D22AP00166

The Oklahoma Corporation Commission (OCC) is applying to the United States Department of Interior (DOI) for grant funding to fund the proper closure and cleanup of orphaned wells and well sites. This process consists of well plugging, methane testing detection, and reclamation restoration costs. The funding focus will be on well plugging, methane testing detection, and reclamation restoration costs.

For this grant application, the OCC identified 1,196 documented orphaned wells to be plugged. The OCC ranks orphaned wells based on considerations related to public health and safety, potential environmental harm, and other land use priorities. The total projected budget costs are $33,227,823. This is an estimate based on an orphaned well count of 1,196 for the following tasks: well plugging, methane testing detection, and reclamation costs.

Grant funding will be used instead of state funds. Grant funding will be used in full prior to any state funding. Well plugging by the OCC requires well pluggers to be licensed for pulling pipe and plugging wells. The total estimated well plugging cost is $13,385,823.

Methane testing and detection to measure and report methane emissions from orphaned wells will be contracted out to a third-party administrator. The total estimated methane testing and detection costs are $598,000. This calculation is a result of multiplying the number of orphaned wells (1,196) by the average cost for testing and detection of methane ($500.00). The selected third-party administrator will charge a monthly administrative fee for the administrative costs associated with methane testing and detection activities, such as data collection and reporting requirements. The OCC has estimated administrative costs to be $2,500,000. This is the allowable 10% of potential funds to be received ($25M). This cost represents the administrative cost of the third-party administrator to manage the overall grant-funded activities tied to methane testing and detection.

The OCC is partnering with the Oklahoma Energy Resources Board (OERB) for reclamation and restoration efforts. Reclamation and restoration costs are estimated to be $16,744,000. This calculation is a result of multiplying the number of wells (1,196) by the median cost for reclamation per site ($14,000). The $14,000 is a historical average provided by OERB.

All the budget application numbers listed are estimates. Estimates are subject to change based upon well and site conditions and the final contract award of a third-party administrator. Estimated numbers will be replaced with actuals for grant-funded payment purposes.

Oklahoma Corporation Commission

DECREASE THE AMOUNT OF METHANE EMISSIONS FROM ORPHANED WELLS. ENHANCE THE PROTECTION OF PUBLIC HEALTH AND SAFETY AND PROPERTY FROM ADVERSE EFFECTS OF OIL DRILLING PRACTICES FROM ORPHANED WELLS ON STATES AND PRIVATE LANDS. PLUG AND REMEDIATE OR RECLAIM ORPHANED WELLS ON STATE AND PRIVATE LANDS.

15.018 - Energy Community Revitalization Program (ECRP)

Interior Business Center (IBC) [DOI]

Oklahoma United States

State-Wide

D-AQD-FA-22-003

Infrastructure $25,000,000 (100%) percent this Project Grant was funded by the 2021 Infrastructure Act.
Amendment Since initial award the End Date has been extended from 09/30/23 to 09/30/26.