SenateS. 5630119th Congress

Stop Orphaned Wells Act

Full Text

Official text as published. Use Ctrl+F / Cmd+F to search within the document.

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5630 Introduced in Senate (IS)]

<DOC>

119th CONGRESS
  2d Session
                                S. 5630

   To amend the Mineral Leasing Act to ensure sufficient bonding and 
complete and timely reclamation of land and water disturbed by Federal 
       and Indian oil and gas production, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 30, 2026

Mr. Bennet (for himself, Mr. Padilla, Mr. Hickenlooper, Mr. Schiff, and 
  Mr. Lujan) introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL

 
   To amend the Mineral Leasing Act to ensure sufficient bonding and 
complete and timely reclamation of land and water disturbed by Federal 
       and Indian oil and gas production, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stop Orphaned Wells Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) according to the Interstate Oil and Gas Compact 
        Commission, there are in existence not fewer than 140,000 
        documented orphaned well sites, and between 250,000 and 740,000 
        undocumented orphaned well sites, across the United States on 
        Federal, State, Tribal, and private land;
            (2) as of December 2024, the Bureau of Land Management 
        estimated there were more than 15,000 orphaned wells on Federal 
        land;
            (3)(A) orphaned well sites--
                    (i) pose significant public health, safety, and 
                environmental risks; and
                    (ii) should be remediated;
            (B) there are no identified responsible parties to provide 
        for the remediation of those sites; and
            (C) as a consequence, Federal and State taxes are 
        frequently used to provide funding for plugging and reclaiming 
        those sites;
            (4) under the Mineral Leasing Act (30 U.S.C. 181 et seq.), 
        the Secretary of the Interior is required--
                    (A) to ensure the complete and timely reclamation 
                of all Federal onshore oil and gas leases; and
                    (B) to secure financial assurances in the form of 
                bonds, sureties, or other approved financial 
                arrangements for remediation, reclamation, and well 
                closure;
            (5) in November 2021, Congress passed the Infrastructure 
        Investment and Jobs Act (Public Law 117-58; 135 Stat. 429), 
        which--
                    (A) provided $4,700,000,000 in funding to reclaim 
                orphaned wells on Federal, State, Tribal, and private 
                land;
                    (B) required the Secretary of the Interior to 
                establish a program to plug, remediate, and reclaim 
                orphaned wells on Federal land; and
                    (C) required the Secretary of the Interior to 
                reduce the inventory of idled wells on Federal land; 
                and
            (6) the Infrastructure Investment and Jobs Act (Public Law 
        117-58; 135 Stat. 429) helped to address urgent public health 
        and safety and environmental issues associated with existing 
        orphaned wells, but additional action is needed to ensure that 
        oil and gas operators, and not taxpayers, are financing timely 
        and adequate reclamation activities for future orphaned wells.

SEC. 3. REGULATION OF SURFACE-DISTURBING ACTIVITIES.

