[House Report 117-645]
[From the U.S. Government Publishing Office]
117th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 117-645
======================================================================
ORPHANED WELL CLEANUP AND JOBS ACT OF 2021
_______
December 15, 2022.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Grijalva, from the Committee on Natural Resources, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 2415]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred
the bill (H.R. 2415) to amend the Energy Policy Act of 2005 to
require the Secretary of the Interior to establish a program to
permanently plug, remediate, and reclaim orphaned wells and the
surrounding lands and to provide funds to States and Tribal
Governments to permanently plug, remediate, and reclaim
orphaned wells and the surrounding lands, and for other
purposes, having considered the same, reports favorably thereon
with an amendment and recommends that the bill as amended do
pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Orphaned Well Cleanup and Jobs Act of
2021''.
SEC. 2. ORPHANED WELL SITE PLUGGING, REMEDIATION, AND RESTORATION.
(a) In General.--Section 349 of the Energy Policy Act of 2005 (Public
Law 109-58; 42 U.S.C. 15907) is amended to read as follows:
``SEC. 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 and the States within which Federal land is
located; and
``(B) consult with affected Indian Tribes, 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.
``(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 (II) 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
(i)(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--
``(AA) requires, or
will require by the
date that is not later
than five years after
the date of enactment
of the Orphaned Well
Cleanup and Jobs Act of
2021, the operator of
each well subject to
regulation by the State
to capture (which such
term means the physical
containment of gas for
transportation to
market or productive
use, including
reinjection and other
on-site uses) at least
98 percent of all gas
produced each year from
each such well; and
``(BB) prohibits, or
will prohibit by the
date that is not later
than five years after
the date of enactment
of the Orphaned Well
Cleanup and Jobs Act of
2021, venting and
flaring of gas produced
from each such well,
except in the case of
emergencies or
equipment failures as
defined under the
applicable law of such
State.
``(bb) During the period of
10 years that precedes the date
on which the State applies for
a grant under this paragraph,
the State strengthened its
plugging standards and
procedures to ensure that wells
located in the State are
plugged in an effective manner
that protects groundwater and
other natural resources, public
health and safety, and the
environment.
``(cc) The State has made
improvements to State programs
designed to prevent future
orphaned well burdens, such as
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, excluding
confidential or sensitive Tribal trust or business
information (as determined by the Secretary);
``(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 the number of documented orphaned wells on the land of
the Indian Tribe and the projected cost to permanently plug and
reclaim such wells.
``(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 15
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) 8 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
8 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) American Iron, Steel, and Manufactured Products.--
``(1) Definitions.--In this subsection:
``(A) Iron or steel manufactured product.--The term
`iron or steel manufactured product' includes any
construction material or end product (as those terms
are defined in subpart 25.003 of the Federal
Acquisition Regulation) that does not otherwise qualify
as an iron or steel product, including--
``(i) an electrical component;
``(ii) a non-ferrous building material,
including--
``(I) aluminum and polyvinylchloride;
``(II) glass;
``(III) fiber optics;
``(IV) plastic;
``(V) wood;
``(VI) masonry;
``(VII) rubber;
``(VIII) manufactured stone; and
``(IX) any other non-ferrous metals;
and
``(iii) an unmanufactured construction
material.
``(B) Produced in the united states.--
``(i) In general.--The term `produced in the
United States'--
``(I) with respect to an iron or
steel product or an iron or steel
manufactured product, means that all
manufacturing processes for, and
materials and components of, the iron
or steel product or iron or steel
manufactured product, from the initial
melting stage through the application
of coatings, occurred in the United
States; and
``(II) with respect to an iron or
steel manufactured product, means
that--
``(aa) the iron or steel
manufactured product was
manufactured in the United
States; and
``(bb) the cost of the
components of the iron or steel
manufactured product that were
mined, produced, or
manufactured in the United
States is greater than 60
percent of the total cost of
the components of the iron or
steel manufactured product.
``(ii) Exclusions.--The term `produced in the
United States', with respect to an iron or
steel product or iron or steel manufactured
product, does not include an iron or steel
product or an iron or steel manufactured
product the materials and components of which
were manufactured--
``(I) abroad from semi-finished steel
or iron from the United States; or
``(II) in the United States from
semi-finished steel or iron of foreign
origin.
``(2) Requirement.--Funds made available under this section
may not be used for an orphaned well plugging or remediation
project unless all of the iron and steel products and steel
manufactured products used in the project are produced in the
United States.
``(3) Waiver.--
``(A) In general.--On request of the recipient of a
grant under this section, the Secretary may grant for
the project of the recipient of the grant a waiver of
the requirement described in paragraph (2) if the
Secretary finds that--
``(i) the application of paragraph (2) would
be inconsistent with the public interest;
``(ii) iron or steel products or iron or
steel manufactured products are not produced in
the United States--
``(I) in sufficient and reasonably
available quantities; or
``(II) of a satisfactory quality; or
``(iii) the inclusion of iron or steel
products or iron or steel manufactured products
in the United States would increase the cost of
the overall project by greater than 25 percent.
``(B) Public notice.--On receipt of a request for a
waiver under subparagraph (A), the Secretary shall--
``(i) make available to the public, including
by electronic means, including on the official
public website of the Department, on an
informal basis, a copy of the request and all
information available to the Secretary relating
to the request; and
``(ii) provide for informal public input on
the request for a period of not fewer than 15
days before making with respect to the request
the finding described in subparagraph (A).
``(i) 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' means the
governing body of any Indian or Alaska Native Tribe, band,
nation, pueblo, village, community, component band, or
component reservation individually identified (including
parenthetically) in the most recent list published pursuant to
section 104 of the Federally Recognized Indian Tribe List Act
of 1994 (25 U.S.C. 5131).
``(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
minerals, or interests in land or minerals, owned by any Indian
Tribe, the title to which is held in trust by the United
States, or is subject to a restriction against alienation under
the laws of the United States.
``(j) 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.''.
(b) Clerical Amendment.--Section 1(b) of the Energy Policy Act of
2005 is amended in the table of contents by amending the item relating
to section 349 to read as follows:
``Sec. 349. Orphaned well site plugging, remediation, and
restoration.''.
SEC. 3. AMENDMENT TO MINERAL LEASING ACT.
Section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g)) is
amended by inserting ``The Secretary concerned shall review the
adequacy of each such bond, surety, or other financial arrangement
anytime a lease issued under this section is transferred. Each such
bond, surety, or other financial arrangement shall be considered
inadequate if such bond, surety, or other financial arrangement is for
less than $150,000 in the case of an arrangement for an individual
surface-disturbing activity of each entity on an individual oil or gas
lease in a State, or $500,000 in the case of an arrangement for all
surface-disturbing activities of each entity on all oil and gas leases
in a State.'' after ``on the lease.''.
Purpose of the Bill
The purpose of H.R. 2415 is to amend the Energy Policy Act
of 2005 to require the Secretary of the Interior to establish a
program to permanently plug, remediate, and reclaim orphaned
wells and the surrounding lands and to provide funds to States
and Tribal Governments to permanently plug, remediate, and
reclaim orphaned wells and the surrounding lands.
Background and Need for Legislation
When oil and gas wells reach the end of their productive
lifespans, well owners must plug each well and reclaim the
surrounding land to its original condition. Plugging involves
removing any remaining pipelines and sealing the well shut with
a cement plug. Reclamation involves removing structures and
equipment on the surface and restoring vegetation around a well
site to its original natural condition. Before drilling, oil
and gas development companies provide regulators with a bond or
other financial assurance instrument to cover plugging and
reclamation costs if the company declares bankruptcy,
dissolves, or otherwise fails to clean up the site. Bonds and
other financial assurance mechanisms are intended to ensure
taxpayers are not left paying for the cost of remediation. Bond
amounts vary significantly by state and the number and type of
wells they cover.
Wells are ``orphaned'' when bonds are insufficient to cover
plugging and reclamation expenses and there are no known
responsible or liable parties. Taxpayers are eventually left to
cover these reclamation costs. Orphaned wells exist on federal,
tribal, state, and private lands, plaguing federal and state
regulators. Decommissioned wells that have been properly closed
and reclaimed are ``plugged and abandoned.'' Wells with no
recent production that are unlikely to be appropriately plugged
are ``abandoned.'' ``Idle'' or ``idled'' wells have not
produced oil or gas for a fixed period: six months to several
years, depending on the state or federal jurisdiction.
It's difficult to approximate the number of orphaned oil
and gas wells in the United States. A preliminary survey by the
Interstate Oil and Gas Compact Commission (IOGCC), a consortium
of 31 state oil and gas regulators, suggests that as of 2020,
there were at least 69,000 known orphaned wells in the
country.\1\ A large percent of these wells are in Kentucky,
Pennsylvania, Texas, West Virginia, Kansas, and Illinois. The
IOGCC also estimates there may be hundreds of thousands more
undocumented orphaned wells dating from the early years of oil
and gas production in the United States.
---------------------------------------------------------------------------
\1\Building Back Better: Creating Jobs and Reducing Pollution by
Plugging and Reclaiming Orphaned Wells: Hearing on H.R. 2415 Before the
Subcomm. on Energy & Min. Res. of the H. Comm. on Nat. Res., 117th
Cong. (Apr. 15, 2021) (not printed) (statement of Lori Wrotenbery,
Exec. Dir., IOGCC, at 1-2), https://docs.house.gov/meetings/II/II06/
20210415/111449/HHRG-117-II06-Wstate-WrotenberyL-20210415.pdf.
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In 2018, the Environmental Protection Agency (EPA)
estimated there are around 3.2 million abandoned oil and gas
wells in the United States, of which approximately 2 million
are considered unplugged or remain improperly closed.\2\ The
nonprofit organization Carbon Tracker estimates there are 2.6
million unplugged U.S. wells,\3\ while another analysis
estimates there are closer to 1.5 million abandoned or orphaned
wells.\4\
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\2\EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-
2016: Abandoned Oil and Gas Wells 8 tbl.7 (2018), https://www.epa.gov/
sites/default/files/2018-04/documents/ghgemissions_abandoned_wells.pdf.
\3\Robert Schuwerk & Greg Rogers, Carbon Tracker, Billion Dollar
Orphans 9 (2020), available at https://carbontracker.org/reports/
billion-dollar-orphans/.
\4\Matt Mayer, TGS-NOPEC Geophysical Co., Abandoned Wells--How Big
is the Problem, and What Can Be Done? 1 (2020), https://www.tgs.com/
hubfs/Well%20Intel/Well-Intel-12-Abandoned-Wells-R01.pdf.
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The U.S. Department of the Interior (DOI) is responsible
for oil and gas development on federal and tribal lands. Within
DOI, the Bureau of Land Management (BLM) is primarily
responsible for managing oil and gas resources. BLM administers
more than 247 million acres of land and 700 million acres of
subsurface mineral estate. BLM cooperates with the U.S. Forest
Service (USFS) to coordinate access to federal oil and gas
resources in national forests and with the Bureau of Indian
Affairs (BIA) to manage oil and gas resources on tribal land.
