By Dan Bacher, The Daily Kos
The supposedly “green” state of California could be facing a $21.5 billion tab to decommission oil company sites and infrastructure, $13.2 billion of that to clean up the oil wells, if mechanisms are not in place to ensure polluters cover the costs themselves, a new report out today from CarbonTracker reveals.
The report. “There Will Be Blood: Decommissioning California’s Oil Fields,” finds that even if all projected profits of these companies were utilized for clean up, taxpayers would still be left with a $6.9 billion bill. The report comes as oil companies and refiners report record-high profits in recent quarters.
In response to the report’s release, environmental justice advocates are calling for the immediate passage of AB 1167, legislation that will ensure oil companies secure bonds for full clean up of wells when transferring ownership, as well as an end to oil and gas subsidies.
“Companies like Chevron, that own the most wells in California, tripled their profits in 2022, and benefit the most from tax breaks and subsidies, have more than enough money to pay for clean up costs,” according to a press statement from advocacy groups. “Additional policies are needed to ensure Californians are not on the hook for cleaning up oil and gas sites.”
“California consumers have been subsidizing oil and gas with their tax money and their health from the production, refining, and combustion of oil and gas,” said Liza Tucker, Consumer Advocate with Consumer Watchdog. “The tab to California, based on Consumer Watchdog’s extensive research, shows that the true cost to the public of California’s oil and gas production and combustion is estimated to reach $10 Trillion by 2045.”
“It is high time to stop subsidizing oil and gas by continuing to incur staggering future public costs,” continued Tucker. “Oil companies want to leave Californians with the tab for closing wells and cleaning up the environmental damage or are offloading wells right now smaller players without the financial wherewithal to close wells later. Californians should not be left holding the bag for tens of billions of dollars to plug wells. Increasing bonding amounts to appropriate levels in legislation—and measures to ensure that when wells are offloaded by oil companies, bonds are put up close to those wells later—is critically important.”
“Big Oil has polluted our land, water, air, communities and our political system for their benefit,” said Ilonka Zlatar with the Oil and Gas Action Network. “Governor Newsom has begun to hold them accountable for price gouging Californians, but they continue to benefit from tax breaks while reaping record profits and skirting responsibilities of cleaning up and properly plugging wells which keep our communities sick. There is no reason to continue giving tax breaks to Big Oil, they should be paying for the damage they have caused.”
According to the report, California’s oil and gas producing resources have been in overall decline for nearly four decades, but the industry turned a corner downward with the price collapse of 2015.
“The inherent cyclicality of the commodity markets overlapped with the intrinsic depletion of the aged resource base and accelerated the decline of the onshore industry. Since 2014, onshore oil production in California has decreased by 42%, and production from gas wells has dropped even further,” the report notes.
“More importantly, for the first time in decades, new drilling slowed, and the number of actively producing wells also declined even before increasing political pressure,” the report said.
“Several sources of funds for decommissioning do exist, but the total falls far short of the money required. Oil and gas companies have provided $106 million in financial assurance for onshore wells, less than one percent of their overall closure and clean-up costs. An estimated $265 million in state and federal taxpayer money has been allocated to pay for costs inherited from defunct oil companies. Taxpayers are on the hook for much more than industry has set aside, and the remaining unfunded liability is dozens of times larger than these existing funds,” the group wrote.
How did we come to this place where California taxpayers could be stuck with paying $6.9 billion to close and clean up oil wells at the same time that that cynical politicians continue to spout false rhetoric that the state is the nation’s “green” and “progressive” leader?
It’s all due to systemic deep regulatory capture of California regulators and politicians by Big Oil and Big Gas from top to bottom.
Big Oil sponsors awards and events for California and national journalists
The Western States Petroleum Association (WSPA), the largest corporate lobbying group in California, and big oil companies exercise their influence and power through a very sophisticated and well-oiled machine that has captured the entire system in the supposedly “green” and “progressive” state.
WSPA wields their power in 8 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) sponsoring awards ceremonies, including those for legislators and journalists; (7) contributing to non profit organizations; and (8) creating alliances with labor unions.