    Section 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g)) is 
amended--
            (1) in the sixth sentence--
                    (A) by striking ``such entity'' and inserting ``the 
                operator or other entity''; and
                    (B) by striking ``Once the entity'' and inserting 
                the following:
                    ``(C) Issuance of lease after compliance.--Once the 
                operator or other entity'';
            (2) in the fifth sentence, by striking ``Prior to making 
        such determination with respect to any such entity the 
        concerned Secretary shall provide such entity with'' and 
        inserting the following:
                    ``(B) Requirement for notice and opportunity to 
                comply.--Before making a determination under 
                subparagraph (A) with respect to any operator or other 
                entity, the Secretary shall provide to the operator or 
                other entity'';
            (3) by striking the fourth sentence and inserting the 
        following:
            ``(6) Failure or refusal to comply.--
                    ``(A) In general.--The Secretary shall not issue, 
                or approve the transfer or assignment of, any lease 
                under this section to any operator or other entity, or 
                any subsidiary, affiliate, or person controlled by or 
                under common control of that operator or other entity, 
                during any period in which, as determined by the 
                Secretary, the operator or other entity has failed or 
                refused to comply in any material respect with a 
                reclamation requirement or other standard established 
                under this section that is applicable to any other 
                lease of the operator or other entity.'';
            (4) by striking the third sentence and inserting the 
        following:
            ``(4) Financial assurances.--
                    ``(A) Requirement.--
                            ``(i) In general.--The Secretary shall 
                        promulgate regulations to require that a 
                        financial assurance shall be provided by an 
                        operator prior to the commencement of 
                        activities on any lease issued under this Act 
                        to ensure the complete and timely remediation 
                        and reclamation of any land, water, or other 
                        resources (including resources with recreation, 
                        range, timber, mineral, watershed, fish or 
                        wildlife, natural scenic, scientific, or 
                        historical value) adversely affected by lease 
                        activities and operations after the abandonment 
                        or cessation of oil and gas operations on the 
                        lease.
                            ``(ii) Elimination of nationwide financial 
                        assurances.--
                                    ``(I) In general.--An operator may 
                                not provide a financial assurance under 
                                clause (i) on a nationwide basis for 
                                all leases of the operator in the 
                                United States.
                                    ``(II) Requirement.--With respect 
                                to any nationwide financial assurance 
                                in effect on the date of enactment of 
                                the Stop Orphaned Wells Act, the 
                                Secretary shall require that, not later 
                                than 1 year after that date of 
                                enactment, operators shall post 
                                replacement financial assurances in 
                                accordance with this Act.
                    ``(B) Amount.--
                            ``(i) In general.--Subject to clause (ii) 
                        and (iii), the amount of a financial assurance 
                        required under this paragraph shall be the 
                        amount determined by the Secretary to be 
                        sufficient to ensure the complete and timely 
                        remediation and reclamation required under 
                        subparagraph (A)(i).
                            ``(ii) Minimum amounts.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the minimum amount of a 
                                financial assurance required under this 
                                paragraph shall be not less than, as 
                                applicable--
                                            ``(aa) $200,000, in the 
                                        case of a financial assurance 
                                        for surface-disturbing 
                                        activities on an individual oil 
                                        or gas lease; or
                                            ``(bb) $650,000, in the 
                                        case of a financial assurance 
                                        for all oil and gas leases of 
                                        an operator in a State.
                                    ``(II) Idled wells.--Whenever the 
                                total number of idled wells of an 
                                operator equals or exceeds 50 percent 
                                of the total wells owned or operated by 
                                the operator, including wells owned or 
                                operated by a subsidiary of the 
                                operator, the Secretary shall require 
                                from that operator a full liability 
                                bond for the estimated reclamation and 
                                remediation costs associated with all 
                                of the operations of the operator.
                                    ``(III) Increased minimum amounts 
                                for additional categories of 
                                operations.--
                                            ``(aa) Establishment by 
                                        regulation.--In promulgating 
                                        regulations to carry out this 
                                        Act, the Secretary shall 
                                        determine whether higher 
                                        minimum amounts of financial 
                                        assurance should be required 
                                        for any other categories of 
                                        operations that pose heightened 
                                        risks of abandonment or 
                                        environmental harm.
                                            ``(bb) Public petition.--

                                                    ``(AA) In 
                                                general.--Any 
                                                individual may, at any 
                                                time, file a petition 
                                                with the Secretary, in 
                                                such a manner and 
                                                containing such 
                                                information as the 
                                                Secretary may require, 
                                                to establish an 
                                                increased minimum 
                                                amount of financial 
                                                assurance for a 
                                                specific category of 
                                                operations.

                                                    ``(BB) Findings.--
                                                On receipt of a 
                                                petition under subitem 
                                                (AA), the Secretary 
                                                shall make detailed 
                                                findings and provide 
                                                the petitioner a 
                                                written response and 
                                                determination not later 
                                                than 90 days after 
                                                receipt of the 
                                                petition.

                                                    ``(CC) 
                                                Publication.--If the 
                                                Secretary determines 
                                                that a specific 
                                                category of operations 
                                                requires an increased 
                                                minimum amount of 
                                                financial assurance 
                                                under subitem (BB), the 
                                                Secretary shall publish 
                                                in the Federal Register 
                                                the determination with 
                                                the increased amount 
                                                required not later than 
                                                30 days after making 
                                                that determination.

