Orphaned Well Site Plugging, Remediation, and Restoration

Section 349 of the Energy Policy Act of 2005 (Public Law 109–58; 42 U.S.C. 15907) is amended to read as follows:

349.

Orphaned Well Site Plugging, Remediation, and Restoration

(a)

Federal program

(1)

Establishment

The Secretary, in cooperation with the Secretary of Agriculture and affected Indian Tribes, shall establish a program not later than 180 days after the date of enactment of this section to permanently plug orphaned wells and remediate and reclaim orphaned wells located on land administered by the land management agencies within the Department of the Interior and the Department of Agriculture.(2)

Activities

The program under paragraph (1) shall—(A)include a means of identifying, characterizing, and inventorying orphaned wells on Federal lands and ranking orphaned wells for priority in permanent plugging, remediation, and reclamation, based on public health and safety, potential environmental harm, and other land use priorities;(B)distribute funding according to the priorities identified under subparagraph (A) for—(i)permanently plugging orphaned wells;(ii)remediating and reclaiming well pads and access roads associated with orphaned wells; (iii)remediating soil and restoring native species habitat that has been degraded due to the presence of orphaned wells; and(iv)remediating lands, including access roads, adjacent to orphaned wells and decommissioning or removing pipelines, facilities, and infrastructure associated with the orphaned well;(C)provide a public accounting of the costs of permanently plugging, remediating, and reclaiming each orphaned well;(D)seek to determine the identities of potentially responsible parties associated with the orphaned well, or their sureties or guarantors, to the extent such information can be ascertained, and make efforts to obtain reimbursement for expenditures to the extent practicable; (E)to the maximum extent possible, support research and development efforts aimed at investigating, measuring, and tracking emissions of methane and other gases associated with orphaned wells;(F)measure and track contamination of groundwater or surface water associated with orphaned wells; and(G)reduce the negative effects of orphaned wells on environmental justice communities.(3)

Define orphaned well

Not later than 180 days after the date of enactment of this section, the Secretary shall issue a final rule defining the term orphaned well as such term applies to Federal and Tribal land for the purposes of this section.(4)

Idled wells

(A)

In general

The Secretary, acting through the Director of the Bureau of Land Management, shall annually review all idled wells on Federal lands and take such measures as such Director determines appropriate to reduce such Director’s idled well inventory.(B)

Definition of idled well

Not later than 6 months after the date of enactment of this section, the Secretary, acting through the Director of the Bureau of Land Management, shall establish a definition for the term idled well for the purposes of this section.(5)

Cooperation and consultations

In carrying out the program under paragraph (1), the Secretary shall—(A)work cooperatively with the Secretary of Agriculture, affected Indian Tribes, and the States within which Federal land is located; and(B)consult with the Secretary of Energy and the Interstate Oil and Gas Compact Commission.(b)

State orphaned well site plugging, remediation, and restoration

(1)

In general

(A)

Activities

The Secretary shall provide funding to States as described in this section for any of the following purposes:(i)To permanently plug, remediate, and reclaim orphaned wells located on State- and privately-owned land.(ii)To identify and characterize undocumented orphaned wells on State and private lands.(iii)To rank orphaned wells on State and private lands based on factors including public health and safety, potential environmental harm, and other land use priorities.(iv)To make information regarding the use of funds received under this subsection available on a public website. (v)To measure and track emissions of methane and other gases associated with orphaned wells.(vi)To measure and track contamination of groundwater or surface water associated with orphaned wells.(vii)To remediate soil and restore native species habitat that have been degraded due to the presence of orphaned wells. (viii)To remediate lands, including access roads, adjacent to orphaned wells and decommission or remove pipelines, facilities, and infrastructure associated with the orphaned well.(ix)To take such measures as such State determines necessary to reduce the negative effects of orphaned wells on environmental justice communities.(x)To administer a program to carry out activities described in clauses (i) through (ix).(B)

