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Michigan to receive $25 million initial federal grant to address orphan wells
August 25, 2022
The Michigan Department of Environment, Great Lakes, and Energy (EGLE) announced today that the U.S. Department of the Interior has awarded Michigan an initial grant of $25 million to address orphan wells through the Infrastructure Investment and Jobs Act 2021 (IIJA), also known as the Bipartisan Infrastructure Law Section 40601. Eligible activities authorized under the initial grant include plugging wells, reclaiming lands impacted by associated development activities, and the removal of infrastructure associated with the wells on federal, state, tribal, and private property.
Orphan wells are abandoned or improperly plugged wells for which there is no known solvent existing owner or operator.
"We need to use every available resource to protect drinking water for Michiganders," said Governor Gretchen Whitmer. "This funding will help us plug orphan oil and gas wells, which will prevent the emission of harmful gasses, create jobs, ensure that more sites are made available for productive use by businesses and property owners, and protect the water supply for families. In the budget I signed last month, we dedicated additional resources to help clean up orphan oil and gas wells, and I will work with anyone to protect our communities."
EGLE’s Oil, Gas, and Minerals Division (OGMD) worked with the oil and gas industry for the passage of Act 308, P.A. 1994, which established an Orphan Well Fund with the Michigan Department of Treasury. OGMD utilizes the fund, paid for by revenue created by a severance tax on the oil and gas industry, to plug and remediate orphan well sites. The IIJA initial grant money will supplement the Orphan Well Fund for the continued plugging and reclamation of orphan well sites. Since passage of Act 308 nearly 30 years ago, approximately 400 sites have either been plugged or remediated.
"EGLE is ready," said Adam Wygant, director of OGMD. "EGLE has been working closely with the U.S. Department of the Interior and the Interstate Oil and Gas Compact Commission to prepare in anticipation of the funding, is launching multiple projects, and appreciates the historic investment made through the Bipartisan Infrastructure Law."
Michigan currently has 447 documented orphan sites as well as additional associated orphaned well facilities, piping, and contamination that remain to be addressed. Orphan well projects are ranked through a multi-component scoring system based on public health and safety risk, potential for or known environmental contamination, land use, and environmental justice screening tools. Generally, the projects will be completed in order from highest to lowest score. The IIJA initial grant money will reduce the estimated timeframes for plugging the backlog of documented orphan wells by decades.
"EGLE's commitment to cleaning up orphan oil and gas wells is key to unlocking new economic development opportunities and ensuring more projects are built on time and on budget," said Zach Kolodin, chief infrastructure officer for the Michigan Infrastructure Office. "This $25 million grant award will help jumpstart efforts to clean up the 447 known orphan gas wells throughout Michigan. The Michigan Infrastructure Office looks forward to working with communities and stakeholders across our state to identify even more funding opportunities that will enable them to invest in critical infrastructure projects that have a lasting impact on Michigan's future."
Consistent with the Bipartisan Infrastructure Law, EGLE’s principal orphan well project goals are protecting human health and the environment, reducing methane emissions, and creating good paying jobs. OGMD will post on its website a list of wells plugged, facilities decommissioned, and costs incurred as the projects progress. EGLE is working closely with the U.S. Department of the Interior, and is prepared and ready to launch multiple projects, and appreciates the historic investment made through the Bipartisan Infrastructure Law.