California’s multibillion-dollar problem: Oil industry lobbies to limit its cleanup obligations

California’s multibillion-dollar problem: Oil industry lobbies to limit its cleanup obligations

People living near unplugged oil and gas wells face exposure to cancer-causing chemicals, and toxic residue brought up by drilling below Earth’s surface can contaminate aquifers that could become future drinking water supplies.

This year, California lawmakers are considering a bill that would create a 2,500-foot buffer separating wells from homes, schools, hospitals and other public buildings.

According to a Times/Public Integrity analysis, more than 2 million Californians live within that distance of an unplugged oil or gas well, with Latino, black and low-income people living nearby at a slightly higher rate than the California population as a whole. Half of those 2 million people reside in Los Angeles.

In 2016, when lawmakers were considering legislation that ultimately overhauled the management of idle wells, the Western States Petroleum Association, a trade group representing oil and gas interests, reported spending $7 million to lobby on it and other bills. Over the last five years, the trade group pumped more than $41 million into lobbying in California, by far the most of any organization in the state.

Das Williams, now a Santa Barbara County supervisor and formerly a Democratic member of the Legislature, sponsored the 2016 legislation after it became clear that decommissioning offshore oil infrastructure would be costly for the state. That law also increased state bonding, although not to the level its authors had hoped. Williams said that industry groups occupied an opposing seat at the bargaining table and that the bill’s language was “a product of haggling.”

The resulting changes to how the state manages idle wells have produced some progress on cleanup, according to a study CalGEM released in November. Companies plugged 988 long-term idle wells in 2018, and nine operators decommissioned more wells than the statute required.

But companies continue to put off more expensive cleanup jobs in urban areas such as Los Angeles, instead focusing on rural wells that are easier to decommission, mainly in Kern County. That finding is based on data the Times and Public Integrity obtained for every well-plugging plan that operators submitted and CalGEM approved in 2019.

Because the money that defunct companies had set aside for cleanup usually falls short, the state relies on fees on idle wells and production. By law, CalGEM isn’t allowed to spend more than $3 million a year to plug orphan wells, a temporary increase that will drop back to $1 million after 2021.The agency has plugged more than 1,350 such wells since 1977.

From Appalachia to the Mountain West, many other states are in a similar predicament, struggling to address cleanup of old oil wells. Utah acknowledged a funding shortfall in November, for example, and Colorado announced cleanup would cost 14 times more than what companies set aside.

By Mark Olalde, The Center for Public Integrity