In one of the clearest examples of the collaboration between Big Oil and the media, the Western States Petroleum Association sponsored a “media dinner” on Tuesday, February 28, 2028 in Sacramento as part of #BizFedSactoDays.
The flyer for the event stated, “Journalists who play an outsize role in shaping narratives about state politics and holding lawmakers accountable will join business leaders to pull back the curtain on how they select and tell stories about California policies, policy and power.”
Featured speakers at the program included Coleen Nelson of the Sacramento Bee, Laurel Rosenhall of the Los Angeles Times, Kaitlyn Schallhorn of the Orange County Register and Dan Walters of Cal Matters.
In a tweet, Catherine Reheis-Boyd, President of the Western States Petroleum Association (WSPA) and former Chair of the Marine Life Protection Act (MLPA) Initiative Blue Ribbon Task Force to create “marine protected areas” in Southern California, gushed:
“One of our favorite times of year is #BizFedSactoDays- when @BizFed helps amplify the presence and power of business in California. And we’re honored to host the Media Dinner and featured media speakers! @DanCALmatters @[email protected] @K_Schallhorn”
Then on March 16, the Sacramento Press Club announced in a tweet that WSPA was the new “Lede Sponsor” of the Sacramento Press Club’s Journalism Awards Reception that was held on March 29: “Thank you to our new Lede Sponsor @officialWSPA! WSPA is dedicated to guaranteeing that every American has access to reliable energy options through socially, economically and environmentally responsible policies and regulations. Learn more more at http://wspa.org”
In response to this tweet, investigative journalist Aaron Cantu tweeted back on March 20, “As the recipient of @SacPressClub ’s environmental award last year, it’s concerning to see fossil fuel industry talking points passed off uncritically here. WSPA becoming lede sponsor happened in the context of a global PR turn as the climate crisis worsens.”
I totally agree with Cantu.
There is no doubt that WSPA and Big Oil have for years worked closely with media outlets — yet I’m the one lone journalist who has consistently and relentlessly reported on this.
In 2015, I wrote this article about how LA Times and the California Resources Corporation (formerly Occidental Petroleum) teamed up on a propaganda website: https://www.dailykos.com/story/2015/10/30/1442947/-LA-Times-and-Big-Oil-team-up-on-propaganda-website. Fortunately, the Times is no longer managing and running that website, according to my research.
More recently, Catherine Reheis-Boyd, WSPA President, was on the “short list” of nominees for the LA Times “Inspirational Women Awards” held on October 18, 2022.
Can you guess who was one of the sponsors of the LA Times awards? Yes, you guessed right — WSPA was a sponsor.
According to a tweet from @OfficialWSPA, “Today @latimes acknowledged a woman who is already well known in our industry as a trailblazer and inspiration to tens of thousands of women. Congrats to our fearless leader @WSPAPrez for being recognized as a shortlisted nominee for the Inspirational Women Awards.”
In addition, four LA Times reporters last year received the “Courage in Journalism” award from the Sacramento Press Club in 2022. Yes, the Western States Petroleum Association was one of the sponsors of these awards last year also.
In addition to sponsoring journalism events in California, the Western States Petroleum Association has expanded its campaign to influence journalists nationally. WSPA and the controverial waste management firm Veolia North America sponsored this year’s Society of Environmental Journalists (SEJ) conference, according to a report from DeSmog: scq.io/…
“The agenda for the conference, which is being hosted in Boise, Idaho, shows that the Western States Petroleum Association (WSPA) and the waste management company Veolia North America are sponsoring two of the “beat dinners” hosted on Friday, April 21 — the third day of the event,” the article by Adam Bright reported.
Despite falling oil production, CalGEM approves 897 oil drilling permits in 3 months
Big Oil’s campaign to influence the political system and the journalists that cover it has real world consequences in California, where oil drilling permits have skyrocketed.
In a major display of Big Oil’s continuing political power in California, a total of 897 oil drilling permits have been approved since the start of the year by CalGEM, the state’s oil and gas regulator, despite that fact that onshore oil production in California has decreased by 42% since 2014.
