Tackling the Legacy of Orphaned Wells: The Federal Orphaned Well Program in Action

The Federal Orphaned Well Program was established in 2021 under the Bipartisan Infrastructure Law, and provides $4.7 billion in funding to plug, remediate, and reclaim orphaned oil and gas wells and associated facilities on Federal land. It is estimated that greater than 15,000 such wells, with the potential for more to be discovered, are currently located on Federal lands.

Oil and gas operators are required to post bonds to cover the associated costs of reclamation in the event the company is not able to perform that work due to bankruptcy or other causes. The minimum federal bonding values were updated in 2024 under the Oil and Gas Leasing rule to better reflect the actual costs of reclaiming these wells however, the majority of wells are still bonded under the old rule from 1960.  The bonding values from 1960 are insufficient to cover the reclamation costs from these wells leaving the potential for wells to become orphan. As the 2024 rule is implemented over the next three years the number of insufficiently bonded wells will dramatically decrease.

Abandoned wells pose significant dangers, including the risk of groundwater contamination, methane emissions, air pollution, and the potential for sinkholes. Properly sealing these orphaned wells can help prevent the escape of harmful substances, protect groundwater supplies, minimize environmental harm, and enhance public health and safety.

In the spring of 2023, a contracting team from the BLM’s National Operations Center awarded Indefinite Delivery, Indefinite Quantity contracts to multiple firms for services to support the plugging and reclamation of orphaned oil and gas well sites under the Federal Orphaned Well Program. An IDIQ contract is awarded in a situation where the details and/or numbers of specific projects may not be known, but the general nature and likely needs of future projects can be determined. Contractors are selected based on their ability to meet these likely needs. When a specific project is initiated, IDIQ contract holders compete among themselves for the award of a project-specific task order in a streamlined contracting process that saves time and resources for everyone involved.

Since the IDIQs were awarded, task orders for work totaling more than $13 million have been issued for a variety of projects. BLM-specific projects have been conducted or are in progress in Colorado, Arizona, Wyoming, and Montana. The National Park Service, Bureau of Indian Affairs, and U.S. Forest Service have also issued task orders under the IDIQs for orphan well work in their respective bureaus.

The latest reclamation initiative is currently in progress in south central Montana, focusing on the Greeheyco Federal 7-27 oil well located in Carbon County. Drilled in 2012, this well was classified as orphaned in 2021 following several years of non-compliance and the subsequent bankruptcy of its operator.

The contracting process was conducted through the IDIQ award mechanism, facilitated by a collaborative effort from Paul Helland of the Miles City Field Office and Pam Belus, the nationwide Petroleum Engineer Technician training coordinator. The contract was awarded to ASRC Consulting & Environmental Services in September 2024, with on-site reclamation activities commencing Nov. 15 and anticipated to continue through the end of the year. Oversight and coordination of the downhole plugging and surface reclamation efforts at this well site are being led by Travis Meidinger, PET, and Josh Buckmaster, Natural Resource Specialist  from the Miles City Field Office. Final sign off on the reclamation effort is expected during the Summer of 2025.

“Orphaned wells are a legacy that we must address, as they can release methane, pollute groundwater, and pose a hazard to people and wildlife alike,” said BLM Director Tracy Stone-Manning on the orphan well website. “Millions of Americans live within a mile of an orphaned well, and many more may be recreating on federal lands near one. We are pleased to do our part to help fix the problem.”

Learn more about the Federal Orphaned Well Program: https://www.blm.gov/programs/energy-and-minerals/oil-and-gas/federal-orphaned-well-program