By Wes Venteicher, POLITICO
MERGER, REVISITED: The advocacy group Consumer Watchdog is trying again to get California to impose hefty costs on the recent merger of two giant oil companies.
The group said in a letter to Newsom today that a conflict of interest might have helped California Resources Corporation dodge a bonding requirement it estimates should be more than $2 billion after the company merged with Aera in a deal announced in February.
That’s what the company might have had to pay if it were subject to AB 1167, a law passed last year that requires companies to commit upfront to paying the full costs to eventually plug newly obtained wells. California’s Geologic Energy Management Division determined in June that the merger didn’t trigger the law because it was an all-stock transaction.
Consumer Watchdog called on Newsom to reconsider based on the fact that Jason Marshall, a former director of the agency now known as CalGEM, went to work for CRC in May.
Marshall was a deputy director at the Department of Conservation in 2019, when Consumer Watchdog found out supervisors there held stock in oil companies they regulated, leading to a shakeup.
“Your Administration needs to conduct an independent investigation of how the CRC decision was made and Jason Marshall’s role in CalGEM’s decisionmaking regarding orphan wells,” Consumer Watchdog president Jamie Court said in the letter.
He warned Newsom he’d have to “answer for it in court” if the decision stands.
Newsom spokesperson Alex Stack declined comment and cited CalGEM’s letter explaining its decision in June. — WV
