UPDATE – Nov. 15, 2021:

The bipartisan infrastructure package, or H.R. 3684 Infrastructure Investment and Jobs Act, passed the House on November 5 and was signed into law on November 15. $19 billion taxpayer dollars will be spent on cleaning up orphaned oil and gas wells and abandoned coal and hardrock mines, which are environmental liabilities left behind by the extractive industry.

ORIGINAL POST – Aug. 6, 2021:

The Senate’s bipartisan infrastructure package authorizes $19 billion to clean up orphaned oil and gas wells, abandoned coal mines, and abandoned hardrock mines. While it is important to properly reclaim these sites, taxpayers should not be forced to pick up the tab for expenses that should be covered by industry. The total amount surpasses the American Jobs Plan, in which the Biden Administration proposed $16 billion to clean up abandoned wells and mines.

Any funding for well clean up should at least also reform industry bonding rates to protect taxpayers from being forced to pay for well and mine clean up in the future.  Oil and gas bonding rates have not been updated since the 1960s.

The following sections in the bipartisan infrastructure framework provide funding for abandoned well and mine reclamation:

Orphaned Wells Reclamation

Sec. 40601. Orphaned well site plugging, remediation, and restoration.

• $4.7 billion total for orphaned wells reclamation.
• More specifically, the program provides $400 million for reclamation work on Federal and Tribal lands, $4.275 billion in grants to States and $32 million to DOE and the Interstate Oil and Gas Compact Commission for research and development.

The language for this section largely comes from the Revive Economic Growth and Reclaim Orphaned Wells Act, or “REGROW” Act introduced in both the Senate and the House in June. Orphaned wells should be timely and properly reclaimed to prevent environmental and public health hazards, but doling out taxpayer money is not the magic solution.

Insufficient oil and gas bonding—financial assurances posted by operators before drilling to cover the cost of reclamation in the event they go bankrupt—is the root of the problem. Current bonding rates haven’t been updated in decades and the amount of bonds the Bureau of Land Management holds are insufficient to cover the cost of reclamation. Like we said in our letter to the Senate Energy and Natural Resources Committee, lawmakers should support oil and gas bonding reform to prevent more wells from becoming orphaned and increase industry accountability. Taxpayers should not be forced to pay the clean up bill left behind by the oil and gas industry.

Abandoned Hardrock Mine Reclamation

Sec. 40704. Abandoned hardrock mine reclamation.

• $3 billion total for abandoned hardrock mine reclamation, with 50% going to States and Indian Tribes on a competitive or formula basis and 50% for reclamation on federal lands.

Abandoned hardrock mines are the toxic legacy of the General Mining Law of 1872—the legislation that still governs hardrock mining on federal lands. The 1872 Mining Law did not include provisions requiring clean up after mining activities cease. As a result, taxpayers foot the bill to clean up the industry’s liability. A 2020 GAO report identifies 140,000 abandoned hardrock mines on federal land, with an estimated 390,000 abandoned mine features not counted yet. Federal agencies have spent $3 billion in the last decade to clean up toxic mines. And now some in Congress want to spend another $3 billion of taxpayer money on reclamation work that should have been done by the hardrock mining industry.

Abandoned Coal Mine Reclamation

Sec. 40701. Abandoned Mine Reclamation Fund authorization of appropriations.

• $11.3 billion total for the Abandoned Mine Reclamation Fund.
• The program provides grants to States and Indian Tribes on an equal annual basis over a 15-year period based on the number of tons of coal produced before August 3, 1977. Priority will be given to reclamation projects that provide employment for current and former employees of the coal industry.

Sec. 40702. Abandoned mine reclamation fee.

• Decreases the fees on coal production that fill the Abandoned Mine Reclamation Fund, reducing industry’s share of clean up costs.
  • Fee for surface coal mining reduced from 28 cents per ton of coal produced to 22 cents per ton.
  • Fee for underground mining reduced from 12 cents per ton to 9.6 cents per ton, or 10% of the value of the coal at the mine, whichever is less.
  • Fee for lignite coal reduced from 8 cents per ton to 6.4 cents per ton, or 2% of the value of coal at the mine, whichever is less.
• Extends the authorization of the abandoned mine reclamation fee which is set to expire on Sep 30, 2021 to Sep 30, 2034 so fees keep getting collected.

Unlike orphaned wells and abandoned hardrock mine reclamation, abandoned coal mine reclamation is paid for by the coal industry through a reclamation fee based on per ton of coal produced. However, decreasing the fee while increasing authorization is shifting the financial burden from industry to taxpayers.