Abandoned oil and gas wells in New Mexico will be targeted for cleanup using $25 million in federal funds given to the state Thursday through the Investment and Jobs in infrastructure signed last year by President Joe Biden.
New Mexico has identified 200 wells requiring plugging for the initial grant application through the U.S. Department of the Interior, located in the southeast Permian Basin and northwest San Juan Basin regions. .
Oil and gas wells are often left abandoned by operators who decide they are no longer financially viable, continually releasing air pollutants like methane when left unattended.
Operators typically fund the cleanup of their wells, if they are abandoned, through bonds to help pay for reclamation, but state officials said the funding was generally insufficient.
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This means that most of the work is funded by taxpayers’ money.
New Mexico’s Petroleum Conservation Division (OCD), a branch of the Department of Energy, Minerals and Natural Resources, estimated last year that there were as many as 1,700 wells from this type throughout the state.
Gov. Michelle Lujan Grisham said the DOI program will help New Mexico continue to clean up abandoned wells for years to come with additional federal funds that have yet to be allocated.
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“This funding will allow the state to clean up dozens of additional abandoned oil and gas wells each year, protecting our environment and creating local jobs and economic benefits,” she said. “I appreciate the New Mexico Congressional Delegation and the U.S. Department of the Interior for bringing these vital funds to our state.”
OCD is responsible for cleaning wells and has reported that it is able to remediate about 50 wells per year at current funding levels, a number that is expected to increase with federal funding.
The money was included in the Revive Economic Growth and Reclaim Orphaned Wells (REGROW) Act, sponsored by U.S. Senator Ben Ray Lujan (D-NM) and attached to the infrastructure bill.
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He said orphan wells in New Mexico and across the United States were a “crisis” and posed threats to public health and the environment.
“Millions of Americans live within a mile of an orphan well, and this funding will make a real difference across New Mexico and the country,” Lujan said. “Thanks to the bipartisan Infrastructure Act, funding is now on the way to help New Mexico clean up orphan wells, protect our environment, and get New Mexicans back to work.”
U.S. Representative Melanie Stansbury (D-NM), said she supported the infrastructure bill with additional funding for orphan wells, and said she hoped the dollars would help reduce the environmental impact of the fossil fuels and create new jobs in industry.
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“For years, 1,700 orphaned and abandoned wells across New Mexico have posed a risk to our environment and to the health and well-being of our communities,” she said.
“I’m proud that this investment is helping us protect our environment while supporting economic development and sustainable local jobs that utilize the expertise of our oilfield workers across New Mexico.
US Interior Secretary Deb Haaland, herself a New Mexico native and former congresswoman from the state, said orphan wells were creating dangerous pollution in some of the country’s most deprived communities in the rural areas where oil and gas activities take place.
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New Mexico was one of 24 states to receive the first round of funding totaling $1.15 billion, finding 129,000 abandoned wells nationwide in 2021.
Another $33 million has been earmarked for plugging wells on federal lands, and more money is expected for similar work on Indigenous lands.
In total, the infrastructure bill allocated $4.7 billion for the work.
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Kansas led the nation in cleaning up abandoned wells with the first funding round of 2,352 wells, followed by Kentucky and Oklahoma with about 1,200 wells each.
Texas, which shares the Permian Basin with New Mexico, secured funding to clean up 800 wells.
New Mexico, along with 11 other states, planned to prioritize wells in disadvantaged communities, according to the DOI announcement, while others intended to focus on job creation and the reduction of methane emissions.
“President Biden’s bipartisan Infrastructure Act allows us to address long-standing environmental injustices by making a historic investment to cap orphan wells across the country,” Haaland said in a statement.
“At the Department of the Interior, we are working on multiple fronts to clean up these sites as quickly as possible by investing in efforts on federal lands and partnering with states and tribes to leave no community behind.”
Adrian Hedden can be reached at 575-628-5516, [email protected] or @AdrianHedden on Twitter.