Limitation

Except for funds received by a State under paragraph (2)(A)(ii), a State may not use more than 10 percent of the funds received under this section in any fiscal year for the purpose described in paragraph (1)(A)(x).(2)

Initial Grants

(A)

In general

The Secretary shall distribute—(i)not more than $25,000,000 to each State that—(I)is a Member State or Associate Member State of the Interstate Oil and Gas Compact Commission;(II)requests funding under this clause not later than 6 months after the date of enactment of this section; (III)has at least one documented orphaned well;(IV)certifies to the Secretary that such State can use at least 90 percent of the requested funding to issue new contracts, amend existing contracts, or issue grants for permanent plugging, remediation, and reclamation work within 180 days of receipt of funds; and(V)describes to the Secretary how funds received under this clause will employ individuals who have lost employment during the period beginning on March 1, 2020, and ending on the date on which such State requests funding under subclause (II); and(ii)not more than $5,000,000 to each State that—(I)requests funding under this clause;(II)does not receive a grant under clause (i); and(III)certifies to the Secretary that—(aa)such State has a permanent plugging, remediation, and reclamation program for orphaned wells or the capacity to start such a program; or(bb)such funds will be used to conduct the administrative work necessary to put together an application to receive funds under paragraph (3).(B)

Distribution

The Secretary shall disburse funds to a State under this subparagraph not later than 30 days after such State makes a certification to the Secretary that such State is eligible to receive such funds.(C)

2 years to expend funds

(i)

In general

A State that receives funds under this paragraph shall reimburse the Secretary in an amount equal to the amount of any unobligated funds that remain 2 years after the date on which such State receives funds under this paragraph.(ii)

Use of reimbursed funds

The Secretary may use funds reimbursed under this subparagraph to carry out any activity under subsection (a)(2).(D)

Report

(i)

In general

Not later than 15 months after the date on which a State receives funds under this paragraph, such State shall submit a report to the Secretary detailing how the State adhered to the certifications required by subparagraph (A).(ii)

Public access

The Secretary shall make available on a publicly accessible website each report submitted under clause (i).(3)

Formula grants

(A)

Formula

(i)

In general

The Secretary shall establish a formula for the distribution of funds under this paragraph to the States described in clause (ii). Such formula, with respect to an applicant State, shall account for the following factors:(I)The job losses in the oil and gas industry between March 1, 2020, and the date of enactment of this section.(II)The number of documented orphaned wells and associated facilities and the projected cost to permanently plug and reclaim such wells.(III)The amount of oil or gas produced in 2019, as determined by the Administrator of the Energy Information Administration.(ii)

Notification

A State is described in this clause if, not later than 45 days after the date of enactment of this section, such State submits a notice to the Secretary that such State intends to submit an application under subparagraph (B) and includes in such notification the information described in subclauses (I) through (III) of clause (i) with respect to such State.(iii)

Publication

The Secretary shall, not later than 30 days after the date described in clause (ii), publish on a public website the amount that each State described in clause (ii) is eligible to receive under the formula established under clause (i).(B)

Application

A State may apply to receive funds under this paragraph by submitting an application including—(i)a description of—(I)the State program for orphaned well permanent plugging, remediation, and restoration, including legal authorities, processes used to identify and prioritize orphaned wells, procurement mechanisms, and other program elements demonstrating the readiness of the State program to carry out the proposed activities;(II)the activities to be carried out with the grant, including an identification of the estimated health, safety, habitat, and environmental benefits of permanent plugging, remediating, or reclaiming the orphaned wells; and(III)how the information regarding the State’s activities under this subsection will be made available on a public website;(ii)an estimate of—(I)the number of orphaned wells that will be permanently plugged, remediated, or reclaimed;(II)the projected cost of permanently plugging, remediating, or reclaiming orphaned wells, adjacent lands, and access roads; (III)the amount of that cost that will be offset by the forfeiture of financial assurance instruments, the estimated salvage of well-site equipment, or other proceeds from the orphaned wells and adjacent lands;(IV)the number of jobs that will be created or saved through the activities to be funded under this subsection; and(V)the amount of funds to be spent on administrative costs; (iii)a certification that any financial assurance instruments, including bonds, available to cover permanent plugging, remediation, or reclamation costs will be used by the State; and(iv)the definitions and processes used by the State to formally declare a well orphaned or, if the State uses different terminology, otherwise eligible for permanent plugging, remediation, and reclamation by the State, including the steps the State has taken to identify the well’s most recent operator.(C)

