$25 million grant funds initial capping of orphan oil and gas wells
Published 10:06 am Monday, August 29, 2022
Governor Andy Beshear has announced a $25 million grant to plug so-called orphan oil and gas wells across Kentucky, an initiative that is part of his Better Kentucky Plan Building Stronger Communities Program, which is expected to create 180 jobs.
“This initial grant will not only create jobs, but it will allow us to plug these orphan oil and gas wells which have affected our farmers and other private landowners,” Beshear said.
The Building Stronger Communities Program will use grant funds provided through the federal Bipartisan Infrastructure Law that allow communities, businesses and local governments to benefit from this well capping, as well as projects focused upon energy efficiency, forestry, renewable energy, waste management and water.
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The orphan well-plugging program is expected to have a broad impact across Kentucky, according to Beshear. While over a dozen Kentucky counties have higher densities of orphaned wells, initial efforts will prioritize areas with wells prone to leakage, hindering land development, affecting communities, damaging croplands or negatively impacting water resources.
Interested contractors can bid through the Finance Cabinet on “packages” of orphan wells identified by the Division of Oil and Gas as eligible for this program. The state estimates that up to 1,200 wells could be capped through this initial grant.
The Finance and Administration Cabinet has issued 17 requests for proposals and contracts could be awarded by the end of September that will plug 312 abandoned wells.
“The Kentucky Oil and Gas Association appreciates the opportunity to partner with our federal and state leaders, including Gov. Beshear, to help secure and administer these critical orphan well-plugging funds,” said Association Executive Director Ryan Watts said. “This funding will go a long way in protecting the environment while reducing the surface impact of these orphan wells.”
Kentucky estimates there are 14,000 orphaned oil and gas wells to be plugged. There is also the potential to receive an additional $79 million in the next phase of the five-year federal infrastructure program.