In April 2021, in a statement submitted to the
congressional record during a hearing on H.R. 2415, DOI
announced that across USFS, BLM, BIA, the National Park
Service, and the U.S. Fish and Wildlife Service, there are more
than 14,400 orphaned and likely orphaned wells on the federal
lands managed by these agencies.\5\
---------------------------------------------------------------------------
\5\See Building Back Better: Creating Jobs and Reducing Pollution
by Plugging and Reclaiming Orphaned Wells: Hearing on H.R. 2415 Before
the Subcomm. on Energy & Min. Res. of the H. Comm. on Nat. Res., 117th
Cong. (Apr. 15, 2021) (not printed) (statement of the U.S. Dep't of the
Interior, at 2), https://docs.house.gov/meetings/II/II06/20210415/
111449/HHRG-117-II06-20210415-SD002.pdf.
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In 2019, the U.S. Government Accountability Office (GAO)
issued a report that found the bonds held by BLM insufficient
to clean up orphaned wells because they do not reflect total
reclamation costs.\6\ According to GAO, the average bond
coverage for each well on BLM public land is $2,122.\7\ Yet
eighty-four percent of bonds held would not fully cover
reclamation costs even under a low-cost scenario.\8\ GAO
estimated the typical cleanup costs for orphaned wells to be
between $20,000 and $145,000 per well and recommended that BLM
substantially increase minimum bond levels.\9\
---------------------------------------------------------------------------
\6\GAO, GAO-19-615, Oil and Gas: Bureau of Land Management Should
Address Risks From Insufficient Bonds to Reclaim Wells 14 (2019),
https://www.gao.gov/assets/710/701949.pdf.
\7\Id. at 11.
\8\Id. at 15.
\9\Id. at 24-25.
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Abandoned oil and gas wells can leak natural gas and other
pollutants, damaging local air quality and contributing to
climate change. As the structural integrity of a wellbore
decreases with time, gases can migrate from underground
formations to the surface. Escaped gases can include methane,
the primary component of natural gas and a potent greenhouse
gas.\10\ Other hazards include ground-level ozone pollution,
volatile organic compounds, and benzene,\11\ a known carcinogen
that causes leukemia\12\ and is linked to low birth
weights.\13\ According to the Centers for Disease Control and
Prevention, exposure to ground-level ozone is linked to health
problems such throat irritation, wheezing and breathing
difficulties, and aggravation of respiratory illnesses like
asthma, bronchitis, and emphysema.\14\
---------------------------------------------------------------------------
\10\Nichola Groom, Special Report: Millions of Abandoned Oil Wells
Are Leaking Methane, a Climate Menace, Reuters (June 16, 2020), https:/
/www.reuters.com/article/us-usa-drilling-abandoned-specialreport/
special-report-millions-of-abandoned-oil-wells-are-leaking-methane-a-
climate-menace-idUSKBN23N1NL.
\11\Id.
\12\See, e.g., Frolayne M. Carlos-Wallace et al., Parental, In
Utero, and Early-Life Exposure to Benzene and the Risk of Childhood
Leukemia: A Meta-Analysis, 183(1) Am. J. Epidemiology 1, 1 (2015),
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4751231/pdf/kwv120.pdf
(doi:10.1093/aje/kwv120); HHS, Agency for Toxic Substances & Disease
Registry, Toxicological Profile for Benzene 6, 9 (2007), https://
www.atsdr.cdc.gov/toxprofiles/tp3.pdf.
\13\See, e.g., Sammy Zahran et al., Maternal Benzene Exposure and
Low Birth Weight Risk in the United States: A Natural Experiment In
Gasoline Reformulation, 112 Env't Rsch. 139 (2012), available at
https://doi.org/10.1016/j.envres.2011.11.008.
\14\Ozone and Your Health, CDC, https://www.cdc.gov/air/ozone.html
(last updated Sept. 4, 2019).
---------------------------------------------------------------------------
According to a 2020 study, the United States has
underestimated methane emissions from abandoned oil and gas
wells by 20 percent,\15\ and states have underestimated the
number of nonproducing wells by around 12 percent.\16\ In a
2016 study, the National Academies of Sciences found abandoned
wells in Pennsylvania emit 40,000 to 70,000 metric tons of
methane per year--between 5 and 8 percent of the state's human-
caused methane emissions.\17\ A few high-emitting wells are
responsible for most methane leaks, meaning plugging and
remediating high-risk wells can substantially reduce methane
emissions.
---------------------------------------------------------------------------
\15\James P. Williams, Amara Regehr & Mary Kang, Methane Emissions
from Abandoned Oil and Gas Wells in Canada and the United States, 55(1)
Env't Sci. & Tech. 563 (2021), https://doi.org/10.1021/acs.est.0c04265
(published online 2020), corrected as to other matters, 55(1) Env't
Sci. & Tech. 3449 (2021), https://pubs.acs.org/doi/pdf/10.1021/
acs.est.1c00377.
\16\Id.; see also Carlos Anchondo, U.S. Underestimates GHGs from
Abandoned Oil Wells--Study, E&E News (Jan. 22, 2021), https://
www.eenews.net/energywire/stories/1063723223.
\17\Mary Kang et al., Identification and Characterization of High
Methane-Emitting Abandoned Oil and Gas Wells, 113(48) PNAS 13,636,
13,639 (2016), available at https://doi.org/10.1073/pnas.160591311,
corrected as to other matters, 114(29) PNAS E6025 (2017), available at
https://www.pnas.org/doi/10.1073/pnas.1711230114.
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Improperly plugged wells can also cause oil, gas, or brine
to leak into groundwater resources.\18\ ``Brine'' is saline
water that naturally exists underground alongside oil and gas
and can contain metals, naturally occurring organic compounds,
and radioactive materials.\19\ Surface waters can be
contaminated if fluids or gases rise from the well and spill
onto the land or percolate into the soil. A 2011 study of 185
groundwater contamination incidents in Ohio from 1983 to 2007
found 41 incidents resulted from leakage by orphaned wells.\20\
Methane leaks from undocumented abandoned wells can also cause
safety hazards, as seen in a 2007 explosion at a Colorado
construction site, a 2011 explosion that destroyed a home in
Pennsylvania, and a 2014 evacuation of an Ohio elementary
school.\21\
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\18\See, e.g., Jacqueline Ho et al., Resources for the Future,
Plugging the Gaps in Inactive Well Policy 7 (2016), https://
media.rff.org/documents/RFF-Rpt-PluggingInactiveWells.pdf.
\19\See e.g., EPA, EPA-600-R-16-236Fa, Hydraulic Fracturing for Oil
and Gas: Impacts from the Hydraulic Fracturing Water Cycle on Drinking
Water Resources in the United States 3-11 n.1, 7-20 n.3 (2016),
available at https://cfpub.epa.gov/ncea/hfstudy/
recordisplay.cfm?deid=332990.
\20\Scott Kell, Ground Water Prot. Council, State Oil and Gas
Agency Groundwater Investigations and Their Role in Advancing
Regulatory Reforms 2, 37 (2011), https://www.atlanticaenergy.org/pdfs/
natural_gas/Environment/
State%20Oil%20&%20Gas%20Agency%20Groundwater%20Investigations_US_GWProCo
ucil.pdf.
\21\Sophie Quinton, Why `Orphan' Oil and Gas Wells Are a Growing
Problem for States, PEW Charitable Trusts (July 9, 2018), https://
www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2018/07/09/
why-orphan-oil-and-gas-wells-are-a-growing-problem-for-states.
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Both environmental advocates and state regulators support
distributing federal funds to states to plug and reclaim
orphaned wells, as doing so would help with longstanding
ecological issues while creating jobs for laid-off oil and gas
workers. In May 2020, the IOGCC asked the Trump administration
for stimulus funds ``to help keep oil and gas crews working
during the current crisis'' by plugging abandoned wells.\22\
Analysts have estimated that this work could create between
5,000 and 24,000 jobs,\23\ while the Ohio River Valley
Institute estimated in an April 2021 report that plugging the
538,000 abandoned oil and gas wells just in West Virginia,
Pennsylvania, Ohio, and Kentucky over 20 years could create
around 15,151 jobs, roughly equal to the number of jobs lost in
the oil and gas industry in the region over the five years
preceding the pandemic.\24\
---------------------------------------------------------------------------
\22\Nichola Groom, States Ask Trump Administration to Pay Laid Off
Oil Workers to Plug Abandoned Wells, Reuters (May 6, 2020), https://
www.reuters.com/article/us-global-oil-usa-wells/states-ask-trump-
administration-to-pay-laid-off-oil-workers-to-plug-abandoned-wells-
idUSKBN22I2KA.
\23\See Kate Kelly & Jenny Rowland-Shea, How Congress Can Help
Energy States Weather the Oil Bust During the Coronavirus Pandemic,
Ctr. for Am. Progress (Apr. 29, 2020), https://
www.americanprogress.org/issues/green/reports/2020/04/29/484158/
congress-can-help-energy-states-weather-oil-bust-coronavirus-pandemic/.
\24\Ted Boettner, Ohio River Valley Inst., Repairing the Damage
From Hazardous Abandoned Oil & Gas Wells 8 (2021), https://
ohiorivervalleyinstitute.org/wp-content/uploads/2021/04/Repairing-the-
Damage-from-Hazardous-AOG-Wells-Report-1.pdf.
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H.R. 2415 would authorize funds to plug and reclaim
orphaned oil and gas wells spread across the country that leak
methane, contaminate groundwater, and pose safety risks. The
bill would authorize $8 billion over ten years for cleaning up
orphaned wells on public, tribal, state, and privately-owned
lands. Of these funds, $400 million is for DOI and the
Department of Agriculture to address wells on lands managed by
the respective agencies, $300 million is for the Bureau of
Indian Affairs to issue grants to tribes, and $7.25 billion is
for three types of state grants to address wells on state and
private lands.
The bill would permit federal land managers, tribes, and
states to use the funds for a variety of activities, including
identifying and inventorying orphaned wells, plugging wells,
remediating impacted soils and species habitat, reclaiming well
sites, removing infrastructure, and identifying parties that
may be liable for cleanup costs. DOI would manage the grant-
making process, and states would be eligible for grants after
submitting detailed applications. Each state that receives
funding would be required to submit a yearly report to DOI
detailing how the grant was used and the results of the work.
H.R. 2415 also contains two significant regulatory
enhancements: increasing BLM's minimum bond requirements and
requiring oil and gas operators to pay an annual fee for idled
wells on public land.
