White House methane plan funds orphan well cleanup, rewards reduced farm emissions

The federal government will provide $1.15 billion this year to help states cap defunct oil and gas wells, the White House said Monday, as part of a broad plan to reduce methane emissions.

The government-wide methane reduction plan comes about two months after President Joe Biden joined a pledge at the United Nations Climate Conference in Scotland to reduce methane emissions by 30% by 2030. 

The plan also includes new Environmental Protection Agency regulations and an Agriculture Department incentive program for farmers to reduce or capture methane.

Methane is among the most potent greenhouse gases. One ton of methane has the warming impact of 80 tons of carbon dioxide, the White House plan said. Methane accounts for about 10% of greenhouse gas emissions but experts say it is related to about 30% of human-caused climate change.

The oil and gas industry accounts for 30% of U.S. methane emissions, according to the White House.

The EPA proposal would target that industry, defining guidelines for state regulators for the first time, including a requirement to conduct “rigorous leak detection.” The agency would also expand what it can regulate under Clean Air Act performance guidelines. 

The agency is working on another proposal this year to address orphaned wells, pipelines and tank truck loading and other sources, the White House said.

Together, the EPA actions would reduce methane emissions by 75% from covered sources, the White House said.

The plan also tasks the Bureau of Land Management and Bureau of Ocean Energy Management, the Interior Department agencies that oversee on-land and offshore energy production, with reducing the flaring and venting of methane from drilling.

The BLM is readying a regulation that would make vented methane subject to federal royalties, the White House said.

The single largest methane emitting industry is agriculture, which accounts for about 37% of U.S. emissions, according to the White House.

As part of the administration’s methane reduction push, the U.S. Department of Agriculture has created an incentive program to reward farmers and ranchers for reducing methane and sequestering carbon. 

Orphan wells breakdown

The White House plan listed how it would distribute $1.15 billion to 26 states eligible to receive funds to cap so-called orphan wells, which are no longer used for oil and gas extraction but can leak methane because former operators neglected to cover them.

Each state is eligible for a $25 million initial grant, plus a combined $500 million in additional grants in the program’s first year. The Interior Department will provide more detailed instructions “in the coming weeks,” the department said in a news release.

The funding accounts for the first year of money under the $1.9 trillion infrastructure bill enacted last year. Orphan well spending in the bill totals $4.7 billion.

Texas and Pennsylvania are the only two states eligible to top $100 million in the first year of the program, according to a table provided by the Interior Department. 

Ohio, with the third-highest eligibility amount, could see $85 million. Louisiana, eighth on the list, could receive $47 million and New Mexico, at No. 10, would be eligible for $44 million.

Colorado, Kansas, Missouri, Michigan, Montana, Arizona and Nebraska are also set to receive funds. 

To determine the allocations for each state, the administration considered the job losses in each state from March 2020 through November 2021, the number of documented orphaned oil and gas wells in each state and the estimated cost of cleaning up orphaned wells in each state. The infrastructure law established those criteria.

“We must act with urgency to address the more than one hundred thousand documented orphaned wells across the country and leave no community behind,” Interior Secretary Deb Haaland said in a release. “This is good for our climate, for the health [of] our communities, and for American workers.”