                                    ``(IV) Adjustments for inflation.--
                                Not later than 1 year after the date of 
                                enactment of the Stop Orphaned Wells 
                                Act, and not less frequently than 
                                annually thereafter, the Secretary 
                                shall adjust for inflation the minimum 
                                amounts under subclauses (I) and (III), 
                                as applicable.
                            ``(iii) Additional factors.--The Secretary 
                        shall establish the level of a financial 
                        assurance required under this paragraph above 
                        the applicable minimum level required under 
                        clause (ii) as the Secretary determines to be 
                        appropriate or necessary to ensure the complete 
                        and timely remediation and reclamation required 
                        under subparagraph (A)(i), after taking into 
                        consideration the following factors:
                                    ``(I) The depth of each relevant 
                                proposed wellbore.
                                    ``(II) The presence of other 
                                resources (including resources with 
                                recreation, range, timber, mineral, 
                                watershed, fish or wildlife, natural 
                                scenic, scientific, or historical 
                                value).
                                    ``(III) The number of wells to be 
                                drilled on the lease.
                                    ``(IV) The number and percentage of 
                                idled wells on--
                                            ``(aa) the applicable 
                                        lease; and
                                            ``(bb) any other leases 
                                        held by each applicable 
                                        operator.
                                    ``(V) Any current or past 
                                violations by each operator.
                                    ``(VI) The anticipated condition of 
                                the applicable well site and the extent 
                                of the remediation and reclamation to 
                                be required.
                                    ``(VII) The ability of each 
                                operator to fully carry out that 
                                remediation and reclamation.
                                    ``(VIII) Such other factors as the 
                                Secretary determines to be relevant.
                    ``(C) Review.--
                            ``(i) Prospective.--
                                    ``(I) In general.--With respect to 
                                any financial assurance provided after 
                                the date of enactment of the Stop 
                                Orphaned Wells Act, not less frequently 
                                than once every 5 years, and prior to 
                                approving an assignment, transfer, or 
                                change in operator of a lease, the 
                                Secretary shall review the financial 
                                assurance to determine, after taking 
                                into consideration the factors 
                                described in subparagraph (B)(iii), 
                                whether the amount of the financial 
                                assurance is adequate to ensure the 
                                complete and timely remediation and 
                                reclamation required under subparagraph 
                                (A)(i).
                                    ``(II) Authority to increase.--If 
                                the Secretary determines under 
                                subclause (I) that the amount of a 
                                financial assurance is not adequate, 
                                the Secretary shall increase the amount 
                                of the financial assurance in 
                                accordance with subparagraph (B), 
                                including making an adjustment for 
                                inflation, as appropriate.
                            ``(ii) Retrospective.--
                                    ``(I) In general.--Operators shall 
                                increase or replace all bonds that do 
                                not meet the appropriate minimum amount 
                                of financial assurance required under 
                                subparagraph (B)(ii) not later than--
                                            ``(aa) for nationwide 
                                        bonds, which shall be replaced 
                                        with individual lease or 
                                        statewide bonds, 1 year after 
                                        the date of enactment of the 
                                        Stop Orphaned Wells Act;
                                            ``(bb) for statewide bonds, 
                                        2 years after the date of 
                                        enactment of the Stop Orphaned 
                                        Wells Act; and
                                            ``(cc) for individual oil 
                                        and gas lease bonds, 3 years 
                                        after the date of enactment of 
                                        the Stop Orphaned Wells Act.
                                    ``(II) Authority to increase.--If 
                                the Secretary determines under 
                                subclause (I) that the amount of a 
                                financial assurance is not adequate, 
                                the Secretary shall increase the amount 
                                of the financial assurance in 
                                accordance with subparagraph (B), 
                                including making an adjustment for 
                                inflation, as appropriate.
                    ``(D) Release.--On request, and after inspection by 
                the Secretary, the Secretary may release, in whole or 
                in part, the financial assurance required for a lease 
                under this paragraph if the Secretary determines that--
                            ``(i) the remediation, reclamation, or 
                        permanent plugging covered by the financial 
                        assurance has been completed in accordance with 
                        applicable standards; and
                            ``(ii) all other applicable Federal 
                        requirements have been met.
                    ``(E) Consultation.--The Secretary shall consult 
                with the Secretary of Agriculture prior to making any 
                determination under paragraphs (4), (5), or (6) related 
                to activities on National Forest System land.
                    ``(F) Authority.--Nothing in this section prevents 
                the Secretary of Agriculture from requiring additional 
                financial assurances with respect to activities on 
                National Forest System land.
            ``(5) Temporarily abandoned and shut-in wells.--
                    ``(A) In general.--The Secretary shall promulgate 
                regulations to reduce the inventory of idled wells and 
                temporarily abandoned and shut-in wells on Federal 
                land, including by enhancing oversight of wells that 
                have been temporarily abandoned or shut-in.
                    ``(B) Requirements.--
                            ``(i) Temporarily abandoned wells.--
                                    ``(I) In general.--The Secretary 
                                shall review and may approve a request 
                                from an operator to designate a well as 
                                temporarily abandoned for a period 
                                greater than 30 consecutive days.
                                    ``(II) Designation.--
                                            ``(aa) In general.--A well 
                                        designated as temporarily 
                                        abandoned under subclause (I) 
                                        shall retain that designation 
                                        for a 1-year period, subject to 
                                        renewal under item (bb).
                                            ``(bb) Renewal.--