H.R. 3684, the Infrastructure Investment and Jobs Act\25\
(the ``IIJA,'' sometimes called the Bipartisan Infrastructure
Framework or ``BIF'' or the Bipartisan InfrastructureLaw or
``BIL''), signed into law on November 15, 2021, largely enacted
the substance of H.R. 2415, by including more than $4.7 billion
over nine years to plug and reclaim orphaned wells on federal,
tribal, state, and privately owned lands.\26\ On May 25, 2022,
DOI announced an initial $33 million (of $250 million total) in
IIJA funding for projects to address 277 high-priority sites on
federal public lands, national parks, national wildlife refuges
and national forests.\27\ On August 25, 2022, DOI announced a
first round of $560 million (of $4.275 billion) in grants to
states to address sites in 24 states, and it confirmed that the
Department is engaged in tribal consultations and listening
sessions prior to opening applications for the $150 million
tribal grant program.\28\
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\25\Pub. L. No. 117-58, 135 Stat. 429 (2021), https://
uscode.house.gov/statviewer.htm?volume=135&page=429.
\26\Pub. L. No. 117-58, Sec. 40,601, 135 Stat. at 1080, https://
uscode.house.gov/statviewer.htm?volume=135&page=1080.
\27\DOI, Press Release, Biden-Harris Administration Announces $33
Million Infrastructure Investment to Address Legacy Pollution, Spur
Good-Paying Jobs on Public Lands (May 25, 2022) (last edited May 27,
2022), https://www.doi.gov/pressreleases/biden-harris-administration-
announces-33-million-infrastructure-investment-address.
\28\DOI, Press Release, Through President Biden's Bipartisan
Infrastructure Law, 24 States Set to Begin Plugging Over 10,000
Orphaned Wells (Aug. 25, 2022) (last edited Aug. 31, 2022), https://
www.doi.gov/pressreleases/through-president-bidens-bipartisan-
infrastructure-law-24-states-set-begin-plugging.
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Committee Action
H.R. 2415 was introduced on April 8, 2021, by
Representative Teresa Leger Fernandez (D-NM). The bill was
referred solely to the Committee on Natural Resources, and
within the Committee to the Subcommittee on Energy and Mineral
Resources. On April 15, 2021, the Subcommittee held a hearing
on the bill. On May 26, 2021, the Natural Resources Committee
met to consider the bill. The Subcommittee was discharged by
unanimous consent. Rep. Leger Fernandez offered an amendment in
the nature of a substitute. Rep. Leger Fernandez offered an
amendment designated Leger Fernandez #1 to the amendment in the
nature of a substitute. The amendment was agreed to by voice
vote. Rep. Yvette Herrell (R-NM) offered an amendment
designated Herrell #1 to the amendment in the nature of a
substitute. The amendment was not agreed to by a roll call vote
of 16 yeas and 23 nays, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rep. Matt Rosendale (R-MT) offered an amendment designated
Rosendale #1 to the amendment in the nature of a substitute.
The amendment was not agreed to by a roll call vote of 17 yeas
and 23 nays, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rep. Pete Stauber (R-MN) offered an amendment designated
Stauber #1 to the amendment in the nature of a substitute. The
amendment was not agreed to by a roll call vote of 17 yeas and
23 nays, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rep. Stauber offered an amendment designated Stauber #2 to
the amendment in the nature of a substitute. The amendment was
not agreed to by a roll call vote of 17 yeas and 22 nays, as
follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rep. Stauber offered an amendment designated Stauber #3 to
the amendment in the nature of a substitute. The amendment was
not agreed to by a roll call vote of 16 yeas and 23 nays, as
follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rep. Garret Graves (R-LA) offered an amendment designated
Graves #1 to the amendment in the nature of a substitute. The
amendment was not agreed to by a roll call vote of 16 yeas and
22 nays, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rep. Graves offered an amendment designated Graves #2 to
the amendment in the nature of a substitute. The amendment was
not agreed to by a roll call vote of 16 yeas and 23 nays, as
follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rep. Graves offered an amendment designated Graves #85 to
the amendment in the nature of a substitute. The amendment was
withdrawn. Rep. Graves offered an amendment designated Graves
#88 to the amendment in the nature of a substitute. The
amendment was not agreed to by a roll call vote of 17 yeas and
20 nays, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rep. Graves offered an amendment designated Graves #89 to
the amendment in the nature of a substitute. The amendment was
withdrawn. The amendment in the nature of a substitute offered
by Rep. Leger Fernandez, as amended, was agreed to by voice
vote. The bill, as amended, was adopted and ordered favorably
reported to the House of Representatives by a roll call vote of
22 yeas and 17 nays, as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Hearings
For the purposes of clause 3(c)(6) of House rule XIII, the
following hearing was used to develop or consider this measure:
hearing by the Subcommittee on Energy and Mineral Resources
held on April 15, 2021.
Section-by-Section Analysis
Section 1. Short title
Section 1 provides that this Act may be cited as the
``Orphaned Well Cleanup and Jobs Act of 2021.''
Section 2. Orphaned well site plugging, remediation, and restoration
Section 2 amends the Energy Policy Act of 2005 to include a
new program for the remediation of orphaned oil and gas wells.
Subsection (a) Federal program
Subsection (a) directs the Secretary of the Interior, in
coordination with the Secretary of Agriculture and affected
tribes, to establish a program to reclaim orphaned wells on
federal land within 180 days of enactment. The federal program
must include processes for identifying and inventorying
orphaned wells on federal land, ranking orphaned wells by
priority, plugging wells, reclaiming well pads and roads,
restoring soil and native species, removing infrastructure,
identifying parties potentially liable, supporting research and
development, measuring water contamination, and reducing the
effect of orphaned wells on environmental justice communities.
Within 180 days of enactment, the Secretary of the Interior
must issue a final rule defining the term ``orphaned well'' for
federal and tribal land. Within 180 days, BLM must also
establish a new definition for ``idled well,'' replacing the
Energy Policy Act of 2005 definition that requires wells to be
non-operational for seven years. The Secretary of the Interior
is required to consult affected tribes, the Secretary of
Energy, and the IOGCC and work cooperatively with the Secretary
of Agriculture and states, to carry out the federal well-
plugging program.
SUBSECTION (B) STATE ORPHANED WELL SITE PLUGGING, REMEDIATION, AND
RESTORATION
Subsection (b) outlines the new program for remediating
orphaned oil and gas wells on state- and privately-owned land.
States should use provided funds to plug and reclaim orphaned
wells on state- and privately-owned land, identify and
characterize wells, rank those wells based on harm, make
information on the use of funds publicly available, measure and
track emissions, measure and track water contamination,
remediate soil and restore habitat, and reduce effects of
orphaned wells on environmental justice communities. No more
than 10 percent of a state's funding may be used for
administering the program.
There are two tiers for ``initial grants'' to states:
Each state that is a member of the IOGCC can
receive up to $25 million if they have at least one
documented orphaned well and certify that they can
obligate 90 percent of funds within 180 days and
describe how the funding will help put people back to
work who have lost their jobs since March 1, 2020.
Up to $5 million is available to states that
don't qualify for a grant under the previous paragraph
but certify that they have an orphaned well cleanup
program, can start an orphaned well cleanup program, or
will use the funding to prepare an application for a
formula grant.
After two years, any unspent funds will be returned to the
Secretary to plug and reclaim wells on federal land. States are
required to submit a publicly available report to the Secretary
within 15 months of receiving funds detailing how the state
adhered to the requirements.
In addition to initial grants, the Secretary must establish
a formula for the distribution of ``formula grants'' to states
based on job losses in the oil and gas industry since March 1,
2020, the number of documented oil and gas wells, and the
amount of oil and gas produced in 2019 as determined by the
Energy Information Administration. Within 30 days of the
deadline for states to notify the Secretary of the Interior
that they intend to apply for a formula grant, the Secretary
will publish on a public website the amount each state is
eligible to receive.
States may apply to receive formula grant funding by
submitting an application that includes a description of the
state's orphaned well program, the activities that will be
carried out with the grant money, the estimates of the job
creation impact of the grant, and other details. States have
five years to obligate formula grant funds. The Secretary is
required to consult with the EPA Administrator, the Secretary
of Energy, and the IOGCC when determining the eligibility of a
state to receive funds. The Secretary is required to issue a
formula grant to a state no later than 60 days after approving
that state's application.
This section also establishes the administration of
``discretionary grants,'' which may be awarded by the Secretary
beginning six months after the first initial grant is awarded.
States may receive up to three $20 million regulatory
improvement grants, with one grant allowed for states having
done each of the following:
1. Strengthened regulations restricting methane
emissions from oil and gas operations;
2. Strengthened plugging and abandonment rules to
protect groundwater from oil and gas operations, or
3. Made statutory or regulatory improvements designed
to reduce future orphaned well burdens, including but
not limited to bonding requirements or other financial
assurance reforms, alternative funding mechanisms for
orphaned well programs, or reforms to well transfer and
temporary abandonment programs.
The Secretary can also issue one ``matching grant'' per
state per fiscal year between 2021 and 2031 for grants equal to
the amount of additional funding spent by a state on cleaning
up orphaned wells and associated facilities in a given fiscal
year, compared to the average the state spent on that activity
between 2010 and 2019. The total amount of matching grant
funding a state receives may not exceed $30 million. To prevent
regulatory backsliding, this section requires that if a state
that receives a regulatory improvement grant and reverses the
improvement during the ten years following the state's
acceptance of the grant, the state must reimburse the Interior
Secretary for those funds. Each state that received a grant
under this program must submit a report to the Secretary each
year describing how the grant was used and the results of the
work.
Subsection (c) Tribal orphaned well site plugging,
remediation, and restoration
Subsection (c) outlines the tribal orphaned well site
plugging, remediation, and restoration program within the
Bureau of Indian Affairs. When issuing grants to tribes, the
Secretary is required to consider the unemployment rate of the
tribe on the date of the grant application, the number of
documented orphaned wells, and the projected cost to reclaim
such wells.
This subsection details the application requirements for
tribes to receive grants. Tribes may use up to 15 percent of
grant funding for administrative purposes. The Secretary must
grant or deny an application within 60 days of receipt, and
tribes must obligate funds within eight years of receiving
them. Tribes can request the Department of the Interior conduct
the plugging, remediation, and restoration work for tribal
orphaned wells under the federal program established in
subsection (a).
Subsection (d) Technical assistance
Subsection (d) updates Sec. 349(g) of the Energy Policy Act
of 2005 and allows the Secretary of Energy to work with the
IOGCC and the Secretary of the Interior to provide technical
assistance to federal land management agencies, states, and
tribes to help address orphaned oil and gas wells.
Subsection (e) Report to Congress
Subsection (e) requires that the Secretary submit a report
to Congress each year that provides the following:
An updated inventory of orphaned wells and
wells at-risk of becoming orphaned;
An estimate of the amount of methane and
other gases emitted from orphaned wells and an estimate
of the emissions reduced as a result of plugging wells;
The acreage of habitat restored; and
The number of jobs created and saved through
plugging and reclaiming orphaned wells.
