Oklahoma’s Federally Funded Well Plugging Program Faces Uncertain Future
OKLAHOMA CITY – President Donald Trump’s Acting Director of the Office of Management and Budget (OMB), Matthew Vaeth, issued last night a Memorandum on the “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs” for all federal executive departments and agencies except for Medicare or Social Security benefits.
The memorandum is in response to the President’s January 20th Executive Order titled Unleashing American Energy outlining the Administration’s policy goals and directives for energy and infrastructure improvements. The order directed all federal agencies to pause the disbursement of funds appropriated through the Infrastructure Investment & Jobs Act (IIJA).
The temporary pause went into effect at 5 PM ET today, January 28, 2025. All federal agencies must “submit detailed information on any programs” no later than February 10, 2025.
The full breadth and scope of this memorandum is still being determined. It’s focus appears to be on the $3 trillion spent in FY2024 for federal financial assistance such as grants and loans.
The Oklahoma Corporation Commission (OCC) is in communication with the U.S. Department of the Interior to identify the potential impact on its $102 million Infrastructure Investment and Jobs Act (IIJA) grant application to plug abandoned oil and gas wells in Oklahoma.
OCC submitted its application in December 2024 to the DOI for the next phase of the federal well plugging initiative. A Request for Proposal to contract with a third-party administrator to oversee the expenditure of the anticipated $102 million dollar grant was completed last week with an award anticipated soon.
The IIJA also included an Energy Infrastructure component addressing enhancements to the power grid and promoting clean energy initiatives which have also been temporarily paused or may be subject to the stated intent of the President to end such mandates.
The OCC will monitor federal policy developments with the intent to mitigate risks and adapt to changes in the federal well plugging program. It is anticipated that legal challenges at the federal level may ensue over impacted projects and constitutional concerns.
The agency is actively working to position itself to be in the best possible position to quickly moved forward with implementation of its program to plug the thousands of identified orphaned wells in our state.
Meanwhile, federal funding from the Environmental Protection Agency impacting the Brownfields program, Brownfields Community-wide Assessment program, Bipartisan Infrastructure Law 128A, Underground Injection Control, Leaking Underground Storage Grant (LUST) fund, and the Underground Storage Tank Prevention Program Grant have also been placed on hold per the OMB Memorandum.