Review of State definitions and processes

The Secretary may only distribute funds to a State under this paragraph if the Secretary determines that—(i)such State has taken appropriate steps to protect taxpayers from unnecessarily paying for permanent plugging, remediation, and reclamation costs; (ii)the processes of such State for declaring a well eligible for permanent plugging by the State are reasonable; and(iii)the definition provided by the State for the term orphaned well (or an alternate term, if applicable), if such term differs from the definition given such term in subsection (h)(5)(A)(ii), is reasonable.(D)

5 years to expend funds

A State that receives funds under this paragraph shall reimburse the Secretary in an amount equal to the amount of any unobligated funds that remain 5 years after the date on which such State receives funds under this paragraph.(E)

Consultation

In making a determination under this paragraph regarding the eligibility of a State to receive funds, the Secretary shall consult with the Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Interstate Oil and Gas Compact Commission.(F)

Consideration timeline

Not later than 60 days after receiving a completed application that meets the requirements of this section from a State under this paragraph, the Secretary shall issue a grant to such State.(4)

Discretionary grants

(A)

In general

(i)

Regulatory improvement grant

(I)

In general

Beginning on the date that is 6 months after the date on which the first grant is issued under paragraph (2), the Secretary may provide funding in an amount not to exceed $20,000,000 per grant to a State if the State meets one of the following criteria:(aa)The State has strengthened restrictions on methane emissions from oil and gas operations that result in a level of emissions not higher than the level that would be permitted if the final rule entitled Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources and published in the Federal Register on June 3, 2016 (81 Fed. Reg. 35824) were in effect.(bb)The State has strengthened its plugging and abandonment rules to require that an operator of a well takes steps to isolate all oil-bearing or gas-bearing strata encountered in the well, protect underground or surface water suitable for irrigation, farming, or other domestic purposes from the infiltration or addition of any detrimental substances, and to prevent subsequent damage to life, health, property, and other resources.(cc)The State has made improvements to State programs designed to prevent future orphaned well burdens, including bonding reform or other financial assurance reform, alternative funding mechanisms for orphaned well programs, and reforms to well transfer and temporary abandonment programs in the 10 years preceding the date that the States applies for a grant under this paragraph.(II)

Limitation

The Secretary may only issue one grant per criterion per State under this clause.(ii)

Matching grant

(I)

In general

Beginning on the date that is 6 months after the date on which the first grant is issued under paragraph (2), the Secretary may provide funding to a State in an amount equal to the difference between—(aa)the amount of funds such State expended on average in fiscal years 2010 through 2019 to permanently plug, remediate, and reclaim orphaned wells and associated facilities; and(bb)the amount of funds such State certifies to the Secretary such State will expend for such purposes in the fiscal year in which such State will receive such grant.(II)

Annual grant

The Secretary may issue one grant per State per fiscal year under this clause.(III)

Limitation on total funds provided to a State

The Secretary may not provide a total of more than $30,000,000 to a State under this clause during the period of fiscal years 2021 through 2031.(B)

Application

(i)

In general

A State may apply to receive funds under this paragraph by submitting an application including—(I)each of the elements required in an application under paragraph (3)(B);(II)a description of measures such State has taken to address orphaned wells, including by increasing State spending on well permanent plugging, remediation, and reclamation and by improving regulation of oil and gas wells; and(III)a description of how such State will use such funds to—(aa)lower unemployment in such State; and(bb)improve economic conditions in economically distressed areas of such State.(ii)