                                                    ``(AA) In 
                                                general.--Not earlier 
                                                than 10 days before a 
                                                designation under 
                                                subclause (I) is set to 
                                                expire, an operator may 
                                                submit to the Secretary 
                                                a subsequent request to 
                                                designate the well for 
                                                another 1-year period 
                                                as temporarily 
                                                abandoned.

                                                    ``(BB) Limit.--
                                                There is no limit on 
                                                the number of 
                                                subsequent requests an 
                                                operator may submit 
                                                under this item for 
                                                approval by the 
                                                Secretary under 
                                                subclause (I).

                                    ``(III) Requests.--In submitting a 
                                request under subclause (I), an 
                                operator shall--
                                            ``(aa) include--

                                                    ``(AA) adequate and 
                                                detailed justification 
                                                for temporarily 
                                                abandoning the well; 
                                                and

                                                    ``(BB) verification 
                                                of the mechanical 
                                                integrity of the well; 
                                                and

                                            ``(bb) isolate the 
                                        completed intervals prior to 
                                        temporarily abandoning the 
                                        well.
                                    ``(IV) Follow-up.--
                                            ``(aa) In general.--Not 
                                        later than 4 years after the 
                                        temporary abandonment of a well 
                                        under subclause (I), the 
                                        operator shall--

                                                    ``(AA) fully 
                                                complete reclamation, 
                                                as required by 
                                                applicable 
                                                requirements, unless 
                                                the Secretary has 
                                                approved a request to 
                                                delay under item 
                                                (bb)(BB);

                                                    ``(BB) resume 
                                                production in paying 
                                                quantities or commence 
                                                using the well for 
                                                injection or disposal; 
                                                or

                                                    ``(CC) submit to 
                                                the Secretary a 
                                                detailed plan and 
                                                timeline for future 
                                                beneficial use of the 
                                                well.

                                            ``(bb) Beneficial use.--On 
                                        submission of a plan and 
                                        timeline to the Secretary under 
                                        item (aa)(CC), the Secretary 
                                        shall--

                                                    ``(AA) make a 
                                                determination regarding 
                                                whether there is a 
                                                legitimate future 
                                                beneficial use of the 
                                                well; and

                                                    ``(BB) subject to a 
                                                determination that 
                                                there is a legitimate 
                                                future beneficial use 
                                                of the well under 
                                                subitem (AA), grant the 
                                                operator a 1-year 
                                                delay, subject to the 
                                                condition that the 
                                                operator confirms the 
                                                future beneficial use 
                                                of the well and is 
                                                making verifiable 
                                                progress on returning 
                                                the well to that 
                                                beneficial use.