Of those wells, 556 permits (62%) were issued inside the 3200 foot health protection zones that would have been created by Senate Bill 1137, according to an analysis by Kyle Ferrar, Western Coordinator of the Fractracker Alliance.
This brings the total number of permits to an astounding 14,622 new and reworked oil drilling permits approved by CalGEM since Jan. 2019, when Newsom took office.
According to FracTracker’s analysis of data from state oil regulator CalGEM, permits were issued within 3,200 feet of Los Angeles, Ventura, Kern, Central Coast and Northern California communities. Download a map of permit approvals within the 3,200’ health protective zone.
The California Independent Petroleum Association (CIPA) sponsored the referendum that has delayed the implementation of the setbacks law for two years. Filings with the California Secretary of State reveal that oil companies funneled over $20 million to the committee Stop the Energy Shutdown, a “Coalition Of Small Business Owners, Concerned Taxpayers, Local Energy Producers And The California Independent Petroleum Association.
The oil and gas industry spent over $34.2 million in the 2021-22 Legislative Session lobbying against SB 1137, legislation to mandate 3200 foot buffer zones around oil and gas wells, and other bills they were opposed to.
For the oil companies, this was just pocket change when you consider that combined profits of California oil refiners, including PBF Energy, Chevron, Marathon Petroleum, Valero, and Phillips 66, were $75.4 billion in 2022.
Big Oil spent a total of $4,220,214 in lobbying expenses in the last quarter from Oct. 1 to Dec. 31, 2022, according to data posted on the California Secretary of State’s website. That brings the total of oil and gas corporation lobbying expenses to $34,270,001 in the eight quarters of the 2021-22 session: cal-access.sos.ca.gov/…
The Western States Petroleum Association, the trade association that represents companies that account for the bulk of petroleum exploration, production, refining, transportation and marketing in the five western states of Arizona, California, Nevada, Oregon, and Washington, spent $11,720,912 in the 2021-22 session.
Chevron Corporation, the San-Ramon based oil giant that is infamous for environmental devastation and degradation from the Ecuadorian Amazon to Richmond, California, spent a total of $8,631,118 lobbying California officials in the 2021-22 session.
While a long and hard-fought campaign by environmental justice groups, with the help of Governor Gavin Newsom, was able to finally get SB 1137 approved by the Legislature, other important bills were stopped by oil industry-backed legislators.Those measures include a bill to ban offshore drilling off the California coast and another bill to divest State of California pension funds from investments in the fossil fuel industry.
Big Oil pumps $9.4 million into California lobbying in 3 months
Although the $18 million that Big Oil spent on lobbying California officials in 2022 was outrageous, the gusher of money the oil and gas industry is spending in their campaign to control the regulatory apparatus is even worse this year to date.
Big Oil spent $9.4 million attempting to influence the California Legislature, Governor’s Office and agencies in the first quarter of 2023, according to lobbying disclosures by the oil and gas industry now posted on the California Secretary of State’s website.
“The dollar amount puts Big Oil on pace to greatly exceed the $18 million it spent lobbying in Sacramento in 2022, with $3.7 million spent in Q1 of 2022 and nearly $10 million spent by mid-year 2022,” according to a press statement from Voices in Solidarity Against Oil in Neighborhoods (VISION).
Normally the Western States Petroleum Association (WSPA) tops the quarterly oil lobbying spending, but Chevron led the lobbying expenditures for January-March 2023.
Chevron came in first with over $4.9 million spent in the first quarter, while the Western States Petroleum Association finished second with over $2.3 million and Aera Energy finished third with nearly $628,000.
Oil refiners affected by the price gouging penalty legislation — Chevron, Marathon, Phillips 66, Valero and PBF Energy — spent a combined $5.6 million, noted VISION.
While the 2023 spending by Big Oil is out-of-control, the latest P.R. push by Big Oil — and the apparent embrace of this campaign by journalists — truly marks the end of political satire in “green” California.
When #BigOil teams up with journalists, columnists and editors at events and only a couple of writers thinks there’s something wrong with this, you know we must be in deep trouble.