Subsection (f) Idled well fees
Subsection (f) requires the Secretary of the Interior to
issue regulations requiring operators to pay an annual fee for
idled wells on federal land. These fees are based on the
duration a well has been idled. Owners must pay this fee by May
1 of each year. The Secretary can charge civil penalties if
operators fail to pay the fees. Idled well fees must be
adjusted for inflation at least once every four years. 50
percent of funds from idled well fees will be used for
inventorying, plugging, and remediating orphaned wells on
federal land, and 50 percent of funds will be used by BLM to
carry out inspections on oil and gas operations on federal
land.
Subsection (g) Savings clauses and prevailing wage
requirements
Subsection (g) ensures that this Act does not absolve
potentially responsible parties of responsibility for cleaning
up orphaned well sites, impact state liability laws, or affect
any of the federal government's responsibility to tribes. The
subsection also requires that all employees of projects
authorized under this Act are paid no less than local
prevailing wages.
Subsection (h) American iron, steel, and manufactured
products
Subsection (h) requires, to the extent practicable, that
funds not be used for an orphaned well plugging or remediation
project unless all of the iron and steel products and iron and
steel manufactured products used in the project are produced in
the United States. Specifically, the subsection authorizes the
Secretary, at the request of an applicant, to waive the
prohibition if its enforcement would be inconsistent with the
public interest; if the necessary products are not produced in
the United States in adequate quantities or quality; or if the
requirement would increase the cost of the project by more than
25 percent. Before granting any such waiver, the Secretary must
make the waiver request available to the public online, with
all related information, and provide no fewer than 15 days for
informal public input on the request.
Subsection (i) Definitions
Subsection (i) defines key terms and provides temporary
definitions for ``Idled Well'' and ``Orphaned Well'' until the
Secretary of the Interior updates those definitions by
regulation.
Subsection (j) Authorization of appropriations
Subsection (j) authorizes the appropriation of funds to the
Secretary of the Interior for use until all funds have been
obligated, but no later than FY2031:
$400,000,000 to carry out the work on
federal land under subsection (a).
$1,500,000,000 for initial grants under
subsection (b), with funds left over from this round to
be carried over to the discretionary grants under
subsection (b).
$3,500,000,000 for formula grants under
subsection (b).
$2,250,000,000 for discretionary grants
under subsection (b).
$300,000,000 for the tribal grant program
under subsection (c).
This subsection also authorizes $48 million for the
Secretary of Energy to conduct research and development
activities, in cooperation with the IOGCC, to assist federal
land managers, states, and tribes in identifying and
characterizing undocumented orphaned wells and mitigating the
environmental risks of these orphaned wells.
The subsection also authorizes $2,000,000 to the IOGCC to
assist the Secretary of the Interior and the Secretary of
Energy in carrying out the Act.
Total authorizations in the bill equal $8 billion.
Section 3. Amendment to the Mineral Leasing Act
Section 3 eliminates the ability for a company to provide a
single bond to cover all leases or operations on public lands
nationwide and increases minimum bonding amounts for a single
lease from $10,000 to $150,000, and for all of an operator's
leases in a state from $150,000 to $500,000.
Committee Oversight Findings and Recommendations
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Natural Resources' oversight findings and
recommendations are reflected in the body of this report.
Compliance With House Rule XIII and Congressional Budget Act
1. Cost of Legislation and the Congressional Budget Act.
With respect to the requirements of clause 3(c)(2) and (3) of
rule XIII of the Rules of the House of Representatives and
sections 308(a) and 402 of the Congressional Budget Act of
1974, as well as clause 3(d) of rule XIII of the Rules of the
House of Representatives, the Committee has received the
following estimate for the bill from the Director of the
Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 6, 2021.
Hon. Raul M. Grijalva,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2415, the Orphaned
Well Cleanup and Jobs Act of 2021.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Janani
Shankaran.
Sincerely,
Phillip L. Swagel,
Director.
Enclosure.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The bill would:
Authorize appropriations totaling $8 billion
in 2021 for the Department of the Interior (DOI) to
establish an orphaned-well remediation program on
federal land and to provide grants to states and tribes
for similar purposes
Direct DOI to collect fees for idled oil and
gas wells located on onshore federal land and to spend
such collections without further appropriation
Estimated budgetary effects would mainly stem from:
Spending of the authorized appropriations
Collection and spending of the fees
Areas of significant uncertainty include:
Estimating the number of idled wells and the
amount of fees that would be collected
Bill summary: H.R. 2415 would authorize appropriations
totaling $8 billion in fiscal year 2021 for the Department of
the Interior (DOI) to establish an orphaned-well remediation
program on federal land and to provide grants to states and
Indian tribes for similar purposes. The bill also would direct
DOI to collect fees for idled (or nonoperational) oil and gas
wells located on onshore federal land and would authorize the
department to spend those fees without further appropriation
for reclamation and related administration.
Estimated Federal cost: The estimated budgetary effect of
H.R. 2415 is shown in Table 1. The costs of the legislation
fall primarily within budget function 300 (natural resources
and environment).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 2415
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
------------------------------------------------------------------------------------------------
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2022-2026 2022-2031
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increases in Direct Spending
Estimated Budget Authoritya............................ 0 0 0 0 0 0 0 0 0 0 0 0
Estimated Outlays...................................... -25 -20 -10 -10 -5 0 0 0 0 0 -70 -70
Increases in Spending Subject to Appropriation
Authorizationb......................................... 8,000 0 0 0 0 0 0 0 0 0 8,000 8,000
Estimated Outlays...................................... 455 1,925 1,895 1,895 1,545 255 25 5 0 0 7,715 8,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
CBO estimates that enacting H.R. 2415 would increase revenues by an insignificant amount over the 2021-2031 period.
\a\Enacting the bill would increase offsetting receipts that could be subsequently spent without appropriation action. As a result, the budget authority
nets to zero. Because outlays lag collections, net spending would be reduced in the first five years.
\b\The bill would authorize the appropriation of $8 billion in fiscal year 2021. Because fiscal year 2021 has ended, CBO has assumed for this estimate
that the amounts would be provided in 2022.
Basis of estimate: For this estimate, CBO assumes the
legislation will be enacted by the end of calendar year 2021.
Estimated spending is based on historical spending patterns for
similar programs.
Spending subject to appropriation: H.R. 2415 would
authorize the appropriations totaling $8 billion in fiscal year
2021. Because that fiscal year has ended, CBO assumes for this
estimate that those amounts would be provided in 2022. On that
basis and assuming appropriation of the specified amounts, CBO
estimates that implementing the bill would cost $7.7 billion
over the 2022-2026 period (see Table 2).
The bill would require states and tribes either to obligate
funds within 2 years to 10 years of their receipt or to
reimburse unobligated amounts to DOI. CBO assumes that states
would obligate the full amounts within the timeframes specified
and that any administrative costs that DOI incurs would be
covered by the amounts authorized.
TABLE 2.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 2415
----------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
------------------------------------------------------------
2022a 2023 2024 2025 2026 2022-2026
----------------------------------------------------------------------------------------------------------------
Federal Program:
Authorization.................................. 400 0 0 0 0 400
Estimated Outlays.............................. 20 40 80 80 80 300
Initial Grants to States:
Authorization.................................. 1,500 0 0 0 0 1,500
Estimated Outlays.............................. 105 375 375 375 270 1,500
Formula Grants to States:
Authorization.................................. 3,500 0 0 0 0 3,500
Estimated Outlays.............................. 245 875 875 875 630 3,500
Regulatory Improvement and Matching Grants to
States:
Authorization.................................. 2,250 0 0 0 0 2,250
Estimated Outlays.............................. 0 400 560 560 560 2,080
Grants to Tribes:
Authorization.................................. 300 0 0 0 0 300
Estimated Outlays.............................. 75 225 0 0 0 300
Department of Energy:
Authorization.................................. 50 0 0 0 0 50
Estimated Outlays.............................. 10 10 5 5 5 35
Total Changes:
Estimated Authorization.................... 8,000 0 0 0 0 8,000
Estimated Outlays.......................... 455 1,925 1,895 1,895 1,545 7,715
----------------------------------------------------------------------------------------------------------------
\a\The bill would authorize appropriations totaling $8 billion in fiscal year 2021. Because fiscal year 2021 has
ended, CBO has assumed for this estimate that the amounts for each activity would be provided in 2022.
Federal program: H.R. 2415 would authorize the
appropriation of $400 million for DOI, in cooperation with the
Department of Agriculture and affected tribes, to establish a
program to plug, remediate, and reclaim orphaned (or abandoned)
oil and gas wells on federal land. DOI would be required to
issue regulations to define and identify orphaned and idled
wells. Based on historical spending patterns for similar
activities, CBO estimates that implementing the provision would
cost $300 million over the 2022-2026 period and $100 million
after 2026.
Grants to States: The bill would authorize appropriations
for three different types of state grants totaling $7.25
billion. Using information from DOI, CBO expects that the
department would make grants available in four annual cycles,
starting in 2022, and that the grants would be fully issued to
states within one year of being awarded.
Initial grants. Of that $7.25 billion, H.R. 2415 would
authorize the appropriation of $1.5 billion for initial grants
to states to plug, remediate, and reclaim orphaned wells on
state and private lands; track methane emissions from wells;
decommission pipelines and infrastructure; and complete other
related activities. A group of 38 member and associate member
states of the Interstate Oil and Gas Compact Commission (IOGCC)
would be eligible to receive up to $25 million each in initial
grants; 12 nonmember states could receive up to $5 million
each. The remaining amounts would be available 18 months after
the first grants are issued for regulatory improvement and
matching grants, as discussed below. CBO estimates that
providing those grants to states would cost $1.5 billion over
the 2022-2026 period.
Formula grants. The bill also would authorize the
appropriation of $3.5 billion for DOI to award grants to states
based on the volume of recent job losses in the oil and gas
industry and on the projected costs to plug and reclaim
orphaned wells. CBO estimates that outlays for the grants would
total $3.5 billion over the 2022-2026 period.
Regulatory improvement and matching grants. In addition to
any amounts remaining after the initial grants are issued, H.R.
2415 would authorize the appropriation of $2.25 billion for DOI
to provide regulatory improvement and matching grants that
would be capped at $90 million per state. To be eligible, a
state would need to regulate gas capture and prohibit venting
and flaring from oil and gas wells, strengthen well-plugging
standards, or implement bonding reform and other funding
mechanisms for orphaned-well programs. CBO estimates that
providing the grants would cost $2.1 billion over the 2022-2026
period; the remaining amounts would be spent after 2026.
Tribal grants: H.R. 2415 would authorize the appropriation
of $300 million for tribal grants to plug, remediate, and
reclaim orphaned wells and to conduct related activities. CBO
expects that those grants would be awarded in 2022 and that
providing them would cost $300 million over the 2022-2026
period.