                            ``(ii) Shut-in wells.--
                                    ``(I) Verification and 
                                confirmation.--Not later than 3 years 
                                after a well is designated as shut-in, 
                                the operator shall submit to the 
                                Secretary a verification of the 
                                mechanical integrity of the well and 
                                confirm that the well remains capable 
                                of producing in paying quantities.
                                    ``(II) Follow-up.--
                                            ``(aa) In general.--Not 
                                        later than 4 years after a well 
                                        shut-in, the operator shall--

                                                    ``(AA) permanently 
                                                abandon the shut-in 
                                                well, unless the 
                                                Secretary has approved 
                                                a request to delay 
                                                under item (bb)(BB);

                                                    ``(BB) resume 
                                                production in paying 
                                                quantities; or

                                                    ``(CC) submit to 
                                                the Secretary a 
                                                detailed plan and 
                                                timeline for future 
                                                beneficial use of the 
                                                well.

                                            ``(bb) Beneficial use.--On 
                                        submission of a plan and 
                                        timeline to the Secretary under 
                                        item (aa)(CC), the Secretary 
                                        shall--

                                                    ``(AA) make a 
                                                determination regarding 
                                                whether there is a 
                                                legitimate future 
                                                beneficial use of the 
                                                well; and

                                                    ``(BB) subject to a 
                                                determination that 
                                                there is a legitimate 
                                                future beneficial use 
                                                of the well under 
                                                subitem (AA), grant the 
                                                operator a 1-year 
                                                delay, subject to the 
                                                condition that the 
                                                operator confirms the 
                                                future beneficial use 
                                                of the well and is 
                                                making verifiable 
                                                progress on returning 
                                                the well to that 
                                                beneficial use.

                    ``(C) Publication.--The Secretary shall annually 
                update and publicly publish a database of idled wells 
                and temporarily abandoned and shut-in wells under the 
                jurisdiction of the Secretary.'';
            (5) in the second sentence--
                    (A) by striking ``Secretary concerned'' and 
                inserting ``Secretary, or the Secretary of Agriculture 
                with respect to National Forest System land,''; and
                    (B) by striking ``No permit'' and inserting the 
                following:
            ``(3) Analysis and approval required.--No permit''; and
            (6) by striking the subsection designation and all that 
        follows through ``the Secretary of Agriculture,'' and inserting 
        the following:
    ``(g) Regulation of Surface-Disturbing Activities.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Idled well.--The term `idled well' means a 
                well--
                            ``(i) that has been nonoperational for not 
                        less than 4 years; and
                            ``(ii) for which there is no anticipated 
                        beneficial future use.
                    ``(B) Operator.--The term `operator', with respect 
                to an oil or gas operation, means any individual or 
                entity (including a lessee or operating rights owner) 
                that has provided to a relevant authority a written 
                statement that the individual or entity is responsible 
                for the operation (or any portion of the operation).
                    ``(C) Orphaned well.--The term `orphaned well', 
                with respect to a well or well site under an oil or gas 
                lease issued under this Act, means a well--
                            ``(i)(I) that is not used for an authorized 
                        purpose, such as production, injection, 
                        monitoring, or another approved beneficial use; 
                        and
                            ``(II) for which no operator can be 
                        located; or
                            ``(ii) the operator of which is unable--
                                    ``(I) to plug the well; or
                                    ``(II) to remediate and reclaim the 
                                well site.
                    ``(D) Secretary.--The term `Secretary' means the 
                Secretary of the Interior.
                    ``(E) Shut-in.--The term `shut-in' means a non-
                operational well that is mechanically capable of 
                producing or injecting by opening a valve or activating 
                existing equipment.
                    ``(F) Temporarily abandoned.--The term `temporarily 
                abandoned', with respect to the status of a well, means 
                a non-operational well that--
                            ``(i) is not physically or mechanically 
                        capable of production or injection without 
                        additional equipment or servicing of the well; 
                        but
                            ``(ii) may have a future beneficial use.
            ``(2) Regulation of activities.--The Secretary, or the 
        Secretary of Agriculture with respect to National Forest System 
        land,''.

