US releases more funding to tackle growing inventory of abandoned oil and gas wells

More federal dollars have been released to help US states tackle abandoned and methane-leaking oil and gas wells as operators continue to leave unsealed drill holes behind.

The US Department of the Interior announced in late May it had "unlocked" additional funding allocated under the 2021 Bipartisan Infrastructure Law to help plug and remediate such well sites, with $2 billion now available for state grants. The belated funding, while welcome, will not come close to solving what has become a growing headache for oil-rich states, experts agree.

"Decommissioning wells and well sites is fundamentally burying money in the ground," said Dwayne Purvis, a former oil industry executive who now consults with operators. "You're doing work to create value that doesn't earn a return. It benefits other people."

While most companies responsibly close their wells, companies that go bankrupt or lack decommissioning funds often abandon depleted or uneconomic sites, Purvis said in an interview. The result is a backlog that falls on states and taxpayers.

States struggle to keep up

As of May 22, Texas regulators listed a record 12,345 orphaned oil and gas wells in the state's inventory, up from 11,000 in late 2025 despite dozens of wells getting plugged every month. Texas received $79.7 million in federal funding to cap abandoned wells and expects to receive nearly $319 million over the life of the program.

Ohio added 921 orphaned wells in 2025 to reach 2,533. The state sealed 480 wells that year, according to the Ohio Department of Natural Resources. After receiving a $25 million initial federal grant in 2022, the state recently applied for another $30 million in matching grant funding released May 29.

Louisiana had identified 4,600 orphaned wells in 2022 when it received an initial federal grant from Interior in 2022 and then capped nearly 600 wells using that money over the following two years, Patrick Courreges, press secretary for the Louisiana Department of Conservation and Energy, said in an email.

Like other states, however, Louisiana faces an uphill battle. The state saw another 1,128 wells "orphaned" in 2025, the largest annual increase in state history, according to the coastal advocacy group Healthy Gulf. The rise was driven mainly by two oil company bankruptcies in recent years, Scott Eustis, the group's community science director, said in an interview.

In late May, the state reached an agreement in principle with Exxon Mobil to close orphaned wells along the coast as part of a deal to resolve local climate lawsuits over Louisiana's eroding coastline. The settlement followed a US Supreme Court ruling allowing Chevron to transfer a similar case from state to federal court — where local lawsuits are often less likely to prevail.

A spokesperson for Louisiana Attorney General Liz Murrill said there are no details on the coastal orphaned well projects because the agreement is still being drawn up.

Investments needed

The Trump administration initially froze the money Congress allocated under the 2021 infrastructure law for state orphan well cleanup projects and has been slow to release it. At least one program, known as Regulatory Improvement Grants, has yet to resume.

Those grants worth $700 million were earmarked for states to improve well-plugging standards to ensure wells are appropriately capped to protect groundwater and other natural resources, and to strengthen state programs.

Interior said the regulatory improvement grants "have not yet been advertised and are still under consideration by the department."

"My guess is that they don't want to manage any changes that states must make to receive these funds, such as better plugging standards or policies that have lowered orphan well burdens," Ted Boettner, a senior researcher with the nonprofit Ohio River Valley Institute, said in an email.

In Texas, state regulators are hearing from landowners and other state residents about abandoned wells that leak pollution and present other hazards, Purvis said.

In an effort to speed up the work, the Texas legislature in 2025 passed a bipartisan law requiring companies to plug depleted wells within 15 years. There was previously no deadline. It also allocated $100 million from its general fund to boost the Texas state program.

The average cost of capping a well is about $150,000, but costs can range from $75,000 to $750,000 depending on location, access and the complexity of the well, according to the Well Done Foundation.

The nonprofit has plugged more than 120 orphaned wells nationwide since 2019, and is now operating in 15 states, according to Dave Tragethon, a foundation spokesperson. So far, those projects have kept more than 5 million metric tons of CO₂ equivalent emissions out of the atmosphere, he said in an email.