Consultation

In making a determination to issue a grant under this paragraph, the Secretary shall consult with the Administrator of the Environmental Protection Agency and the Secretary of Energy.(iii)

Reimbursement for failure to maintain protections

A State that receives funds under this paragraph shall reimburse the Secretary any funds received if, during the 10 year period beginning on the date of receipt of funds under this paragraph, such State enacts a statute or regulation that, if such statute or regulation were in effect when the State submitted an application under this paragraph, would have prevented such State from being eligible to receive funds under subparagraph (A)(i)(I).(iv)

Consideration timeline

Not later than 60 days after receiving an application from an eligible State under this paragraph, the Secretary shall make a grant or reject such application.(5)

State report

(A)

In general

Each State that receives funding under this subsection shall submit a report to the Secretary each year that provides—(i)the number of orphaned wells that have been permanently plugged, remediated, or reclaimed;(ii)the cost of permanently plugging, remediating, or reclaiming orphaned wells, adjacent lands, and access roads; (iii)the amount of that cost offset by the forfeiture of financial assurance instruments, the salvage of well-site equipment, or other proceeds from the orphaned wells;(iv)an estimate of the number of jobs created or saved through the activities funded under this subsection; (v)the funds spent on administrative costs; (vi)a description of how the State is working to decrease the effects of orphaned wells on environmental justice communities; and(vii)survey results from State efforts to identify undocumented orphaned wells.(B)

Public access

The Secretary shall make available on a publicly accessible website each report submitted under subparagraph (A).(c)

Tribal orphaned well site plugging, remediation, and restoration

(1)

Establishment

The Secretary shall establish a program in the Bureau of Indian Affairs to provide grants to Indian Tribes for the purposes described in paragraph (2).(2)

Activities

The purposes described in this paragraph are to—(A)permanently plug, remediate, and reclaim orphaned wells on Tribal land;(B)remediate soil and restore native species habitat that has been degraded due to the presence of orphaned wells on Tribal land;(C)remediate lands, including access roads, adjacent to orphaned wells and decommission or remove pipelines, facilities, and infrastructure associated with the orphaned well on Tribal lands;(D)provide an online public accounting of the cost of permanent plugging, remediation, and reclamation for each orphaned well site on Tribal land; (E)identify and characterize undocumented orphaned wells on Tribal land; and(F)administer a Tribal program to carry out activities described in subparagraphs (A) through (E).(3)

Considerations

In making a determination to issue a grant under this subsection, the Secretary shall take into account—(A)the unemployment rate of the Indian Tribe on the date such Indian Tribe submits the application under paragraph (4);(B)the number of documented orphaned wells on the land of such Indian Tribe; and(C)the amount of oil and gas produced on the land of such Indian Tribe in 2019, as determined by the Secretary.(4)

Application

An Indian Tribe may apply to receive funds under this paragraph by submitting an application that includes—(A)a description of—(i)the Tribal program for orphaned well permanent plugging, remediation, and restoration, including legal authorities, processes used to identify and prioritize orphaned wells, procurement mechanisms, and other program elements demonstrating the readiness of the Tribal program to carry out the proposed activities; and(ii)the activities to be carried out with the grant, including an identification of the estimated health, safety, and habitat, and environmental benefits of permanently plugging, remediating, or reclaiming the orphaned wells, adjacent lands, and access roads; and(B)an estimate of—(i)the number of orphaned wells that will be permanently plugged, remediated, or reclaimed; and(ii)the projected costs of permanently plugging, remediating, or reclaiming the orphaned wells and any adjacent lands or access roads.(5)

Limitation

An Indian Tribe may not use more than 10 percent of the funds received under this subsection in a fiscal year for the purposes described in paragraph (2)(F).(6)

Consideration timeline

The Secretary shall issue or deny a grant under this subsection not later than 60 days after the date of receipt of the complete application under paragraph (4).(7)