SEC. 4. PREDECESSOR LIABILITY.

    Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is amended by 
adding at the end the following:
    ``(r) Predecessor Liability.--
            ``(1) In general.--Not later than 60 days after the date of 
        enactment of the Stop Orphaned Wells Act, the Secretary shall 
        promulgate regulations addressing lessee and sublessee 
        responsibility and liability for performing all obligations 
        relating to plugging a well drilled, and removing a facility 
        installed, pursuant to--
                    ``(A) a lease issued under this Act; and
                    ``(B) other applicable law.
            ``(2) Requirements.--In carrying out paragraph (1), the 
        Secretary shall require that--
                    ``(A) the lessee or sublessee, as applicable, shall 
                remain responsible for performing all obligations under 
                the lease until the date that the Secretary approves an 
                assignment of record title interest or transfer of 
                operating rights; and
                    ``(B) after the Secretary approves the assignment 
                or transfer under subparagraph (A), the assignor or 
                transferor will continue to be responsible for lease 
                obligations that accrued before the approval date, 
                whether or not those obligations were identified at the 
                time of the transfer, including--
                            ``(i) paying compensatory royalties for 
                        drainage;
                            ``(ii) responsibility for plugging drilled 
                        wells; and
                            ``(iii) removing facilities installed or 
                        used before the effective date of the 
                        assignment or transfer.''.

SEC. 5. LIMITATIONS ON TRANSFER OF LEASES.

    (a) Definitions.--In this section:
            (1) Covered lease.--The term ``covered lease'' means--
                    (A) an oil or gas lease issued pursuant to the 
                Mineral Leasing Act (30 U.S.C. 181 et seq.), and any 
                interest in that lease; and
                    (B) an oil or gas lease issued pursuant to the 
                Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 
                et seq.), and any interest in that lease.
            (2) Parent company.--The term ``parent company'' means a 
        company that directly or indirectly controls another company.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (4) Subsidiary company.--The term ``subsidiary company''--
                    (A) means any company that is owned or controlled, 
                directly or indirectly, by another company; and
                    (B) includes any subsidiary of the company that is 
                so owned or controlled.
    (b) Limitations.--
            (1) In general.--A leaseholder may not transfer a covered 
        lease to any person, regardless of whether the lease was issued 
        before, on, or after the date of enactment of this Act, unless 
        the Secretary approves the transfer under paragraph (2).
            (2) Application.--
                    (A) In general.--Prior to transferring a covered 
                lease, a leaseholder shall submit to the Secretary an 
                application containing--
                            (i) a financial risk assessment of the 
                        proposed lessee, including an assessment of the 
                        adequacy of the proposed financial assurances, 
                        credit rating (or lack thereof), and bonding of 
                        the lessee;
                            (ii) a complete list of oil and gas leases 
                        and wells owned or operated by the proposed 
                        lessee, along with the operational status of 
                        the wells, including whether any of the wells 
                        are idled wells, temporarily abandoned, or 
                        shut-in (as those terms are defined in section 
                        17(g) of the Mineral Leasing Act (30 U.S.C. 
                        226(g)));
                            (iii) a complete list of past and ongoing 
                        violations of Federal, State, or local laws and 
                        regulations applicable to any of the oil and 
                        gas operations of the proposed lessee; and
                            (iv) any other information that the 
                        Secretary may require.
                    (B) Approval or denial.--After receiving an 
                application submitted under subparagraph (A), the 
                Secretary shall, subject to subparagraphs (D) and (E)--
                            (i) immediately post the proposed transfer 
                        on the website of the Department of the 
                        Interior;
                            (ii) invite public comment on the proposed 
                        transfer for not less than 30 days; and
                            (iii) not later than 90 days after 
                        receiving the application--
                                    (I) approve, conditionally approve, 
                                or deny that application; and
                                    (II) publicly post on the website 
                                of the Department of the Interior the 
                                reasoning for the approval, conditional 
                                approval, or denial, to include whether 
                                the decision was based on information 
                                provided by the public under clause 
                                (ii).
                    (C) Notice.--Not later than 5 days after making a 
                decision under subparagraph (B), the Secretary shall--
                            (i) notify the leaseholder of that 
                        decision; and
                            (ii) post the decision on the website of 
                        the Department of the Interior.
                    (D) Additional bonding.--The Secretary shall 
                conditionally approve an application under subparagraph 
                (B), subject to the condition that the leaseholder 
                acquires additional bonding to offset any financial 
                risks identified during the review of the application 
                by the Secretary.
                    (E) Mandatory denial.--The Secretary shall deny an 
                application under subparagraph (B) if the proposed 
                lessee--
                            (i) has filed a petition for bankruptcy 
                        under title 11, United States Code;
                            (ii) does not, along with any parent 
                        company of the proposed lessee, possess an 
                        investment grade credit rating from a 
                        nationally recognized statistical rating 
                        organization (as defined in section 3(a) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78c(a)));
                            (iii) has no prior record of safe and 
                        compliant oil or gas production operations 
                        within the preceding 5 years; or
                            (iv) is a subsidiary company of a parent 
                        company and fails to demonstrate a debt-to-
                        equity ratio of less than 2 to 1, unless the 
                        parent company provides an unconditional 
                        corporate guarantee for all liabilities under 
                        the covered lease.

