Coalition of Oil & Gas States Adopts Texas Resolution Urging Congress to Direct DOI to Follow the Law

Since last October, Texas has been utilizing another set of grants from the Bipartisan Infrastructure Law for important environmental projects. Federal funds are being used to plug orphaned oil and gas wells, and the RRC has plugged more than 600 wells so far using the Initial Grant of $25 million the state received to plug wells. The federal funds supplement the RRC’s extensive State Managed Plugging program for orphaned wells.

The next phase of federal funding would be from formula grants distributed to states.

The Interstate Oil and Gas Compact Commission (IOGCC) recently approved Resolution 23.053, which was offered by Texas Railroad Commissioner Jim Wright, urging the U.S. Department of the Interior to follow the statutory language passed by Congress with respect to formula grants for orphan well plugging.

The IOGCC is comprised of more than 30 oil and gas producing states. The IOGCC resolution further endorses action by Congress to ensure states are provided the necessary flexibility and deference to utilize grant funds in accordance with existing state programs for the purpose of plugging and restoring as many orphan wells and well sites as possible.

“ Taxpayer dollars – regardless of their origin –should always be used efficiently and effectively to achieve the desired result. Unfortunately, the Department of the Interior’s draft formula grant guidance fails to adhere to the intent of Congress and would result in fewer wells being plugged than otherwise could be” said RRC Commissioner Wright. “ This resolution, unanimously approved by member states across the political spectrum, reinforces the shared desire for taxpayer funds to be utilized to plug as many orphan wells as possible and asks that the Congressional delegations of IOGCC member states take action to achieve our shared goal of plugging orphan wells.”

Earlier this year, the RRC submitted comments on the draft formula grant guidance issued by the Department of the Interior.

The RRC maintains the draft guidance place unnecessary administrative burdens that go beyond the scope of the legislation that authorized the well plugging funds. There’s also concern about a proposed phased approach to releasing formula funds, versus releasing the total amount at once.