(The Center Square) – Louisiana officials are overhauling the state’s decades-long program for plugging abandoned oil and gas wells, adopting a lead contractor framework with an initial focus on northern regions around Shreveport and Monroe.
The Louisiana Department of Conservation and Energy recently announced it will issue two Requests for Qualifications, or RFQs, to recruit lead contractors to manage and guarantee the cleanups, shifting away from a legacy framework that managed wells on a piecemeal, individual basis.
A 2024 state audit revealed the Louisiana Oilfield Restoration Association, or LORA, a private entity tasked with collecting operator fees dedicated to guaranteeing well closures, failed to operate cost-effectively and misappropriated funds meant for cleanup.
At the same time, the number of well abandonments in Louisiana has increased sharply. Total orphan wells in the state jumped from 2,800 in 2013 to nearly 4,800 in 2024. By May 2026, Louisiana’s orphaned well count stood at a record 6,598, up by more than 1,700 in just two years, according to the Department of Conservation and Energy.
The RFQs will provide the framework for the state to deploy $200 million in federal funding provided through the Bipartisan Infrastructure Law of 2021, which set aside $4.7 billion nationwide for the Federal Orphaned Well Program.
Louisiana officials plan to use the funding to target a concentration of abandoned drilling infrastructure in the Shreveport and Monroe regulatory districts. The initial contracts will focus heavily on Caddo, De Soto and Bossier parishes in the west, along with Union, Ouachita and Morehouse parishes to the east, before remediation crews eventually move south.
Wells in North Louisiana are significantly cheaper to remediate than the complex sites along the coast that are surrounded by water, said Mike Moncla, president of the Louisiana Oil & Gas Association.
“We’re getting more bang for the buck by starting in the north,” Moncla said in a phone interview. Moncla noted that in 2024, a $25 million federal grant funded the cleanup of 542 land wells in the state’s north at an average cost of about $46,000. That compares with an average cost of $94,000 per well in South Louisiana, where a $12.5 million grant awarded in the same year by the U.S. Fish and Wildlife Service remediated 133 high-cost wells at sites in coastal wetlands.
“When there are boats involved, the cleanup costs tend to be higher,” Moncla said.
Under the new system, designated lead contractors will manage plugging and restoration costs by subcontracting specialized field tasks to smaller, regional service companies. Physical field operations will encompass plugging orphaned wells, removing associated facilities and taking water quality measurements, according to the Department of Conservation and Energy.
The legacy Oilfield Site Restoration program, adopted in 1993, was criticized in the 2024 state audit for failing to keep pace with the growing backlog of abandoned wells. The audit noted that under previous rules, fees paid by operators into the state’s OSR fund were capped at roughly $12 million annually, a limit that restricted revenue growth for the program.
Between fiscal years 2020 and 2023, the state plugged 976 orphaned wells, but nearly 1,700 new abandonments were reported during the same period. Since the beginning of 2026, more than 500 additional wells have been abandoned.
Louisiana lawmakers formally abolished the legacy Oilfield Site Restoration Commission during the 2024 legislative session and shifted direct authority to the Department of Conservation and Energy.
Scott Eustis, community science director at Healthy Gulf, an environmental advocacy group based in New Orleans, said the legacy Oil Site Restoration Fund was severely underfunded. He contends, however, that federal funding rules have unintentionally complicated Louisiana’s cleanup strategy.
Eustis noted that former Louisiana Department of Natural Resources Secretary Thomas Harris had pressed the U.S. Department of the Interior over performance metrics that favor states with simpler, cheaper well restoration projects.
“Louisiana is essentially competing with states like Oklahoma for these federal dollars,” Eustis told The Center Square. “But Louisiana has something Oklahoma doesn’t have, which is all these wells in the water.”
The state’s internal program uses a strict priority matrix to rank abandoned sites based on environmental and safety risks, with leaking wells and maritime hazards rated the most urgent. Eustis said the federal funding formula initially failed to fully account for the unique, high-cost challenges of plugging wells in coastal wetlands, leaving state officials frustrated.
To balance the federal focus on the north, state officials are directing Louisiana’s internally generated cleanup funds toward the coast. “We have seen the regular, state-funded program putting out more bids in the Lafayette district, which covers everything in South Louisiana,” Eustis said.
Eustis noted that while major operators like Talos Energy are increasingly plugging fields before they ever hit the orphan list, many smaller companies fail to plan for the capital required to produce oil over a long period of time in a hurricane-prone state.
“Over the last couple of years, we’ve seen over a thousand wells dumped onto the orphan list,” Eustis said. “When you go back to the history of the fields that were orphaned, you find they were struck by a hurricane, had a major oil spill, or faced a massive capital expense like replacing a broken tank or platform.”
Eustis pointed to recent back-to-back storms like Hurricanes Ida and Francine, which battered infrastructure in coastal St. Charles Parish wetlands and forced bankrupt operators to abandon their rigs and infrastructure.
Legislation sponsored by state Rep. Jacob Landry, R-Erath, currently under consideration would reduce the mandatory fees companies must pay into the Oil Site Restoration Fund for “low-production” wells. The bill’s supporters say the legislation is intended to prevent premature bankruptcies that would add to the state’s cleanup costs.
