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DOI offers more orphaned well funding
An additional $3.3 million is now available to Alaska for plugging and remediating old and abandoned oil wells in the state
Alan Bailey for Petroleum News
The U.S. Department of the Interior has announced that is now offering additional funding for the plugging and cleanup of orphaned oil and gas wells under the current phase of the agency's well cleanup funding program. The agency is offering an additional $3.3 million in funding to Alaska. The orphan well cleanup program in Alaska is being managed by the Alaska Oil and Gas Conservation Commission. The funding, which totals $3.5 billion across multiple states, comes from the Infrastructure Investment and Jobs Act, passed by Congress in 2021.
"President Biden's Investing in America agenda is enabling us to confront long-standing environmental injustices by making a historic investment to plug orphaned wells," said Secretary of the Interior Deb Haaland when announcing the new awards. "These investments are good for our climate, for the health of our communities, and for American workers."
Bryan McLellan, senior petroleum engineer for AOGCC, has told Petroleum News that Alaska had initially received a grant of $25 million under the program. Last year, under what DOI refers to as a formula grant, Alaska was awarded an additional $28.3 million, $25 million of which would be immediately available under phase 1 of the formula grant procedure. This year's award of $3.3 million under phase 2 of the formula grant represents the balance of the formula grant award.
ASRC Energy Services under contract Last year, AOGCC contracted with ASRC Energy Services Inc. to conduct the well cleanup projects funded through the DOI program. McLellan commented that, while Alaska has a relatively short list of wells for remediation, the Alaska wells are difficult and expensive to deal with.
The current initial plan is to deal with eight wells in Southcentral Alaska and probably one well on the North Slope this winter, using funds from the initial $25 million grant, McLellan said. The plugging of a second North Slope well had originally been envisaged, but it was later determined that oil company BP had rights to the well and would accept responsibility for the plugging and abandonment. AOGCC has yet to determine which wells to address using the additional funding under the formula grant.
Under a completely separate remediation effort, for a number of years the Bureau of Land Management has been operating a program to cleanup legacy wells drilled under federal government sponsorship on the North Slope between 1944 and 1982 but not properly plugged and abandoned.
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