By John Cox, BAKERSFIELD CALIFORNIAN
A legislative fight important to Kern’s oil industry may come to a head this week as lawmakers consider a pair of bills dealing with idle wells and the question of whether local governments should be able to ban oil-field activities.
Three bills supported by environmental groups but opposed by oil producers are scheduled for consideration Thursday in the Assembly Appropriations Committee. Only legislation that clears the committee can go on for a final vote this legislative session in the Capitol.
One of the three, Assembly Bill 1866, is of particular interest to the industry. It would require oil companies to plug between 10% and 20% of their idle wells every year, depending on their inventory of such facilities.
Under current regulations, oil producers have to either plug and abandon 6% of their long-term idle wells per year — or pay into a state fund set up to remediate so-called orphan wells for which no responsible owner can be found. AB 1866 proposes to eliminate the payment option and effectively increase the annual cleanup burden on oil companies.
Another piece of legislation of interest in Kern, Assembly Bill 3233, would allow local governments to restrict and even phase out industry operations. It is a response to a California Supreme Court ruling last year that found Monterey County had overstepped its authority by banning new oil and gas wells.
The third bill, AB 2716, would impose fines for marginally productive wells within the state’s new 3,200-foot buffer zone between oil and gas operations and sensitive sites such as homes. But it would only apply to the Inglewood Oil Field in Los Angeles County.
The trio of bills is the latest barrage against a prominent industry fighting for its future. Although some regulations have been carried out administratively to protect residents and accelerate the transition to cleaner energy, state lawmakers have shown greater appetite in recent years for using legislation to impose regulations that oil companies say threatens their existence and the livelihood of their employees.
President Jamie Court at Santa Monica-based Consumer Watchdog said AB 1866 has become necessary as the industry shrinks in response to the Newsom administration’s prohibition on fracking and other oil-field techniques. As a result, he said, more and more wells will be idled in the years ahead, potentially leading to leaks that put groundwater and air quality at risk.
“We’re kind of in the stage of phasing out oil production,” Court said. “That means there’s got to be a cleanup operation. We can’t allow the companies that got rich on it to simply walk away from it.”
But people in the industry say AB 1866 is simply the latest attempt by environmental groups to shut down the industry, making the state more dependent on imported crude that costs more to transport and is produced under lax oversight. They contend there is no urgency and that idle wells are already being plugged at an appropriate pace, and that speeding up that work could backfire as more oil producers go bankrupt.
“The narrative by those (environmental) groups is a complete falsehood. Idle wells are not dirty and are not a threat to public health,” said lobbyist Paul Deiro at the Western States Petroleum Association trade group. “We do not have an idle well crisis.”
CEO Rock Zierman at another industry group, the California Independent Petroleum Association, noted that a record 11,000 idle wells have been properly abandoned by operators in the last 2 1/2 years. He said CIPA is working with the bill’s author, Assemblyman Gregg Hart, D-Santa Barbara, on possible changes to the legislation.
“We can increase the baseline number of wells plugged each year, but not at a point that puts companies out of business,” Zierman added.
AB 3233, he pointed out, does not allow local governments like Kern County to approve its own permits; instead, it limits governments to denying permits or adopting more stringent rules.
Court at Consumer Watchdog said the bill was crafted to address nuances on which the California Supreme Court’s ruling turned.
“This bill is meant, bottom line, to make a very clear statement that (if) municipalities want to limit drilling, that has to be respected at the state level,” he said.
