Congressman Lowenthal, HNRC Chair Grijalva, Demand Interior Dept Explain Plans To Protect Taxpayers From Paying For Abandoned Oil And Gas Wells
Today, Congressman Alan Lowenthal (CA-47), chair of the House Natural Resources Committee’s (HNRC) Energy and Mineral Resources (EMR) subcommittee, and HNRC Chair Raúl Grijalva (AZ-03), led a letter to Department of the Interior (DOI) leadership demanding answers to how DOI plans to hold oil and gas companies responsible for abandoning wells.
“Abandoned and orphaned wells have been an issue for decades because the government has never required oil companies to post enough bond coverage to cover cleanup,” Congressman Lowenthal said. “With the steep decline in oil prices due to the COVID-19 pandemic, a possible explosion in the number of orphaned wells left behind by bankrupt oil and gas companies threatens to leave the American taxpayer on the hook to pay for most of the cleanup, with estimates range from $46 million to as much as $333 million, just for those wells identified by the Government Accounting Office (GAO) as being “at risk” of being orphaned. This is unacceptable, and the American people deserve to know what DOI is doing to shield taxpayers.”
In the letter, cosigned by 8 Members of the House Natural Resources Committee, Congressmen Lowenthal and Grijalva point out that according to the GAO, as of April 2019 there were at least 296 orphaned wells on public lands and nearly 2,300 that are “at risk” of becoming orphaned. The actual number of orphaned wells on public lands is likely much higher, because GAO found that the Bureau of Land Management (BLM) does not “systematically or comprehensively track orphaned wells.” Further, the Interstate Oil and Gas Compact Commission (IOGCC) recently found that there were at least 56,000 documented—and potentially 746,000 undocumented—orphaned wells in the United States.
“The best thing our country can do right now is create jobs with real environmental and economic benefits,” HNRC Chair Grijalva said. “Cleaning up orphaned oil and gas wells will put people back to work on shovel-ready projects and clear the way for new infrastructure and economic redevelopment, which is exactly the kind of investment we should be making. As those plans come together, Secretary Bernhardt should be doing everything in his power to make sure Big Oil doesn’t leave us another generation of orphaned wells, and the public deserves to know what he’s doing on their behalf before we get stuck with more polluter leftovers.”
In the letter, the Members demand answers from DOI and BLM to five questions, including:
- What steps, if any, is the Interior Department taking to strengthen federal oil and gas bonding requirements and shield American taxpayers from orphaned well liabilities considering the recent drop in oil prices?
- How many orphaned wells are currently under BLM’s jurisdiction?
- How many “idled” wells are currently under BLM’s jurisdiction? How many of these wells are covered under bonds reviewed by BLM in the last five years and, of these, for how many has BLM proposed bond increases?
- Can BLM please provide the most current version of its list of “entities in noncompliance with reclamation requirements of section 17(g) of the Mineral Leasing Act? If not, can you please explain why not, and also explain how BLM is ensuring compliance with section 17(g), which prohibits entities that are violating reclamation requirements from obtaining new leases?
- What steps is BLM taking to assure that its inventory of 96,000 wells accurately reflects current ownership and operational status, including companies currently in bankruptcy proceedings as well as those with orphaned wells on private and state lands? What is BLM doing to develop and implement reclamation plans for remediation of idled and abandoned wells?
While bonding rates must be updated to ensure that they are sufficient for proper reclamation so that we do not face this same situation in the future (which is why Congressman Lowenthal introduced H.R.4346 - Bonding Reform and Taxpayer Protection Act last year) there is also an immediate need to address the existing orphaned wells continuing to pollute the land, air, and water around them.
The DOI can, and must, do more to ensure adequate public health and environmental protections as well as save taxpayers the unnecessary burden of cleaning up oil and gas wells that industry has left behind.
Congressman Lowenthal, as chair of the EMR subcommittee, recently led a virtual forum on the topic, entitled “Reclaiming Orphaned Oil and Gas Wells.”
The letter is cosigned by Congress Members Matt Cartwright, Diana DeGette, Deb Haaland, Jared Huffman, Mike Levin, Grace F. Napolitano, Joe Neguse, Paul D. Tonko, and Nydia M. Velázquez.
The full text of the letter to the DOI can be found here.