S. 5630 — Stop Orphaned Wells Act

This section states congressional findings that at least 140,000 documented and between 250,000 and 740,000 undocumented orphaned well sites exist nationwide, including more than 15,000 on Federal land as of December 2024; that such sites pose public health, safety, and environmental risks with no identified responsible parties for remediation; that the Mineral Leasing Act requires the Secretary of the Interior to secure financial assurances for reclamation; and that the $4.7 billion provided by the Infrastructure Investment and Jobs Act addressed existing wells but further action is needed to ensure operators rather than taxpayers fund future reclamation.

This section requires operators to post financial assurances before commencing surface-disturbing activities on federal oil and gas leases to cover complete and timely remediation and reclamation of affected land, water, and resources. It sets minimum amounts at $200,000 per lease or $650,000 per state (with higher amounts required when idled wells reach 50 percent of an operator’s total wells), eliminates nationwide bonds (with existing ones replaced within one year of enactment), and mandates annual inflation adjustments. It also requires the Secretary to provide notice and an opportunity to comply before denying lease issuance or transfer due to material noncompliance with reclamation standards.

This section directs the Secretary of the Interior to promulgate regulations within 60 days of enactment of the Stop Orphaned Wells Act that hold lessees and sublessees responsible for plugging wells drilled and removing facilities installed under Mineral Leasing Act leases until the Secretary approves an assignment of record title or transfer of operating rights. After approval, the assignor or transferor remains liable for all pre-approval obligations, whether identified at transfer or not, including compensatory royalties for drainage, well plugging, and facility removal.

This section prohibits transfers of covered oil or gas leases issued under the Mineral Leasing Act or the Mineral Leasing Act for Acquired Lands without prior approval from the Secretary of the Interior. It requires leaseholders to submit applications with financial risk assessments, lists of leases and wells, and violation histories; mandates a 30-day public comment period and decisions within 90 days; and requires denial if the proposed lessee has filed for bankruptcy, lacks an investment grade credit rating, has no record of safe operations in the preceding 5 years, or fails to meet a debt-to-equity ratio below 2 to 1 without a parent guarantee.

This section establishes fitness-to-operate certification requirements for any entity seeking issuance, extension, or transfer of a lease, right-of-way, permit, or other authorization for oil or gas exploration, development, or production on federal land. It directs the Secretary of the Interior to certify recipient responsible parties based on past compliance with environmental and safety laws, financial solvency to meet decommissioning liabilities, and other criteria; requires annual compliance verification with penalties including lease suspension, fines, supplemental financial assurance, or decommissioning orders; and mandates implementing regulations within one year of enactment.