Kansas Corp. Commission proposes reimbursement pathway for private plugging of long‑abandoned wells

The Kansas Corporation Commission’s conservation division proposed a new reimbursement process for private parties who plug long‑abandoned oil and gas wells, telling the committee the change responds to longstanding landowner and industry concerns.

Ryan Hoffman, director of the KCC conservation division, said the proposed regulation would let parties who are not legally responsible for plugging an abandoned well apply for reimbursement if the well has been abandoned for at least five years. Hoffman described a multi‑year legislative and administrative process that began in 2019 and culminated in statutory changes and a 2021 law; the KCC said its priorities shifted when it received roughly $25 million from the federal Infrastructure Investment and Jobs Act to plug abandoned wells, but the agency resumed the reimbursement regulation work after that program was underway.

Under the proposed rule, applicants would submit an application; the KCC would determine eligibility and the reasonableness of estimated plugging costs; approved applicants could undertake plugging work using a KCC‑licensed contractor and seek reimbursement within six months of the approved plugging application. The regulation includes an exception process for time‑sensitive or emergency plugs.

Committee members sought details on fund size and mechanics. KCC staff said the current abandoned‑well plugging account balance is roughly $3.7 million and that annual assessments and other receipts typically bring in about $1 million a year, while annual spending has been roughly $1 million in recent years. Hoffman said the state has spent about $43 million on plugging since 1996 and that the federal $25 million award allowed the KCC to focus on high‑priority wells.

Lawmakers asked practical questions about how plugging is performed and who may carry out the work; KCC staff said plugging must be done by a KCC‑licensed contractor and noted that proper casing removal, plugging of salt sections and protection of usable water zones are part of standard plugging procedures. Representative Wagner asked why Kansas has the program; KCC said a primary public benefit is protecting agricultural operations and property values and avoiding environmental issues from legacy wells. Hoffman said other states have shown interest in Kansas’s approach.

The committee did not adopt the rule at the hearing and asked the KCC to provide any necessary additional documentation about implementation and fund projections.