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The IIJA funding that pertains to the plugging of AO wells in the commonwealth by the Office of Oil and Gas Management (OOGM) is comprised of the following separate potential funding sources:
✔ Initial Grant $25 million available to Pennsylvania. This is a one-time grant issued in Year One of the IIJA. 90% of this Grant must be in contracts or grants within 90 days of receipt and obligated within one year.
DEADLINE: May 13, 2022.
STATUS: U.S. Department of Interior (DOI) released
the Initial Grant guidance on April 11, 2022. DEP applied for the initial grant on May 12, 2022.
The U.S. Department of the Interior approved the application as submitted for the full $25 million on August 25, 2022 with an effective “date of receipt” of Initial Grant funding of October 1, 2022.
DEP has issued notice of award on 13 contracts prepared as part of the Initial Grant funds. These contracts address 226 wells to be plugged. Four of these contracts have received Notice to Proceed (NTP). For an update on the contracts visit our IIJA project tracker.
✔ Formula Grant Potentially $300 million over five years. Money must be obligated within five years of receipt and spent over a ten-year period.
STATUS: Notice of Intent to apply for the Formula Grant submitted to DOI on December 23, 2021.
DOI awarded $79,178,000 in Phase One of Formula Grant funding to Pennsylvania on January 31, 2022. Approximately $1.5 billion in Formula Grant funding remains to be allocated by DOI. Awaiting further guidance from DOI on how to apply for this funding.
✔ Performance Grant – Regulatory Improvement Potentially two $20 million grants for a total of $40 million are available until 2030 that must be spent in five years. Pennsylvania can qualify for these grants through (A) strengthening plugging standards and procedures designed to ensure that wells are plugged in an effective manner; and, (B) making improvements designed to reduce future orphaned well burdens, such as financial assurance reform, alternative funding mechanisms for orphaned well programs, and reforms to programs relating to well transfer or temporary abandonment.
STATUS: Draft guidance was released by DOI on January 30, 2023. The public comment period has been extended to March 24, 2023.
✔ Performance Grant – Matching Grant Potentially up to $30 million maximum over ten years. Pennsylvania can qualify for this Grant funding through certifying that it will expend more commonwealth funds for plugging wells in the upcoming Fiscal Year than the average annual amount expended by the State during the period of Fiscal Years 2010 through 2019 for plugging wells.
STATUS: Awaiting further guidance from DOI.
There are several key deadlines that require DEP to take immediate action for Pennsylvania to be eligible to receive its share of federal funding.
> The first deadline was
December 30, 2021 to submit a notification and information to the DOI relating to Formula Grants ($300 million over 5 years).
NOTE: The Department met the first major milestone for the December 30 deadline by submitting the
Formula Grant Write Up and
Notice of Intent to apply for the Formula Grant to the DOI.
> May 13, 2022 is the last day Pennsylvania can request the Initial Grant of $25 million from the DOI. DOI released the
Initial Grant guidance on April 11, 2022. DEP applied for the initial grant on May 12, 2022.
Note: The Department was awarded the Initial Grant of $25 million with a period of performance that began on October 1, 2022.
> Based on the effective “date of receipt” of Initial Grant funding of October 1, 2022, DEP must obligate 90% of the $25 million Initial Grant by September 30, 2023.
To develop data to support future Departmental efforts, the Bureau of Oil and Gas Planning and Program Management (BOGPPM) developed an online Plugging and Plugging Support Contractor Survey. The survey was sent by invitation to industry groups and contractors on October 6, 2021, as well outbound eNewsletter announcements and social media posts. The survey continues to be available on
DEP’s Office of Oil and Gas’ Home page.
As of January 14, 2022, 127 companies have completed the survey and highlights of the responses are as follows:
• 100% indicated their interest in being given an opportunity to plug orphan and abandoned wells under a federal stimulus project.
• 43% indicated that they have previously plugged wells or performed a supporting role function in plugging wells under a PA-issued contract.
• 44% indicated that they are currently registered as a supplier under the PA Supplier Portal.
• 56% are willing to complete plugging projects in all parts of Pennsylvania, while 31% are only interested in plugging wells within the NW Region and 31% are not interested in plugging wells outside of the Commonwealth.
• 82.5% indicated they would anticipate hiring additional staff if awarded plugging contracts or offers for other services.
✔ Initial Grant: DEP will use the Initial $25 million Grant to move well plugging contracts through our Construction Contracts Request to Bid process.
✔ DEP Bureau of Oil and Gas Planning and Program Management has produced well plugging projects which aim to address wells with the greatest threat to the environment and public health & safety in an attempt to maximize contract efficiencies while effectively plugging the most possible wells with the Infrastructure Investment and Jobs Act (IIJA) initial grant funds.
The projects were selected from DEP’s Abandoned Orphan (AO) Well List of approximately 8,900 wells that have had a full inspection and investigation. A well is placed on DEP’s AO well list when no responsible party can be identified and a thorough AO well investigation has been conducted by the Department. A component of an AO well investigation includes determining a risk score to apply to the individual well. A score is calculated based on the type of well, its condition, and its proximity to sensitive receptors (for example, surface water, buildings, water supply wells, etc.).
Approximately 50 wells with the highest score on the AO well list were selected as priority wells to plug and were established as individual projects. Additional AO wells, identified within an approximately ½ mile radius of the priority AO well, were then added to each individual project. The goal was to produce projects containing roughly 8 to 12 proximally located AO wells which has been determined to be the most cost-efficient sized contracts based on DEP’s historic cost tracking data. DEP is preliminarily working on 50 contracts that will be released as part of this Initial Grant process or until funding is exhausted.
✔ Depending on the complexity of a particular project, it can take over 60 days from the time a Request for Bids is released until the contract is awarded. Once the contract is awarded, the contractor has the time specified in the contract to plug the identified AO wells. The time from mobilization until the AO well is properly plugged depends on the condition of the well, the total depth of the well and any surface complications such as remediation of contamination and removal of any remaining surface equipment associated with the AO well.
> Pennsylvania’s Environmental Justice Policy is a critical part of DEP’s work, and DEP acknowledges the broader works contained within President Biden’s
Executive Order 14008 on tackling the climate crises at home and abroad, wherein it promises to alleviate pollution in marginalized communities by directing 40 percent of federal resources to them.
> As such, the Bureau of Oil and Gas Planning and Program Management is committed to investing in traditionally underserved, low income, persons of color and otherwise vulnerable population areas where priority AO wells exist.
> DEP expects that the DOI will expect states to collect information on this topic and, as such, both the DEP Environmental Justice and draft EPA Justice 40 maps are taken into consideration as projects are developed.
> As AO well plugging work begins, any wells plugged, and funds spent in these areas will be tracked and reported on this page.
> DEP has 13 contracts in process under the Initial Grant with between 8 and 24 wells per contract
> The Oil & Gas Infrastructure Investment and Jobs Act (IIJA) Project Tracker has the most up to date information on wells being plugged through the IIJA Grants.
> Draft guidance for the Formula Grant process was released by DOI on January 30, 2023. DEP currently anticipates awards of the Formula Grant in the second quarter of 2023.