D22AP00171
Project Grant
Overview
Grant Description
The Ohio Department of Natural Resources, Division of Oil and Gas Resources Management, Orphan Well Program (OWP) was established in 1977 to plug improperly abandoned oil and natural gas wells. Currently, the OWP is composed of 25 full-time staff and is in the process of hiring seven additional full-time staff. The program also relies on the remainder of the division's 135 full-time staff as necessary to assist the OWP. The OWP has been funded by a portion of the state tax on oil and gas production. Ohio's program has plugged more than 2500 wells. Ohio Revised Code 1509.071 provides the authority for the OWP.
Currently, two separate options are used to plug these wells. The traditional program is used to plug wells, under which the site work and plugging plans are designed and bid by the OWP to a pool of pre-qualified contractors. The lowest responsive bidder is then awarded the work and required to complete all plugging and restoration. These wells are grouped by proximity to each other for increased efficiency. Wells plugged under this program are selected on a priority basis pursuant to a statutorily required scoring matrix.
The landowner pass-through payment is the second option under the statute. This option allows landowners who may have a lower priority orphan well to take an active role in plugging and restoring the well through a well plugging contractor. After the OWP determines that the proposed cost to plug is reasonable and if the contracting and plugging process meet the requirements of the law, the OWP reimburses the well plugging contractors for costs up to the maximum contract amount once the well is plugged.
In response to the Bipartisan Infrastructure Law, the OWP is implementing a third option for well plugging in Ohio. This option consists of the hiring of design consultants and construction managers at risk (CMR). CMR is established under Ohio Revised Code 9.33, et seq., Ohio's Construction Management Services Law. The design consultants will develop project designs and ensure that the plugging operations occur in accordance with the designs for the OWP. This work will be completed using state funds. The two CMRs will manage the completion of well plugging using the funds received through the large-scale initial grant. Remaining project costs, program staff time, travel, equipment, etc., will be paid for with state of Ohio funds.
The CMR will serve as a general contractor to oversee the completion of each portion of a plugging project. The state of Ohio staff will oversee the design consultants and the CMRs to ensure that the work complies with the contract requirements and state plugging requirements. The selection of the design consultants and the CMRs are both being finalized through state processes. The CMR selection process will be complete and ready for contracting upon receipt of the large-scale initial grant.
After well plugging plans are designed by Ohio's design consultants, they will be packaged into projects for the CMRs to complete the work. Project designs will be prepared to accomplish the requirements of ORC 1509.071, which includes stabilization of orphan wells, access to the wells, drilling out and cleaning out of wells, installation of casing, cementing, installation of vault and vent systems, removal of associated equipment, restoration of property, and repair of damage to property caused by any of these activities.
The funds from the grant will be used to plug orphan wells that will benefit the state of Ohio as a whole by eliminating the impact or threat of impact that orphan wells pose to public health and safety and to the environment. In addition, the plugging of orphan wells fulfills the Division of Oil and Gas Resources Management mission statement.
Currently, two separate options are used to plug these wells. The traditional program is used to plug wells, under which the site work and plugging plans are designed and bid by the OWP to a pool of pre-qualified contractors. The lowest responsive bidder is then awarded the work and required to complete all plugging and restoration. These wells are grouped by proximity to each other for increased efficiency. Wells plugged under this program are selected on a priority basis pursuant to a statutorily required scoring matrix.
The landowner pass-through payment is the second option under the statute. This option allows landowners who may have a lower priority orphan well to take an active role in plugging and restoring the well through a well plugging contractor. After the OWP determines that the proposed cost to plug is reasonable and if the contracting and plugging process meet the requirements of the law, the OWP reimburses the well plugging contractors for costs up to the maximum contract amount once the well is plugged.
In response to the Bipartisan Infrastructure Law, the OWP is implementing a third option for well plugging in Ohio. This option consists of the hiring of design consultants and construction managers at risk (CMR). CMR is established under Ohio Revised Code 9.33, et seq., Ohio's Construction Management Services Law. The design consultants will develop project designs and ensure that the plugging operations occur in accordance with the designs for the OWP. This work will be completed using state funds. The two CMRs will manage the completion of well plugging using the funds received through the large-scale initial grant. Remaining project costs, program staff time, travel, equipment, etc., will be paid for with state of Ohio funds.
The CMR will serve as a general contractor to oversee the completion of each portion of a plugging project. The state of Ohio staff will oversee the design consultants and the CMRs to ensure that the work complies with the contract requirements and state plugging requirements. The selection of the design consultants and the CMRs are both being finalized through state processes. The CMR selection process will be complete and ready for contracting upon receipt of the large-scale initial grant.
After well plugging plans are designed by Ohio's design consultants, they will be packaged into projects for the CMRs to complete the work. Project designs will be prepared to accomplish the requirements of ORC 1509.071, which includes stabilization of orphan wells, access to the wells, drilling out and cleaning out of wells, installation of casing, cementing, installation of vault and vent systems, removal of associated equipment, restoration of property, and repair of damage to property caused by any of these activities.
The funds from the grant will be used to plug orphan wells that will benefit the state of Ohio as a whole by eliminating the impact or threat of impact that orphan wells pose to public health and safety and to the environment. In addition, the plugging of orphan wells fulfills the Division of Oil and Gas Resources Management mission statement.
Funding Goals
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.
Grant Program (CFDA)
Awarding / Funding Agency
Place of Performance
Ohio
United States
Geographic Scope
State-Wide
Related Opportunity
D-AQD-FA-22-003
Analysis Notes
Infrastructure $25,000,000 (100%) percent this Project Grant was funded by the 2021 Infrastructure Act.
Ohio Department Of Natural Resources was awarded
Ohio Orphan Well Program: Plugging and Restoration (OWP)
Project Grant D22AP00171
worth $25,000,000
from Interior Business Center in October 2022 with work to be completed primarily in Ohio United States.
The grant
has a duration of 5 years and
was awarded through assistance program 15.018 Energy Community Revitalization Program (ECRP).
Status
(Ongoing)
Last Modified 4/18/24
Period of Performance
10/1/22
Start Date
9/30/27
End Date
Funding Split
$25.0M
Federal Obligation
$0.0
Non-Federal Obligation
$25.0M
Total Obligated
Activity Timeline
Transaction History
Modifications to D22AP00171
Additional Detail
Award ID FAIN
D22AP00171
SAI Number
None
Award ID URI
None
Awardee Classifications
State Government
Awarding Office
140D04 IBC ACQ SVCS DIRECTORATE (00004)
Funding Office
140D04 IBC ACQ SVCS DIRECTORATE (00004)
Awardee UEI
GL11CMUK9937
Awardee CAGE
3Z0M4
Performance District
OH-03
Senators
Sherrod Brown
J.D. (James) Vance
J.D. (James) Vance
Budget Funding
| Federal Account | Budget Subfunction | Object Class | Total | Percentage |
|---|---|---|---|---|
| Energy Community Revitalization Program, Department-Wide Programs, Interior (014-2641) | Conservation and land management | Grants, subsidies, and contributions (41.0) | $25,000,000 | 100% |
Modified: 4/18/24