5 years to expend funds

An Indian Tribe that receives funds under this subsection shall reimburse the Secretary in an amount equal to the amount of any unobligated funds that remain 5 years after the date on which such Indian Tribe receives funds under this subsection.(8)

Deferral of plugging and remediation

An Indian Tribe with an orphaned well within such Indian Tribe’s jurisdiction may request that the Secretary administer and carry out permanent plugging, remediation, and reclamation work with respect to such orphaned well. For the purposes of subsection (a), any orphaned well with respect to which the Indian Tribe with jurisdiction has made such a request shall be treated as if such orphaned well is on land administered by a land management agency within the Department of the Interior.(d)

Technical assistance

The Secretary of Energy, in cooperation with the Secretary and the Interstate Oil and Gas Compact Commission, shall provide technical assistance to Federal land management agencies and oil and gas producing States and Indian Tribes to ensure practical and economical remedies are used to address environmental problems caused by orphaned wells on Federal, State, Tribal, or private land, including the sharing of best practices in the management of oil and gas well inventories to ensure the availability of funds to permanently plug, remediate, and restore oil and gas well sites when operations cease.(e)

Report to Congress

Not later than 1 year after the date of enactment of this section, and every year thereafter, the Secretary shall submit to the Committees on Appropriations and Energy and Natural Resources of the Senate and to the Committees on Appropriations and Natural Resources of the House of Representatives a report on the program established and grants awarded under this section, including—(1)an updated inventory of—(A)orphaned wells on Federal, Tribal, State, and private land; and(B)wells at-risk of becoming orphaned on Federal, Tribal, State, and private land;(2)to the maximum extent practical, an estimate of—(A)the amount of methane and other gasses emitted from orphaned wells; and(B)the amount of emissions reduced as a result of permanently plugging and reclaiming orphaned wells;(3)the number of jobs created and saved through the permanent plugging, remediation, and reclamation of orphaned wells; and(4)the acreage of habitat restored using grants awarded to permanently plug, remediate, and reclaim orphaned wells and adjacent lands, including access roads, and a description of how such land is likely to be used in the future.(f)

Idled well fees

(1)

In general

The Secretary shall, not later than 180 days after the date of enactment of this section, issue regulations to require each operator of an idled well on Federal land to pay an annual, nonrefundable fee for each such idled well in accordance with this subsection.(2)

Amounts

Except as provided in paragraph (5), the amount of the fee shall be as follows:(A)$500 for each well that has been considered an idled well for at least 1 year, but not more than 5 years.(B)$1,500 for each well that has been considered an idled well for at least 5 years, but not more than 10 years.(C)$3,500 for each well that has been considered an idled well for at least 10 years, but not more than 15 years.(D)$7,500 for each well that has been considered an idled well for at least 15 years.(3)

Due date

An owner of an idled well that is required to pay a fee under this subsection shall submit to the Secretary such fee by not later than May 1 of each year.(4)

Civil penalty

If the operator of a idled well fails to pay the full amount of a fee under this subsection, the Secretary may assess a civil penalty against the operator under section 109 of the Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1719) as if such failure to pay were a violation under such section.(5)

Adjustment for inflation

The Secretary shall, by regulation not less than once every 4 years, adjust each fee under this subsection to account for inflation based on the Consumer Price Index for All Urban Consumers (as published by the Bureau of Labor Statistics of the Department of Labor).(6)

Use of fees

The Secretary, acting through the Director of the Bureau of Land Management, shall use any fees collected under this subsection for the following purposes:(A)50 percent of such amounts shall be used for—(i)inventorying and tracking orphaned wells on Federal lands;(ii)permanently plugging orphaned wells on Federal lands;(iii)remediating and reclaiming well pads and access roads associated with orphaned wells on Federal lands;(iv)remediating soil and restoring native species habitat that have been degraded due to the presence of orphaned wells on Federal land; and(v)remediating lands, including access roads, adjacent to orphaned wells and decommissioning or removing pipelines, facilities, and infrastructure associated with orphaned wells.(B)50 percent of such amounts shall be used to carry out part 3163 of title 43, Code of Federal Regulations (or any successor regulation).(g)

