Coalition of Oil and Gas States Adopts Texas Resolution Regarding Federal Orphan Well Grant Funding

Taxpayer Funds should be utilized to plug as many orphan wells as possible

This week, the Interstate Oil and Gas Compact Commission (IOGCC) approved Resolution 23.053 offered by Texas Railroad Commissioner Jim Wright urging the U.S. Department of the Interior to follow the statutory language passed by Congress with respect to the Federal Orphan Well Plugging Program in the Infrastructure Investment and Jobs Act.

The IOGCC is comprised of more than 30 oil and gas producing states. The IOGCC resolution further endorses action by Congress to ensure states are provided the necessary flexibility and deference to utilize grant funds in accordance with existing state programs for the purpose of plugging and restoring as many orphan wells and well sites as possible.

“Taxpayer dollars – regardless of their origin – should always be used efficiently and effectively to achieve the desired result. Unfortunately, the Department of the Interior’s draft formula grant guidance fails to adhere to the intent of Congress and would result in fewer wells being plugged than otherwise could be,” said RRC Commissioner Wright. “This resolution, unanimously approved by member states across the political spectrum, reinforces the shared desire for taxpayer funds to be utilized to plug as many orphan wells as possible and asks that the Congressional delegations of IOGCC member states take action to achieve our shared goal of plugging orphan wells.” 

Earlier this year, the RRC submitted comments on the draft formula grant guidance issued by the Department of the Interior.  The RRC maintains the draft guidance place unnecessary administrative burdens that go beyond the scope of the legislation that authorized the well plugging funds. There’s also concern about a proposed phased approach to releasing formula funds, versus releasing the total amount at once.