U.S. Interior Department Releases Guidance for States to Access Funding to Address Legacy Pollution

The U.S. Interior Department on Jan.16 released final guidance on the procedure for states to apply for up to $40 million each in Regulatory Improvement Grant funding accessible under the 2021 Infrastructure Investment and Jobs Act, or IIJA, to clean up unsafe and polluting orphaned wells and create jobs across the nation.

Through the IIJA, the department is funding the largest investment in tackling legacy pollution in U.S. history. The act invests in supporting and protecting communities by providing $11.3 billion to provide grants to states and tribes for abandoned coal mine land reclamation and $4.7 billion for orphaned well site plugging, remediation and restoration activities. In October, the department announced that it has approved around $1.1 billion in grants to 25 states to initiate work plugging and cleaning up orphaned wells. States have plugged over 8,800 orphaned wells since the enactment of the law. Moreover, the plugging of gas and oil wells supports the Biden administration’s initiative under the U.S. Methane Emissions Reduction Action Plan.

States are entitled for two types of Regulatory Improvement Grants. Plugging Standards Grants and Program Improvement Grants. Plugging Standard Grants aim to encourage states to adopt standards and procedures planned to make sure that wells are plugged in an effective way, which safeguards groundwater and other natural resources, the environment and public health and safety. Program Improvements Grants aim to encourage states to adopt other enhancements to state programs, intended to reduce forthcoming orphaned well burdens, such as alternative funding mechanisms for orphaned well programs and restructurings to programs linked to well transfer or temporary abandonment.

As per the final guidance, states are entitled to obtain a Program Improvement Regulatory Improvement Grant of $20 million and a Plugging Standards Regulatory Improvement Grant of $20 million, for a total sum of $40 million per state. The funding will assist in better protecting the environment and assist in preventing the creation of new orphaned wells, by incentivizing states to enhance their orphaned well programs and their standards and procedures.