Department of Energy: The bill would authorize
appropriations totaling $50 million for the Department of
Energy and the IOGCC to conduct related research and
development and to provide technical assistance to DOI, states,
and tribes. Assuming appropriation of the authorized amounts
and based on the timeframes provided under the bill for states
and tribes to obligate the grant funds, CBO estimates that
implementing that provision would cost $35 million over the
2022-2026 period and $15 million after 2026.
Other activities: H.R. 2415 would direct DOI to issue
regulations for idled-well fees. Based on the costs of similar
activities, CBO estimates that any costs incurred by DOI would
be insignificant; any spending would be subject to the
availability of appropriated funds.
Section 3 would increase minimum bond amounts required
under the Mineral Leasing Act. Forfeited bonds from onshore
mineral leasing are recorded in the budget as discretionary
offsetting collections and their spending is subject to
appropriation. Assuming appropriation actions consistent with
previous appropriation bills, CBO expects that any additional
amounts forfeited under H.R. 2415 would be spent soon
thereafter.
Direct spending: CBO estimates that enacting H.R. 2415
would reduce direct spending by $70 million over the 2022-2031
period; those savings would result from the lag between the
collection and spending of idled-well fees, as discussed below.
Idled-well fees. H.R. 2415 would direct DOI to collect
annual fees for idled wells located on onshore federal land as
follows:
$500 for each well considered idle for at
least 1 year but less than 5 years,
$1,500 for each well considered idle for at
least 5 years but less than 10 years,
$3,500 for each well considered idle for at
least 10 years but less than 15 years, and
$7,500 for each well considered idle for at
least 15 years.
Under the bill, a well would be considered idled if it has
been nonoperational for at least two consecutive years and if
there is no anticipated future beneficial use. Thus, a well
that is considered idled for one year has been nonoperational
for three years; a well that is considered idled for five years
has been nonoperational for seven years; and so on. Fee
collections are classified in the budget as offsetting receipts
or reductions in direct spending.
According to DOI, roughly 6,300 onshore wells on federal
land have been nonoperational for at least seven years. DOI
does not collect data on wells that have been nonoperational
for shorter periods, and CBO is unaware of any comprehensive
source of information on such wells. CBO also cannot assess
whether idled wells would have an anticipated future beneficial
use. We expect that the count of idled wells will increase over
time under current law, but that under the bill, some operators
would plug and reclaim idled wells to avoid paying fees. Using
information from DOI, CBO estimates that between 6,000 and
7,000 wells would be subject to fees annually under H.R. 2415.
Receipts would total $350 million over the 2022-2031 period, in
CBO's estimation. Most of that amount would come from wells
considered idle for at least 15 years.
Spending of idled well fees: Under H.R. 2415, the Bureau of
Land Management would be authorized to spend collections from
idled-well fees without further appropriation for orphaned-well
reclamation and related administration. Based on historical
spending patterns for similar activities, CBO estimates that
the agency would spend, on average, about $28 million annually
and $280 million over the 2022-2031 period.
Revenues: Operators who fail to pay the fees would be
subject to civil penalties, which are classified in the budget
as revenues. However, CBO estimates that any penalties
collected would be insignificant over the 2022-2031 period.
Uncertainty: CBO's estimate of fee collections is
uncertain; we cannot forecast with certainty the number of
wells that would be subject to fees under H.R. 2415. The
resulting direct spending also could differ from the estimate.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in Table 3.
TABLE 3.--CBO'S ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF H.R. 2415, THE ORPHANED WELL CLEANUP AND JOBS ACT OF 2021, AS ORDERED REPORTED BY THE
HOUSE COMMITTEE ON NATURAL RESOURCES ON MAY 26, 2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-----------------------------------------------------------------------------------------------------
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2022-2026 2022-2031
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Decrease in the Deficit
Pay-As-You-Go Effect.............................. -25 -20 -10 -10 -5 0 0 0 0 0 -70 -70
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term deficits: None.
Mandates: None.
Estimate prepared by: Federal Costs: Janani Shankaran;
Mandates: Lilia Ledezma.
Estimate reviewed by: Susan Willie, Chief, Natural and
Physical Resources Cost Estimates Unit, H. Samuel Papenfuss,
Deputy Director of Budget Analysis; Theresa Gullo; Director of
Budget Analysis.
2. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goals and
objectives of this bill are to amend the Energy Policy Act of
2005 to require the Secretary of the Interior to establish a
program to permanently plug, remediate, and reclaim orphaned
wells and the surrounding lands and to provide funds to States
and Tribal Governments to permanently plug, remediate, and
reclaim orphaned wells and the surrounding lands.
Earmark Statement
This bill does not contain any Congressional earmarks,
limited tax benefits, or limited tariff benefits as defined
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of
the House of Representatives.
Unfunded Mandates Reform Act Statement
According to CBO, this bill contains no unfunded mandates
as defined by the Unfunded Mandates Reform Act.
Existing Programs
This bill does not establish or reauthorize a program of
the federal government known to be duplicative of another
program. Such program was not included in any report from the
Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139. The state and tribal grants
that would have been established by this bill have now been
enacted into law and are now listed in the most recent Catalog
of Federal Domestic Assistance published pursuant to 31 U.S.C.
Sec. 6104 as the Energy Community Revitalization Program (ECRP)
(CFDA No. 15.018). The Catalog does not identify other programs
as related to that listing.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
access to public services or accommodations within the meaning
of section 102(b)(3) of the Congressional Accountability Act.
The Committee finds that the legislation's provisions relating
to the terms and conditions of employment relate only to the
wages paid in carrying out projects funded by the bill. Because
the bill does not provide funding for projects to be carried
out by the legislative branch, these provisions are
inapplicable to it.
Preemption of State, Local, or Tribal Law
Any preemptive effect of this bill over state, local, or
tribal law is intended to be consistent with the bill's
purposes and text and the Supremacy Clause of Article VI of the
U.S. Constitution.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
ENERGY POLICY ACT OF 2005
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Energy
Policy Act of 2005''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
Sec. 1. Short title; table of contents.
* * * * * * *
Subtitle E--Production Incentives
* * * * * * *
[Sec. 349. Orphaned, abandoned, or idled wells on Federal land.]
Sec. 349. Orphaned well site plugging, remediation, and restoration.
* * * * * * *
TITLE III--OIL AND GAS
* * * * * * *
Subtitle E--Production Incentives
* * * * * * *
[SEC. 349. ORPHANED, ABANDONED, OR IDLED WELLS ON FEDERAL LAND.
[(a) In General.--The Secretary, in cooperation with the
Secretary of Agriculture, shall establish a program not later
than 1 year after the date of enactment of this Act to
remediate, reclaim, and close orphaned, abandoned, or idled oil
and gas wells located on land administered by the land
management agencies within the Department of the Interior and
the Department of Agriculture.
[(b) Activities.--The program under subsection (a) shall--
[(1) include a means of ranking orphaned, abandoned,
or idled wells sites for priority in remediation,
reclamation, and closure, based on public health and
safety, potential environmental harm, and other land
use priorities;
[(2) provide for identification and recovery of the
costs of remediation, reclamation, and closure from
persons or other entities currently providing a bond or
other financial assurance required under State or
Federal law for an oil or gas well that is orphaned,
abandoned, or idled; and
[(3) provide for recovery from the persons or
entities identified under paragraph (2), or their
sureties or guarantors, of the costs of remediation,
reclamation, and closure of such wells.
[(c) Cooperation and Consultations.--In carrying out the
program under subsection (a), the Secretary shall--
[(1) work cooperatively with the Secretary of
Agriculture and the States within which Federal land is
located; and
[(2) consult with the Secretary of Energy and the
Interstate Oil and Gas Compact Commission.
[(d) Plan.--Not later than 1 year after the date of enactment
of this Act, the Secretary, in cooperation with the Secretary
of Agriculture, shall submit to Congress a plan for carrying
out the program under subsection (a).
[(e) Idled Well.--For the purposes of this section, a well is
idled if--
[(1) the well has been nonoperational for at least 7
years; and
[(2) there is no anticipated beneficial use for the
well.
[(f) Federal Reimbursement for Orphaned Well Reclamation
Pilot Program.--
[(1) Reimbursement for remediating, reclaiming, and
closing wells on land subject to a new lease.--The
Secretary shall carry out a pilot program under which,
in issuing a new oil and gas lease on federally owned
land on which 1 or more orphaned wells are located, the
Secretary--
[(A) may require, other than as a condition
of the lease, that the lessee remediate,
reclaim, and close in accordance with standards
established by the Secretary, all orphaned
wells on the land leased; and
[(B) shall develop a program to reimburse a
lessee, through a royalty credit against the
Federal share of royalties owed or other means,
for the reasonable actual costs of remediating,
reclaiming, and closing the orphaned wells
pursuant to that requirement.
[(2) Reimbursement for reclaiming orphaned wells on
other land.--In carrying out this subsection, the
Secretary--
[(A) may authorize any lessee under an oil
and gas lease on federally owned land to
reclaim in accordance with the Secretary's
standards--
[(i) an orphaned well on unleased
federally owned land; or
[(ii) an orphaned well located on an
existing lease on federally owned land
for the reclamation of which the lessee
is not legally responsible; and
[(B) shall develop a program to provide
reimbursement of 100 percent of the reasonable
actual costs of remediating, reclaiming, and
closing the orphaned well, through credits
against the Federal share of royalties or other
means.
[(3) Regulations.--The Secretary may issue such
regulations as are appropriate to carry out this
subsection.
[(g) Technical Assistance Program for Non-Federal Land.--
[(1) In general.--The Secretary of Energy shall
establish a program to provide technical and financial
assistance to oil and gas producing States to
facilitate State efforts over a 10-year period to
ensure a practical and economical remedy for
environmental problems caused by orphaned or abandoned
oil and gas exploration or production well sites on
State or private land.
[(2) Assistance.--The Secretary of Energy shall work
with the States, through the Interstate Oil and Gas
Compact Commission, to assist the States in quantifying
and mitigating environmental risks of onshore orphaned
or abandoned oil or gas wells on State and private
land.
[(3) Activities.--The program under paragraph (1)
shall include--
[(A) mechanisms to facilitate identification,
if feasible, of the persons currently providing
a bond or other form of financial assurance
required under State or Federal law for an oil
or gas well that is orphaned or abandoned;
[(B) criteria for ranking orphaned or
abandoned well sites based on factors such as
public health and safety, potential
environmental harm, and other land use
priorities;
[(C) information and training programs on
best practices for remediation of different
types of sites; and
[(D) funding of State mitigation efforts on a
cost-shared basis.
[(h) Authorization of Appropriations.--
[(1) In general.--There are authorized to be
appropriated to carry out this section $25,000,000 for
each of fiscal years 2006 through 2010.
[(2) Use.--Of the amounts authorized under paragraph
(1), $5,000,000 are authorized for each fiscal year for
activities under subsection (f).