SEC. 6. FITNESS TO OPERATE STANDARDS.

    The Mineral Leasing Act is amended by inserting after section 37 
(30 U.S.C. 193) the following:

``SEC. 38. FITNESS TO OPERATE STANDARDS FOR OIL AND GAS ACTIVITIES.

    ``(a) Definitions.--In this section:
            ``(1) Covered entity.--The term `covered entity', with 
        respect to a recipient responsible party, means--
                    ``(A) any parent company of the recipient 
                responsible party;
                    ``(B) any subsidiary company of the recipient 
                responsible party;
                    ``(C) any entity with which the recipient 
                responsible party enters into a contract to construct, 
                develop, maintain, or operate a facility on Federal 
                land subject to this Act; and
                    ``(D) any entity that--
                            ``(i) shares officers, directors, or key 
                        managerial personnel with any entity described 
                        in subparagraph (A) or (B); or
                            ``(ii) is a predecessor to any entity 
                        described in subparagraph (A) or (B).
            ``(2) Decommissioning.--The term `decommissioning', with 
        respect to oil and gas infrastructure on Federal land subject 
        to this Act, means--
                    ``(A) ending an oil and gas operation;
                    ``(B) permanently plugging a well;
                    ``(C) monitoring the efficacy of activities to end 
                an oil and gas operation, including monitoring the 
                safety and soundness of a plugged well; and
                    ``(D) returning the area subject to the lease, 
                right-of-way, permit, or other authorization to a 
                condition that meets the environmental reclamation 
                requirements of the Department of the Interior and any 
                other Federal agency that has jurisdiction over the oil 
                and gas operation.
            ``(3) Parent company.--The term `parent company' means a 
        company that directly or indirectly controls another company.
            ``(4) Recipient responsible party.--The term `recipient 
        responsible party' means an entity seeking the 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 subject to this Act.
            ``(5) Secretary.--The term `Secretary' means the Secretary 
        of the Interior.
            ``(6) Subsidiary company.--The term `subsidiary company'--
                    ``(A) means any company that is owned or 
                controlled, directly or indirectly, by another company; 
                and
                    ``(B) includes any subsidiary of the company that 
                is so owned or controlled.
    ``(b) Requirement for Approvals.--Beginning on the date on which 
the Secretary issues or revises regulations under subsection (c)(4), 
the Secretary may not issue, extend the term of, or approve the 
transfer of, a lease, right-of-way, permit, or other authorization for 
oil or gas exploration, development, or production on Federal land 
subject to this Act with respect to a recipient responsible party, 
unless the recipient responsible party is certified as fit to operate 
in accordance with subsection (c).
    ``(c) Certification of Fitness To Operate.--
            ``(1) In general.--The Secretary shall certify a recipient 
        responsible party as fit to operate based on--
                    ``(A) the past compliance of the recipient 
                responsible party, and any covered entity of the 
                recipient responsible party, with Federal, State, and 
                local environmental and safety laws and regulations, 
                including deadlines and requirements related to 
                environmental reclamation, decommissioning, and worker 
                safety;
                    ``(B) the financial solvency and capacity of the 
                recipient responsible party, and any covered entity of 
                the recipient responsible party, to weather market 
                shocks and fulfill current and projected 
                decommissioning liabilities; and
                    ``(C) any other criteria with respect to the 
                recipient responsible party, and any covered entity of 
                the recipient responsible party, as the Secretary 
                determines appropriate.
            ``(2) Initial request for certification.--A recipient 
        responsible party may request to be certified as fit to operate 
        pursuant to the process established by regulation under 
        paragraph (4).
            ``(3) Maintenance of certification.--
                    ``(A) Requirement.--A certification that the holder 
                of a lease, right-of-way, permit, or other 
