H.R. 10721 — Stop Orphaned Wells Act

This section states congressional findings that there are at least 140,000 documented orphaned well sites and between 250,000 and 740,000 undocumented orphaned well sites on Federal, State, Tribal, and private land; that the Bureau of Land Management estimated more than 15,000 orphaned wells on Federal land as of December 2024; and that such sites pose public health, safety, and environmental risks with no identified responsible parties for remediation. It further states that the Infrastructure Investment and Jobs Act provided $4.7 billion to address orphaned wells but that additional action is needed to ensure operators rather than taxpayers finance future reclamation.

This section requires operators to post financial assurances before commencing oil or gas activities on federal leases to cover full remediation and reclamation costs. It sets minimum amounts of $200,000 per lease or $650,000 per state, prohibits nationwide bonds, and mandates full liability bonds when idled wells reach 50 percent of an operator’s total wells. It bars lease issuance or transfer to noncompliant operators or their affiliates and requires annual inflation adjustments to the minimums.

This section directs the Secretary of the Interior to promulgate regulations within 60 days of enactment addressing lessee and sublessee liability for plugging wells drilled and removing facilities installed under Mineral Leasing Act leases. The regulations must provide that the lessee or sublessee remains responsible until the Secretary approves an assignment of record title or transfer of operating rights, and that the assignor or transferor thereafter remains liable for all pre-approval obligations—including compensatory royalties for drainage, well plugging, and facility removal—whether or not those obligations were identified at the time of transfer.

This section prohibits transfers of oil and gas leases issued under the Mineral Leasing Act or the Mineral Leasing Act for Acquired Lands without prior approval by the Secretary of the Interior. A leaseholder must submit an application with a financial risk assessment, list of leases and wells, and record of violations; the Secretary must post the proposal online, accept public comments for at least 30 days, and decide within 90 days, with mandatory denial if the proposed lessee has filed for bankruptcy, lacks an investment-grade credit rating, has no record of compliant operations in the prior five years, or fails specified debt-to-equity standards without a parent guarantee.

This section establishes fitness-to-operate certification requirements for any entity seeking issuance, extension, or transfer of a federal oil or gas lease, right-of-way, permit, or authorization. The Secretary of the Interior must base certification on the compliance record of the applicant and its covered entities with environmental, safety, and reclamation laws, plus their financial capacity to meet decommissioning liabilities. The Secretary must issue or revise implementing regulations within one year of enactment of the Stop Orphaned Wells Act and conduct annual compliance reviews thereafter, with authority to suspend authorizations, impose fines, require additional financial assurance, or order decommissioning for noncompliance.