[(i) Federally Drilled Wells.--Out of any amounts in the
Treasury not otherwise appropriated, $10,000,000 for fiscal
year 2014, $36,000,000 for fiscal year 2015, and $4,000,000 for
fiscal year 2019 shall be made available to the Secretary,
without further appropriation and to remain available until
expended, to remediate, reclaim, and close abandoned oil and
gas wells on current or former National Petroleum Reserve
land.]
SEC. 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 and the States within which Federal
land is located; and
(B) consult with affected Indian Tribes, 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.
(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 (II) 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 (i)(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--
(AA)
requires, or
will require by
the date that
is not later
than five years
after the date
of enactment of
the Orphaned
Well Cleanup
and Jobs Act of
2021, the
operator of
each well
subject to
regulation by
the State to
capture (which
such term means
the physical
containment of
gas for
transportation
to market or
productive use,
including
reinjection and
other on-site
uses) at least
98 percent of
all gas
produced each
year from each
such well; and
(BB)
prohibits, or
will prohibit
by the date
that is not
later than five
years after the
date of
enactment of
the Orphaned
Well Cleanup
and Jobs Act of
2021, venting
and flaring of
gas produced
from each such
well, except in
the case of
emergencies or
equipment
failures as
defined under
the applicable
law of such
State.
(bb) During the
period of 10 years that
precedes the date on
which the State applies
for a grant under this
paragraph, the State
strengthened its
plugging standards and
procedures to ensure
that wells located in
the State are plugged
in an effective manner
that protects
groundwater and other
natural resources,
public health and
safety, and the
environment.
(cc) The State has
made improvements to
State programs designed
to prevent future
orphaned well burdens,
such as 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, excluding confidential or
sensitive Tribal trust or business information
(as determined by the Secretary);
(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 the number of documented
orphaned wells on the land of the Indian Tribe and the
projected cost to permanently plug and reclaim such
wells.
(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 15 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) 8 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 8 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) American Iron, Steel, and Manufactured Products.--
(1) Definitions.--In this subsection:
(A) Iron or steel manufactured product.--The
term ``iron or steel manufactured product''
includes any construction material or end
product (as those terms are defined in subpart
25.003 of the Federal Acquisition Regulation)
that does not otherwise qualify as an iron or
steel product, including--
(i) an electrical component;
(ii) a non-ferrous building material,
including--
(I) aluminum and
polyvinylchloride;
(II) glass;
(III) fiber optics;
(IV) plastic;
(V) wood;
(VI) masonry;
(VII) rubber;
(VIII) manufactured stone;
and
(IX) any other non-ferrous
metals; and
(iii) an unmanufactured construction
material.
(B) Produced in the united states.--
(i) In general.--The term ``produced
in the United States''--
(I) with respect to an iron
or steel product or an iron or
steel manufactured product,
means that all manufacturing
processes for, and materials
and components of, the iron or
steel product or iron or steel
manufactured product, from the
initial melting stage through
the application of coatings,
occurred in the United States;
and
(II) with respect to an iron
or steel manufactured product,
means that--
(aa) the iron or
steel manufactured
product was
manufactured in the
United States; and
(bb) the cost of the
components of the iron
or steel manufactured
product that were
mined, produced, or
manufactured in the
United States is
greater than 60 percent
of the total cost of
the components of the
iron or steel
manufactured product.
(ii) Exclusions.--The term ``produced
in the United States'', with respect to
an iron or steel product or iron or
steel manufactured product, does not
include an iron or steel product or an
iron or steel manufactured product the
materials and components of which were
manufactured--
(I) abroad from semi-finished
steel or iron from the United
States; or
(II) in the United States
from semi-finished steel or
iron of foreign origin.
(2) Requirement.--Funds made available under this
section may not be used for an orphaned well plugging
or remediation project unless all of the iron and steel
products and steel manufactured products used in the
project are produced in the United States.
(3) Waiver.--
(A) In general.--On request of the recipient
of a grant under this section, the Secretary
may grant for the project of the recipient of
the grant a waiver of the requirement described
in paragraph (2) if the Secretary finds that--
(i) the application of paragraph (2)
would be inconsistent with the public
interest;
(ii) iron or steel products or iron
or steel manufactured products are not
produced in the United States--
(I) in sufficient and
reasonably available
quantities; or
(II) of a satisfactory
quality; or
(iii) the inclusion of iron or steel
products or iron or steel manufactured
products in the United States would
increase the cost of the overall
project by greater than 25 percent.
(B) Public notice.--On receipt of a request
for a waiver under subparagraph (A), the
Secretary shall--
(i) make available to the public,
including by electronic means,
including on the official public
website of the Department, on an
informal basis, a copy of the request
and all information available to the
Secretary relating to the request; and
(ii) provide for informal public
input on the request for a period of
not fewer than 15 days before making
with respect to the request the finding
described in subparagraph (A).
(i) 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'' means
the governing body of any Indian or Alaska Native
Tribe, band, nation, pueblo, village, community,
component band, or component reservation individually
identified (including parenthetically) in the most
recent list published pursuant to section 104 of the
Federally Recognized Indian Tribe List Act of 1994 (25
U.S.C. 5131).
(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 minerals, or interests in land or minerals,
owned by any Indian Tribe, the title to which is held
in trust by the United States, or is subject to a
restriction against alienation under the laws of the
United States.
(j) 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.
* * * * * * *
----------
MINERAL LEASING ACT
* * * * * * *
Sec. 17. (a) All lands subject to disposition under this Act
which are known or believed to contain oil or gas deposits may
be leased by the Secretary.
(b)(1)(A) All lands to be leased which are not subject to
leasing under paragraphs (2) and (3) of this subsection shall
be leased as provided in this paragraph to the highest
responsible qualified bidder by competitive bidding under
general regulations in units of not more than 2,560 acres,
except in Alaska, where units shall be not more than 5,760
acres. Such units shall be as nearly compact as possible. Lease
sales shall be conducted by oral bidding, except as provided in
subparagraph (C). Lease sales shall be held for each State
where eligible lands are available at least quarterly and more
frequently if the Secretary of the Interior determines such
sales are necessary. A lease shall be conditioned upon the
payment of a royalty at a rate of not less than 12.5 percent in
amount or value of the production removed or sold from the
lease. The Secretary shall accept the highest bid from a
responsible qualified bidder which is equal to or greater than
the national minimum acceptable bid, without evaluation of the
value of the lands proposed for lease. Leases shall be issued
within 60 days following payment by the successful bidder of
the remainder of the bonus bid, if any, and the annual rental
for the first lease year. All bids for less than the national
minimum acceptable bid shall be rejected. Lands for which no
bids are received or for which the highest bid is less than the
national minimum acceptable bid shall be offered promptly
within 30 days for leasing under subsection (c) of this section
and shall remain available for leasing for a period of 2 years
after the competitive lease sale.
(B) The national minimum acceptable bid shall be $2 per acre
for a period of 2 years from the date of enactment of the
Federal Onshore Oil and Gas Leasing Reform Act of 1987.
Thereafter, the Secretary, subject to paragraph (2)(B), may
establish by regulation a higher national minimum acceptable
bid for all leases based upon a finding that such action is
necessary: (i) to enhance financial returns to the United
States; and (ii) to promote more efficient management of oil
and gas resources on Federal lands. Ninety days before the
Secretary makes any change in the national minimum acceptable
bid, the Secretary shall notify the Committee on Natural
Resources of the United States House of Representatives and the
Committee on Energy and Natural Resources of the United States
Senate. The proposal or promulgation of any regulation to
establish a national minimum acceptable bid shall not be
considered a major Federal action subject to the requirements
of section 102(2)(C) of the National Environmental Policy Act
of 1969.
(C) In order to diversify and expand the Nation's onshore
leasing program to ensure the best return to the Federal
taxpayer, reduce fraud, and secure the leasing process, the
Secretary may conduct onshore lease sales through Internet-
based bidding methods. Each individual Internet-based lease
sale shall conclude within 7 days.
(2)(A)(i) If the lands to be leased are within a special tar
sand area, they shall be leased to the highest responsible
qualified bidder by competitive bidding under general
regulations in units of not more than 5,760 acres, which shall
be as nearly compact as possible, upon the payment by the
lessee of such bonus as may be accepted by the Secretary.
(ii) Royalty shall be 12\1/2\ per centum in amount of value
of production removed or sold from the lease subject to section
17(k)(1)(c).
(iii) The Secretary may lease such additional lands in
special tar sand areas as may be required in support of any
operations necessary for the recovery of tar sands.
(iv) No lease issued under this paragraph shall be
included in any chargeability limitation associated
with oil and gas leases.
(B) For any area that contains any combination of tar sand
and oil or gas (or both), the Secretary may issue under this
Act, separately--
(i) a lease for exploration for and extraction of tar
sand; and
(ii) a lease for exploration for and development of
oil and gas.
(C) A lease issued for tar sand shall be issued using the
same bidding process, annual rental, and posting period as a
lease issued for oil and gas, except that the minimum
acceptable bid required for a lease issued for tar sand shall
be $2 per acre.
(D) The Secretary may waive, suspend, or alter any
requirement under section 26 that a permittee under a permit
authorizing prospecting for tar sand must exercise due
diligence, to promote any resource covered by a combined
hydrocarbon lease.
(3)(A) If the United States held a vested future interest in
a mineral estate that, immediately prior to becoming a vested
present interest, was subject to a lease under which oil or gas
was being produced, or had a well capable of producing, in
paying quantities at an annual average production volume per
well per day of either not more than 15 barrels per day of oil
or condensate, or not more than 60,000 cubic feet of gas, the
holder of the lease may elect to continue the lease as a
noncompetitive lease under subsection (c)(1).
(B) An election under this paragraph is effective--
(i) in the case of an interest which vested after
January 1, 1990, and on or before the date of enactment
of this paragraph, if the election is made before the
date that is 1 year after the date of enactment of this
paragraph;
(ii) in the case of an interest which vests within 1
year after the date of enactment of this paragraph, if
the election is made before the date that is 2 years
after the date of enactment of this paragraph; and
(iii) in any case other than those described in
clause (i) or (ii), if the election is made prior to
the interest becoming a vested present interest.
(C) Notwithstanding the consent requirement referenced in
section 3 of the Mineral Leasing Act for Acquired Lands (30
U.S.C. 352), the Secretary shall issue a noncompetitive lease
under subsection (c)(1) to a holder who makes an election under
subparagraph (A) and who is qualified to hold a lease under
this Act. Such lease shall be subject to all terms and
conditions under this Act that are applicable to leases issued
under subsection (c)(1).
(D) A lease issued pursuant to this paragraph shall continue
so long as oil or gas continues to be produced in paying
quantities.
(E) This paragraph shall apply only to those lands under the
administration of the Secretary of Agriculture where the United
States acquired an interest in such lands pursuant to the Act
of March 1, 1911 (36 Stat. 961 and following).