                authorization for oil or gas exploration, development, 
                or production on Federal land subject to this Act 
                issued, extended, or transferred after the date on 
                which the Secretary issues or revises regulations under 
                paragraph (4) is fit to operate shall be maintained in 
                accordance with subparagraph (B).
                    ``(B) Annual compliance verification.--
                            ``(i) In general.--The Secretary shall 
                        annually assess whether each holder of a lease, 
                        right-of-way, permit, or other authorization 
                        described in subparagraph (A) remains in 
                        compliance with standards established pursuant 
                        to paragraph (4).
                            ``(ii) Suspension of certification.--If the 
                        Secretary determines under subparagraph (A) 
                        that a holder of a lease, right-of-way, permit, 
                        or other authorization described in 
                        subparagraph (A) is not in compliance with the 
                        standards established pursuant to paragraph 
                        (4), the Secretary shall suspend the 
                        certification and impose 1 or more of the 
                        following penalties until that holder complies 
                        with the standards:
                                    ``(I) Suspend the applicable lease, 
                                right-of-way, permit, or other 
                                authorization pursuant to section 
                                5(a)(1).
                                    ``(II) Issue a fine or other civil 
                                penalties.
                                    ``(III) Require supplemental 
                                financial assurance in an amount equal 
                                to the total expected cost of 
                                decommissioning, as applicable.
                                    ``(IV) Issue an order to the holder 
                                of the lease, right-of-way, permit, or 
                                other authorization to commence 
                                decommissioning, including a 
                                requirement that the entity develop and 
                                submit a decommissioning plan pursuant 
                                to section 3162.3-4 of title 43, Code 
                                of Federal Regulations (or a successor 
                                regulation) for approval by the 
                                Secretary, and issue a notice to any 
                                previous holders of the lease, right-
                                of-way, permit, or other authorization 
                                to commence joint and several liability 
                                proceedings.
            ``(4) Regulations.--Not later than 1 year after the date of 
        enactment of the Stop Orphaned Wells Act, the Secretary shall 
        promulgate or revise regulations--
                    ``(A) to establish standards, in accordance with 
                this section, that the Secretary shall use to determine 
                whether to certify a recipient responsible party as fit 
                to operate;
                    ``(B) to establish a process for recipient 
                responsible parties to request such certification; and
                    ``(C) to carry out any other requirements of this 
                section.
    ``(d) Report to Congress.--Not later than 1 year after the 
Secretary issues or revises regulations under subsection (c)(4), and 
annually thereafter, the Secretary shall submit to Congress a report 
that includes a summary of the most recent assessments made under 
subsection (c)(3)(B), including a list of--
            ``(1) each person that holds an active or inactive lease, 
        right-of-way, permit, or other authorization for oil or gas 
        exploration, development, or production on Federal land subject 
        to this Act that failed to meet any of the standards 
        established pursuant to subsection (c)(4);
            ``(2) the specific standards for which the person is or was 
        non-compliant, disaggregated by--
                    ``(A) person; and
                    ``(B) lease, right-of-way, permit, and other 
                authorizations; and
            ``(3) enforcement actions taken by the Secretary against 
        each person identified under paragraph (1).
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section $30,000,000 for 
each of fiscal years 2028 through 2032.''.
                                 <all>