Savings clauses and prevailing wage requirements

(1)

No expansion of liability

Nothing in this section establishes or expands the responsibility or liability of any entity with respect to permanently plugging a well or remediating or reclaiming a well site.(2)

Prevailing wage

Any entity carrying out a project authorized by this section shall be required to pay prevailing wages in accordance with subchapter IV of chapter 31 of title 40, United States Code (commonly known as the Davis-Bacon Act).(3)

Tribal land

Nothing in this section may be construed to relieve the Secretary of any obligation imposed by section 3 of the Act of May 11, 1938 (25 U.S.C. 396c), or to absolve the United States from any responsibility to an Indian Tribe, including those which derive from the trust relationship or from any treaties, statutes, Executive orders, or agreements between the United States and an Indian Tribe, to permanently plug, remediate, or reclaim orphaned wells located on Tribal lands.(4)

Owner or operator not absolved

Nothing in this section may be construed to absolve the owner or operator of an oil or gas well of potential liability for reimbursement of permanent plugging and reclamation costs or adverse effects on the environment.(h)

Definitions

In this section:(1)

Environmental justice community

The term environmental justice community means any community with significant representation of communities of color, low-income communities, or Tribal and indigenous communities, that experiences, or is at risk of experiencing higher or more adverse human health or environmental effects.(2)

Idled well

The term idled well—(A)if the Secretary has not established a definition under subsection (a)(4)(B), means a well that has been non-operational for at least two consecutive years for which there is no anticipated beneficial future use; or(B)has the meaning given to such term by the Secretary under subsection (a)(4)(B).(3)

Indian Tribe

The term Indian Tribe has the meaning given to such term in section 4(e) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)).(4)

Operator

The term operator means, with respect to an oil or gas operation, any entity, including the lessee or operating rights owner, who has stated in writing to a relevant authority that such entity is responsible for such operation or a portion thereof.(5)

Orphaned well

The term orphaned well—(A)with respect to Federal and Tribal land—(i)has the meaning given to such term by the Secretary under subsection (a)(3); or(ii)if the Secretary has not defined the term under such subsection, means a well that is not being used for authorized purposes such as production, injection, or monitoring and for which either no operator can be found or the operator is unable to permanently plug the well and remediate and reclaim the well site; and(B)with respect to State or private land—(i)has the meaning given to such term by such State if the Secretary determines under subsection (b)(3)(C)(iii) that such definition is reasonable; or(ii)has the meaning given in subparagraph (A).(6)

Tribal land

The term Tribal land means any land or interests in land owned by any Indian Tribe, title to which is held in trust by the United States, or is subject to a restriction against alienation under laws of the United States.(i)

Authorization of appropriations

There are authorized to be appropriated for fiscal year 2021, to remain available until September 30, 2031— (1)to the Secretary—(A)$400,000,000 to carry out the program under subsection (a);(B)$1,500,000,000—(i)to provide grants under paragraph (2) of subsection (b); and(ii)to provide, beginning on the date that is 18 months after amounts are made available to carry out this section, grants under paragraph (4) of such subsection;(C)$3,500,000,000 to provide grants under paragraph (3) of such subsection;(D)$2,250,000,000 to provide grants under paragraph (4) of such subsection; and(E)$300,000,000 to carry out subsection (c);(2)to the Secretary of Energy, $48,000,000 to conduct research and development activities in cooperation with the Interstate Oil and Gas Compact Commission to assist the Federal land management agencies, States, and Indian Tribes in identifying and characterizing undocumented orphaned wells and mitigating the environmental risks of undocumented orphaned wells; and(3)to the Interstate Oil and Gas Compact Commission, $2,000,000 to carry out this section.