(c)(1) If the lands to be leased are not leased under
subsection (b)(1) of this section or are not subject to
competitive leasing under subsection (b)(2) of this section,
the person first making application for the lease who is
qualified to hold a lease under this Act shall be entitled to a
lease of such lands without competitive bidding, upon payment
of a non-refundable application fee of at least $75. A lease
under this subsection shall be conditioned upon the payment of
a royalty at a rate of 12.5 percent in amount or value of the
production removed or sold from the lease. Leases shall be
issued within 60 days of the date on which the Secretary
identifies the first responsible qualified applicant.
(2)(A) Lands (i) which were posted for sale under subsection
(b)(1) of this section but for which no bids were received or
for which the highest bid was less than the national minimum
acceptable bid and (ii) for which, at the end of the period
referred to in subsection (b)(1) of this section no lease has
been issued and no lease application is pending under paragraph
(1) of this subsection, shall again be available for leasing
only in accordance with subsection (b)(1) of this section.
(B) The land in any lease which is issued under paragraph (1)
of this subsection or under subsection (b)(1) of this section
which lease terminates, expires, is cancelled or is
relinquished shall again be available for leasing only in
accordance with subsection (b)(1) of this section.
(d) All leases issued under this section, as amended by the
Federal Onshore Oil and Gas Leasing Reform Act of 1987, shall
be conditioned upon payment by the lessee of a rental of not
less than $1.50 per acre per year for the first through fifth
years of the lease and not less than $2 per acre per year for
each year thereafter. A minimum royalty in lieu of rental of
not less than the rental which otherwise would be required for
that lease year shall be payable at the expiration of each
lease year beginning on or after a discovery of oil or gas in
paying quantities on the lands leased.
(e) Competitive and noncompetitive leases issued under this
section shall be for a primary term of 10 years: Provided,
however, That competitive leases issued in special tar sand
areas shall also be for a primary term of ten years. Each such
lease shall continue so long after its primary term as oil or
gas is produced in paying quantities. Any lease issued under
this section for land on which, or for which under an approved
cooperative or unit plan of development or operation, actual
drilling operations were commenced prior to the end of its
primary term and are being diligently prosecuted at that time
shall be extended for two years and so long thereafter as oil
or gas is produced in paying quantities.
(f) At least 45 days before offering lands for lease under
this section, and at least 30 days before approving
applications for permits to drill under the provisions of a
lease or substantially modifying the terms of any lease issued
under this section, the Secretary shall provide notice of the
proposed action. Such notice shall be posted in the appropriate
local office of the leasing and land management agencies. Such
notice shall include the terms or modified lease terms and maps
or a narrative description of the affected lands. Where the
inclusion of maps in such notice is not practicable, maps of
the affected lands shall be made available to the public for
review. Such maps shall show the location of all tracts to be
leased, and of all leases already issued in the general area.
The requirements of this subsection are in addition to any
public notice required by other law.
(g) The Secretary of the Interior, or for National Forest
lands, the Secretary of Agriculture, shall regulate all
surface-disturbing activities conducted pursuant to any lease
issued under this Act, and shall determine reclamation and
other actions as required in the interest of conservation of
surface resources. No permit to drill on an oil and gas lease
issued under this Act may be granted without the analysis and
approval by the Secretary concerned of a plan of operations
covering proposed surface-disturbing activities within the
lease area. The Secretary concerned shall, by rule or
regulation, establish such standards as may be necessary to
ensure that an adequate bond, surety, or other financial
arrangement will be established prior to the commencement of
surface-disturbing activities on any lease, to ensure the
complete and timely reclamation of the lease tract, and the
restoration of any lands or surface waters adversely affected
by lease operations after the abandonment or cessation of oil
and gas operations on the lease. The Secretary concerned shall
review the adequacy of each such bond, surety, or other
financial arrangement anytime a lease issued under this section
is transferred. Each such bond, surety, or other financial
arrangement shall be considered inadequate if such bond,
surety, or other financial arrangement is for less than
$150,000 in the case of an arrangement for an individual
surface-disturbing activity of each entity on an individual oil
or gas lease in a State, or $500,000 in the case of an
arrangement for all surface-disturbing activities of each
entity on all oil and gas leases in a State. The Secretary
shall not issue a lease or leases or approve the assignment of
any lease or leases under the terms of this section to any
person, association, corporation, or any subsidiary, affiliate,
or person controlled by or under common control with such
person, association, or corporation, during any period in
which, as determined by the Secretary of the Interior or
Secretary of Agriculture, such entity has failed or refused to
comply in any material respect with the reclamation
requirements and other standards established under this section
for any prior lease to which such requirements and standards
applied. Prior to making such determination with respect to any
such entity the concerned Secretary shall provide such entity
with adequate notification and an opportunity to comply with
such reclamation requirements and other standards and shall
consider whether any administrative or judicial appeal is
pending. Once the entity has complied with the reclamation
requirement or other standard concerned an oil or gas lease may
be issued to such entity under this Act.
(h) The Secretary of the Interior may not issue any lease on
National Forest System Lands reserved from the public domain
over the objection of the Secretary of Agriculture.
(i) No lease issued under this section which is subject to
termination because of cessation of production shall be
terminated for this cause so long as reworking or drilling
operations which were commenced on the land prior to or within
sixty days after cessation of production are conducted thereon
with reasonable diligence, or so long as oil or gas is produced
in paying quantities as a result of such operations. No lease
issued under this section shall expire because operations or
production is suspended under any order, or with the consent,
of the Secretary. No lease issued under this section covering
lands on which there is a well capable of producing oil or gas
in paying quantities shall expire because the lessee fails to
produce the same unless the lessee is allowed a reasonable
time, which shall be not less than sixty days after notice by
registered or certified mail, within which to place such well
in producing status or unless, after such status is
established, production is discontinued on the leased premises
without permission granted by the Secretary under the
provisions of this Act.
(j) Whenever it appears to the Secretary that lands owned by
the United States are being drained of oil or gas by wells
drilled on adjacent lands, he may negotiate agreements whereby
the United States, or the United States and its lessees, shall
be compensated for such drainage. Such agreements shall be made
with the consent of the lessees, if any, affected thereby. If
such agreement is entered into, the primary term of any lease
for which compensatory royalty is being paid, or any extension
of such primary term, shall be extended for the period during
which such compensatory royalty is paid and for a period of one
year from discontinuance of such payment and so long thereafter
as oil or gas is produced in paying quantities.
(k) If, during the primary term or any extended term of any
lease issued under this section, a verified statement is filed
by any mining claimant pursuant to subsection (c) of section 7
of the Multiple Mineral Development Act of August 13, 1954 (68
Stat. 708), as amended (30 U.S.C. 527), whether such filing
occur prior to enactment of the Mineral Leasing Act Revision of
1960 or thereafter, asserting the existence of a conflicting
unpatented mining claim or claims upon which diligent work is
being prosecuted as to any lands covered by the lease, the
running of time under such lease shall be suspended as to the
lands involved from the first day of the month following the
filing of such verified statement until a final decision is
rendered in the matter.
(l) The Secretary of the Interior shall, upon timely
application therefor, issue a new lease in exchange for any
lease issued for a term of twenty years, or any renewal
thereof, or any lease issued prior to August 8, 1946, in
exchange for a twenty-year lease, such new lease to be for a
primary term of five years and so long thereafter as oil or gas
is produced in paying quantities and at a royalty rate of not
less than 12\1/2\ per centum in amount of value of the
production removed or sold from such leases, except that the
royalty rate shall be 12\1/2\ per centum in amount or value of
the production removed or sold from said leases as to (1) such
leases, or such parts of the lands subject thereto and the
deposits underlying the same, as are not believed to be within
the productive limits of any producing oil or gas deposit, as
such productive limits are found by the Secretary to have
existed on August 8, 1946; and (2) any production on a lease
from an oil or gas deposit which was discovered after May 27,
1941, by a well or wells drilled within the boundaries of the
lease, and which is determined by the Secretary to be a new
deposit; and (3) any production on or allocated to a lease
pursuant to an approved cooperative or unit plan of development
or operation from an oil or gas deposit which was discovered
after May 27, 1941, on land committed to such plan, and which
is determined by the Secretary to be a new deposit, where such
lease, or a lease for which it is exchanged, was included in
such plan at the time of discovery or was included in a duly
executed and filed application for the approval of such plan at
the time of discovery.
(m) For the purpose of more properly conserving the natural
resources of any oil or gas pool, field, or like area, or any
part thereof (whether or not any part of said oil or gas pool,
field, or like area, is then subject to any cooperative or unit
plan of development or operation), lessees thereof and their
representatives may unite with each other, or jointly or
separately with others, in collective adopting and operating
under a cooperative or unit plan of development or operation of
such pool, field, or like area, or any part thereof, whenever
determined and certified by the Secretary of the Interior to be
necessary or advisable in the public interest. The Secretary is
thereunto authorized, in his discretion, with the consent of
the holders of leases involved, to establish, alter, change, or
revoke drilling, producing, rental, minimum royalty, and
royalty requirements of such leases and to make such
regulations with reference to such leases, with like consent on
the part of the lessees, in connection with the institution and
operation of any such cooperative or unit plan as he may deem
necessary or proper to secure the proper protection of the
public interest. The Secretary may provide that oil and gas
leases hereafter issued under this Act shall contain a
provision requiring the lessee to operate under such a
reasonable cooperative or unit plan, and he may prescribe such
a plan under which such lessee shall operate, which shall
adequately protect the rights of all parties in interest,
including the United States.
Any plan authorized by the preceding paragraph which includes
lands owned by the United States may, in the discretion of the
Secretary, contain a provision whereby authority is vested in
the Secretary of the Interior, or any such person, committee,
or State or Federal officer or agency as may be designated in
the plan, to alter or modify from time to time the rate of
prospecting and development and the quantity and rate of
production under such plan. All leases operated under any such
plan approved or prescribed by the Secretary shall be excepted
in determining holdings or control under the provisions of any
section of this Act.
When separate tracts cannot be independently developed and
operated in conformity with an established well-spacing or
development program, any lease, or a portion thereof, may be
pooled with other lands, whether or not owned by the United
States, under a communitization or drilling agreement providing
for an apportionment of production or royalties among the
separate tracts of land comprising the drilling or spacing unit
when determined by the Secretary of the Interior to be in the
public interest, and operations or production pursuant to such
an agreement shall be deemed to be operations or production as
to each such lease committed thereto.
