Orphaned oil wells are oil and gas wells that have been abandoned by defunct companies that cannot pay to plug them and restore drilling sites. The EPA estimates that there are more than 2 million unplugged abandoned wells in the United States, many of which leak methane into the air and groundwater and pose serious public health risks – especially to rural, Tribal and communities of color. By law, when oil and gas operators cease production, an inactive well must be cleaned up (reclaimed) by the operator. The Bureau of Land Management requires operators to post bonds to cover the costs of any reclamation work before they can start drilling on federal lands. However, the amount of these bonds is often insufficient, forcing taxpayers to cover the costs of reclaiming abandoned wells. According to a 2019 GAO report, 84% of bonds, covering 99.5% of wells, are insufficient to cover reclamation costs which are estimated to be at least $46.2 million. It warned that many more wells are at risk of becoming orphaned in coming years due to bankruptcies, as oil prices struggle to recover from historic lows after the pandemic crushed global fuel demand.

Pending Legislation: H.R.2415 - Orphaned Well Cleanup and Jobs Act of 2021
Sponsor: Rep. Teresa Leger Fernandez (NM)
Status: Passed House Committee on Natural Resources, qualifying for a floor vote
House Speaker: Speaker Nancy Pelosi (CA)