sites.