Any lease issued for a term of twenty years, or any renewal
thereof, or any portion of such lease that has become the
subject of a cooperative or unit plan of development or
operation of a pool, field, or like area, which plan has the
approval of the Secretary of the Interior, shall continue in
force until the termination of such plan. Any other lease
issued under any section of this Act which has heretofore or
may hereafter be committed to any such plan that contains a
general provision for allocation of oil or gas shall continue
in force and effect as to the land committed so long as the
lease remains subject to the plan: Provided, That production is
had in paying quantities under the plan prior to the expiration
date of the term of such lease. Any lease heretofore or
hereafter committed to any such plan embracing lands that are
in part within and in part outside of the area covered by any
such plan shall be segregated into separate leases as to the
lands committed and the lands not committed as of the effective
date of unitization: Provided, however, That any such lease as
to the nonunitized portion shall continue in force and effect
for the term thereof but for not less than two years from the
date of such segregation and so long thereafter as oil or gas
is produced in paying quantities. The minimum royalty or
discovery rental under any lease that has become subject to any
cooperative or unit plan of development or operation, or other
plan that contains a general provision for allocation of oil or
gas, shall be payable only with respect to the lands subject to
such lease to which oil or gas shall be allocated under such
plan. Any lease which shall be eliminated from any such
approved or prescribed plan, or from any communitization or
drilling agreement authorized by this section, and any lease
which shall be in effect at the termination of any such
approved or prescribed plan, or at the termination of any such
communitization or drilling agreement, unless relinquished,
shall continue in effect for the original term thereof, but for
not less than two years, and so long thereafter as oil or gas
is produced in paying quantities.
The Secretary of the Interior is hereby authorized, on such
conditions as he may prescribe, to approve operating, drilling,
or development contracts made by one or more lessees of oil or
gas leases, with one or more persons, associations, or
corporations whenever, in his discretion, the conservation of
natural products or the public convenience or necessity may
require it or the interests of the United States may be best
subserved thereby. All leases operated under such approved
operating, drilling, or development contracts, and interests
thereunder, shall be excepted in determining holdings or
control under the provisions of this Act.
The Secretary of the Interior, to avoid waste or to promote
conservation of natural resources, may authorize the subsurface
storage of oil or gas, whether or not produced from federally
owned lands, in lands leased or subject to lease under this
Act. Such authorization may provide for the payment of a
storage fee or rental on such stored oil or gas or, in lieu of
such fee or rental, for a royalty other than that prescribed in
the lease when such stored oil or gas is produced in
conjunction with oil or gas not previously produced. Any lease
on which storage is so authorized shall be extended at least
for the period of storage and so long thereafter as oil or gas
not previously produced is produced in paying quantities.
(n)(1)(A) The owner of (1) an oil and gas lease issued prior
to the date of enactment of the Combined Hydrocarbon Leasing
Act of 1981 or (2) a valid claim to any hydrocarbon resources
leasable under this section based on a mineral location made
prior to January 21, 1926, and located within a special tar
sand area shall be entitled to convert such lease or claim to a
combined hydrocarbon lease for a primary term of ten years upon
the filing of an application within two years from the date of
enactment of that Act containing an acceptable plan of
operations which assures reasonable protection of the
environment and diligent development of those resources
requiring enhanced recovery methods of development or mining.
For purposes of conversion, no claim shall be deemed invalid
solely because it was located as a placer location rather than
a lode location or vice versa, notwithstanding any previous
adjudication on that issue.
(B) The Secretary shall issue final regulations to implement
this section within six months of the effective date of this
Act. If any oil and gas lease eligible for conversion under
this section would otherwise expire after the date of this Act
and before six months following the issuance of implementing
regulations, the lessee may preserve his conversion right under
such lease for a period ending six months after the issuance of
implementing regulations by filing with the Secretary, before
the expiration of the lease, a notice of intent to file an
application for conversion. Upon submission of a complete plan
of operations in substantial compliance with the regulations
promulgated by the Secretary for the filing of such plans, the
Secretary shall suspend the running of the term of any oil and
gas lease proposed for conversion until the plan is finally
approved or disapproved. The Secretary shall act upon a
proposed plan of operations within fifteen months of its
submittal.
(C) When an existing oil and gas lease is converted to a
combined hydrocarbon lease, the royalty shall be that provided
for in the original oil and gas lease and for a converted
mining claim, 12\1/2\ per centum in amount or value of
production removed or sold from the lease.
(2) Except as provided in this section, nothing in the
Combined Hydrocarbon Leasing Act of 1981 shall be construed to
diminish or increase the rights of any lessee under any oil and
gas lease issued prior to the enactment of such Act.
(o) Certain Outstanding Oil and Gas.--(1) Prior to the
commencement of surface-disturbing activities relating to the
development of oil and gas deposits on lands described under
paragraph (5), the Secretary of Agriculture shall require,
pursuant to regulations promulgated by the Secretary, that such
activities be subject to terms and conditions as provided under
paragraph (2).
(2) The terms and conditions referred to in paragraph (1)
shall require that reasonable advance notice be furnished to
the Secretary of Agriculture at least 60 days prior to the
commencement of surface disturbing activities.
(3) Advance notice under paragraph (2) shall include each of
the following items of information:
(A) A designated field representative.
(B) A map showing the location and dimensions of all
improvements, including but not limited to, well sites
and road and pipeline accesses.
(C) A plan of operations, of an interim character if
necessary, setting forth a schedule for construction
and drilling.
(D) A plan of erosion and sedimentation control.
(E) Proof of ownership of mineral title.
Nothing in this subsection shall be construed to affect any
authority of the State in which the lands concerned are located
to impose any requirements with respect to such oil and gas
operations.
(4) The person proposing to develop oil and gas deposits on
lands described under paragraph (5) shall either--
(A) permit the Secretary to market merchantable
timber owned by the United States on lands subject to
such activities; or
(B) arrange to purchase merchantable timber on lands
subject to such surface disturbing activities from the
Secretary of Agriculture, or otherwise arrange for the
disposition of such merchantable timber, upon such
terms and upon such advance notice of the items
referred to in subparagraphs (A) through (E) of
paragraph (3) as the Secretary may accept.
(5)(A) The lands referred to in this subsection are those
lands referenced in subparagraph (B) which are under the
administration of the Secretary of Agriculture where the United
States acquired an interest in such lands pursuant to the Act
of March 1, 1911 (36 Stat. 961 and following), but does not
have an interest in oil and gas deposits that may be present
under such lands. This subsection does not apply to any such
lands where, under the provisions of its acquisition of an
interest in the lands, the United States is to acquire any oil
and gas deposits that may be present under such lands in the
future but such interest has not yet vested with the United
States.
(B) This subsection shall only apply in the Allegheny
National Forest.
(p) Deadlines for Consideration of Applications for
Permits.--
(1) In general.--Not later than 10 days after the
date on which the Secretary receives an application for
any permit to drill, the Secretary shall--
(A) notify the applicant that the application
is complete; or
(B) notify the applicant that information is
missing and specify any information that is
required to be submitted for the application to
be complete.
(2) Issuance or deferral.--Not later than 30 days
after the applicant for a permit has submitted a
complete application, the Secretary shall--
(A) issue the permit, if the requirements
under the National Environmental Policy Act of
1969 and other applicable law have been
completed within such timeframe; or
(B) defer the decision on the permit and
provide to the applicant a notice--
(i) that specifies any steps that the
applicant could take for the permit to
be issued; and
(ii) a list of actions that need to
be taken by the agency to complete
compliance with applicable law together
with timelines and deadlines for
completing such actions.
(3) Requirements for deferred applications.--
(A) In general.--If the Secretary provides
notice under paragraph (2)(B), the applicant
shall have a period of 2 years from the date of
receipt of the notice in which to complete all
requirements specified by the Secretary,
including providing information needed for
compliance with the National Environmental
Policy Act of 1969.
(B) Issuance of decision on permit.--If the
applicant completes the requirements within the
period specified in subparagraph (A), the
Secretary shall issue a decision on the permit
not later than 10 days after the date of
completion of the requirements described in
subparagraph (A), unless compliance with the
National Environmental Policy Act of 1969 and
other applicable law has not been completed
within such timeframe.
(C) Denial of permit.--If the applicant does
not complete the requirements within the period
specified in subparagraph (A) or if the
applicant does not comply with applicable law,
the Secretary shall deny the permit.
* * * * * * *
DISSENTING VIEWS
The United States has hundreds of thousands of abandoned
oil and gas wells with unknown or insolvent operators. Oil and
gas operations began in the United States in the 1800s, and
many of the sites in question were abandoned before modern
regulation became widespread a century later.\1\ The scope of
the problem is hard to determine. A 2019 report from the
Interstate Oil & Gas Compact Commission (IOGCC) found that
56,000 orphan wells have been documented, but the number of
undocumented wells could be much higher, totaling anywhere from
210,000 to 746,000.\2\ According to IOGCC, the majority of
orphaned wells occur on private land, ranging from zero
documented wells in one state to 13,266 wells in another.\3\
About half of states and provinces reported fewer than 100
orphan wells.\4\ Currently, the vast majority of operators
complete their reclamation responsibilities, though there are
some bad actors who leave orphaned wells for the Bureau of Land
Management (BLM) to clean up. According to the U.S. Government
Accountability Office (GAO), of the 96,199 wells on federal
lands, only 296 have been left to BLM to reclaim, roughly 0.3
percent of the total.\5\
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\1\Interstate Oil & Gas Compact Commission. Idle and Orphan Oil and
Gas Wells: State and Regulatory Strategies, p. 5, 2019. https://
iogcc.ok.gov/sites/g/files/gmc836/f/documents/2021/
2020_03_04_updated_idle_and_orphan_oil_and_gas_wells_report.pdf.
\2\Id. at 14.
\3\Id. at 12.
\4\Id. at 5.
\5\U.S. Government Accountability Office. Oil and Gas: Bureau of
Land Management Should Address Risks from Insufficient Bonds to Reclaim
Wells. GAO-19-615: Published: Sep 18, 2019. https://www.gao.gov/
products/GAO-19-615.
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This issue was partially addressed in the Infrastructure
Investment and Jobs Act (IIJA), which included a $4.7 billion
investment to plug orphaned wells.\6\ The IIJA created a
federal program to clean up orphaned wells on federal lands, a
Tribal program to clean up orphaned wells on Tribal lands and
also authorized grants for states to clean up orphaned wells on
state and private lands.\7\
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\6\Public Law 117-58.
\7\Id.
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Similar to the IIJA, H.R. 2415, the Orphaned Well Clean-up
and Jobs Act of 2021, aims to address this issue by creating a
program at the Department of the Interior (DOI) that would
provide funding to plug orphaned wells and remediate and
reclaim orphan wells on federal land. However, H.R. 2415
diverges from current law by requiring operators to pay new
fees for idled wells and significantly increasing bonding
requirements for operations on federal land. Unfortunately,
H.R. 2415 takes an extreme partisan path on what should be a
bipartisan issue by also predicating millions of dollars of
grant funding on the adoption of new regulations, including new
bonding requirements and overly stringent methane emissions
regulations. These provisions would be extremely burdensome to
current operators, disincentivizing domestic energy development
during a time when energy prices are at or near historic
levels. If enacted, this legislation would only exacerbate the
current energy crisis by curtailing domestic energy production.
Rather than enacting new burdensome requirements, additional
Congressional oversight is needed to ensure the funds already
authorized for orphan well cleanup in the IIJA are utilized
efficiently and appropriately.
For these reasons, I oppose H.R. 2415.
Bruce Westerman.
[all]