BY WES VENTEICHER, POLITICO
SACRAMENTO, California — A new proposal in the California State Assembly would impose a $10,000-per-day fine on oil companies operating low-production oil and gas wells within 3,200 feet of most occupied buildings.
AB 2716, a gut-and-amend that Assembly Natural Resources Committee Chair Isaac Bryan announced Tuesday, aims to penalize oil companies for operating marginal wells in a perimeter in which studies have shown perinatal and other health risks are elevated.
“We’ve got to shift the cost from the people and the cost back to the folks who are harming the people,” Bryan said during a panel moderated by POLITICO at The Climate Center’s California Climate Policy Summit in Sacramento.
Why it matters: The proposal opens another front in an offensive the Legislature has mounted against the oil and gas industry as California tries to wind down fossil fuels and transition to renewables while also avoiding gasoline price spikes.
SB 1137, a 2022 law that the oil industry is challenging via a November ballot initiative, uses the same perimeter in banning new wells and redrills of existing wells.
Details: Bryan’s proposal identifies low-production wells as those producing fewer than 15 barrels of oil or 60,000 cubic feet of gas per day. It would require the Conservation Department’s Geologic Energy Management Division to identify all low-production wells within the 3,200-foot setback zone by July 2025.
The nonprofit FracTracker, which has supported a 3,200-foot setback zone, estimates there are more than 28,000 wells within the 3,200-foot setback zone, including low-production wells and those that produce more.
According to U.S. Energy Information Administration data from 2022, about 82 percent of active wells in California produce fewer than 15 barrels per day. The EIA data doesn’t include distances from occupied buildings.
Context: The Legislature this year will also consider Assemblymember Laura Friedman’s AB 3155, which would hold oil companies liable for certain respiratory ailments, pre-term births and high risk pregnancies and cancers within 3,200 feet of wells. The same proposal in SB 556 from Sen. Lena Gonzalez failed last year amid opposition from the oil industry, labor and business groups.
The California Independent Petroleum Association challenged SB 1137, which uses the same perimeter, under the state’s referendum process, gathering enough signatures to pause it until this November, when voters will decide whether to keep the law or reject it unless CIPA withdraws it by June 27.
Environmental advocates last year and this year have focused on a different line of attack, targeting unused and little-used oil wells they say companies have been slow to plug due to the costs.
A new proposal this year, AB 1866 from Assemblymember Gregg Hart, would require companies to develop plans with the state’s oil and gas supervisor to speed up plugging of all unused wells.
What’s next: Bryan said he planned to introduce the bill Tuesday.
