Despite more than 15,000 documented orphan wells on public lands in the U.S. costing taxpayers to plug and reclaim habitat, the Department of Interior (DOI) has proposed to roll back bond prices for public land lessees to rates not seen since the 1950s and to significantly cut public comment periods. Additional costs and increased future orphaned wells comes at a steep price to taxpayers.

Drilling bonds are held until cleanup is complete, but even before the decrease in bond prices proposed, it costs less to simply leave a well for the public to reclaim out of taxpayer pockets, according to Autumn Hannah, vice president of the nonpartisan organization Taxpayers for Common Sense, who joined representatives with the Wilderness Society, National Wildlife Federation and Public Land Solutions to protest the new proposals and to inform the public of the issues and to warn of further expenses from orphaned wells.

"The administration's proposed oil and gas leasing rule is a significant rollback for taxpayers," Hannah said. "It takes away important federal bond requirements. It takes away important updates to federal bond requirements, limits public participation on leasing decisions and revised leasing practices that have a long history of producing little value for taxpayers while increasing financial risk."

The administration designed this rollback to cut compliance costs, remove administrative barriers, and encourage domestic energy investment. Groups like the Western Energy Alliance argue that the previous Biden-era hikes were punitively high and designed to deter fossil fuel extraction on public lands.

In a 2024 release, Kathleen Sgamma, president of Western Energy Alliance, said the rule "prices producers out of the market and off public lands” and is unnecessary as only a small amount of the orphaned wells are applicable to the discussion. The majority of orphaned wells are on Forest Service land and predate current reclamation standards.

“The bonding amounts are excessive when there are just 37 orphan wells out of more than 90,000 wells on federal lands. Increasing bonding amounts 20-fold in order to take care of a problem on just .04% of wells is way out of proportion. Companies are already responsible for reclaiming wells, and one of the primary reasons there are so few orphan wells on federal lands is because our members clean up old wells even when they weren’t the party that abandoned them in the first place.”

The plan reduces individual lease bonds from $150,000 to $10,000 and cuts statewide (blanket) bonds from $500,000 to $25,000.

Oil and gas resources on public lands belong to all Americans, Hannah said. Companies that develop those resources are given the opportunity to profit from them on the publicly owned assets. But that opportunity comes with responsibilities.

"One of the most basic [responsibilities] is cleaning up wells and restoring the land when development is complete," she said.

The U.S. committed $4.7 billion to the Federal Orphaned Well Program under the 2021 Bipartisan Infrastructure Law. Of this appropriation, the Department of the Interior has announced over $2.1 billion in state, federal, and tribal grants, and obligated approximately $1.3 billion to plug and remediate legacy wells and return the habitat to the way it was found.

For comparison, the annual budget for the National Park Service is $1.5 billion less than the money pledged to clean-up after drilling operations have drained the resources on public lands. According to the Bureau of Land Management (BLM), there are an estimated 15,000 orphan wells — with the potential for more to be discovered — currently located on federal public lands.

"Oil and gas operators are required to post bonds to cover the associated costs of reclamation in the event the company is not able to perform that work due to bankruptcy or other causes," according to a recent BLM report. The minimum federal bonding values were updated in 2024 under the Oil and Gas Leasing rule to better reflect the actual costs of reclaiming these wells, however, the majority of wells are still bonded under the old rule from 1960. 

The bonding values from 1960 are insufficient to cover the reclamation costs from these wells leaving the door open for wells to be orphaned. As the 2024 rules were implemented over the past three years, the number of insufficiently bonded wells was expected to dramatically decrease. The newly proposed rule changes expectations.

Abandoned wells pose significant dangers, including the risk of groundwater contamination, methane emissions, air pollution and the potential for sinkholes. Properly sealing these orphaned wells can help prevent the escape of harmful substances, protect groundwater supplies, minimize environmental harm, and enhance public health and safety, the BLM reported.

Yet, there is a problem when billions are needed from taxpayers to clean up after energy companies abandon their obligations to remove wells after they run dry. Now, in an effort to answer calls for increased energy production on public land by the Trump administration, the Interior Department is proposing to lower bond rates that could increase the number of orphaned wells.

"Taxpayers for Common Sense estimated that the gap between existing bond coverage and the cost of equipment currently producing wells exposed taxpayers to more than $6 billion in potential liabilities," Hannah said.

She said the organizations gathered are urging the Trump administration to reverse course and implement bonding minimums and other taxpayer protections that help ensure public resources are managed responsibly, and the communities are not left with the cost of abandoned development

"The administration is now proposing to return to bonding minimums that were originally established in the 1950s and 1960s. Those outdated minimums bear little relationship to the actual cost of plugging wells and restoring sites today. Adequate minimum bond requirements are important. They establish the baseline level of financial assurance across the federal program and help ensure taxpayers are not left exposed when operators fail to meet their obligations," she said.

The proposed rule change goes beyond bonding. It would shorten public participation opportunities in the leasing process and codify noncompetitive leasing practices that have historically generated little production and little value for taxpayers, said Senior Staff Attorney at the Wilderness Society Gregg DeBie. "These changes move the program further away from accountability and transparency and further toward shifting risk onto the American public," he said. "Every well eventually stops producing. Every well eventually must be plugged and reclaimed. The question is whether those costs will be paid by the companies that profited from their development or by taxpayers?"

The public comment period on this proposed rollback is open until Aug. 24.

To make a public comment: federalregister.gov/.