By Dan Bacher, RED GREEN & BLUE

September 24, 2022

http://redgreenandblue.org/2022/09/24/setbacks-ca-finally-banned-oil-dr…

It didn’t take long for the oil industry to challenge Governor Gavin Newsom’s signing into law SB 1137, the bill that mandates 3200 foot health and safety setbacks between new and reworked oil wells and homes, schools, hospitals, day care centers and other facilities.

ust 3 days after a bill signing ceremony on Friday, September 16, in Vallejo where California Governor Gavin Newsom “made good on his promise to mandate the buffer zones between oil drilling and communities,” the powerful oil industry in California launched a campaign to undo the state’s long-fought for buffer zones, according to the Last Chance Alliance.

On Monday, oil and gas industry insider Jerome Reedy, a board member of the California Independent Petroleum Association and treasurer of the California Natural Gas Producers Association, filed a referendum with the California Attorney General’s office to reverse SB 1137.

Prior to the passage of SB 1137, California required no minimal setbacks between frontline communities and oil and gas wells like other states including Colorado, Pennsylvania and North Dakota already do.

The link to the filing is here: oag.ca.gov/…

According to the filing:

“This bill would prohibit, commencing January 1, 2023, the division (CalGEM) from approving any notice of intention within a health protection zone, as defined, except for reasons related to preventing or responding to a threat to public health, safety, or the environment, complying with a court order, or to plug and abandon or reabandon a well, as provided. The bill would also explicitly authorize the division to approve notices of intention to public and private entities who own, purchase, or lease land containing idle-deserted or previously plugged and abandoned wells for the purposes of those public and private entities plugging and abandoning, or replugging and abandoning, those oil and gas wells so development of nonfossil fuel production and injection and related uses can proceed, as provided. 

“The bill would require an operator who submits a notice of intention, except for certain notices of intention, to also submit either a sensitive receptor inventory and map of the area within the 3,200 feet radius of the wellhead or proposed wellhead location to the division, or a statement certifying that the operator has confirmed that there are no sensitive receptors, as defined, located within 3,200-foot of the wellhead location, as provided. If a notice of intention is approved pursuant to compliance with a court order, the bill would require the operator of the oil or gas well to provide an individual indemnity bond sufficient to pay the full cost of properly plugging and abandoning the operator’s well or wells, and decommissioning any attendant production facilities in the health protection zone, as provided.”

Nielsen Merksamer, a law and lobbying firm that works with all of the major oil companies, filed the initiative. The firm’s clients include Exxon Mobil, Chevron, BP, and Phillips 66, as well as a number of oil industry coalitions and front groups, including California Carbon Capture Coalition, Californians for Energy Independence, and the California Labor Oil Management Alliance, the Last Chance Alliance noted.

Yesterday, during a fireside chat with the Clinton Global Initiative at NYC Climate Week, Gov. Newsom stated:

“These entrenched interests—we may be dominated by Democrats [in California] but many of us are wholly owned subsidiaries of the fossil fuel industry. I mean they play hard. We did a 3200-foot setback bill for health and safety and they just filed a referendum yesterday. Big Oil–these guys aren’t going away,”

Gov. Newsom committed to enacting a 3,200-foot setback separating homes, schools and parks from industrial fossil fuel operations last October although two similar bills had previously failed in the legislature. The Alliance said Newsom visited the Capitol with a plea to Democrats in both houses to pass setbacks as part of his top five climate priorities for the state.

Newsom confirmed this during his remarks yesterday:

“I had to jam my own Democratic legislature in the last few weeks of our session to get four critical bills of the 40 climate bills done… had I not done that all of those special interests would have prevailed again to deny and delay.”

The Attorney General’s office has 10 days to prepare the circulating title and summary for the referendum. Proponents will then have 90 days to gather the required number of valid signatures, giving them a deadline of approximately December 15.

If proponents can get the necessary 623,000 signatures to qualify for the ballot, the law will be put on hold until 2024. This would be potentially the 8th proposition on California’s 2024 ballot.

Senator Lena Gonzalez, the co-author of SB 1137 with Senator Monique Limón, said in a September 19 tweet responding to the filing of the initiative by the oil industry, “No amount of $$ will combat the will of so many Californians who believe that EJ communities should be prioritized with #SB1137 – oil well setbacks are the right thing to do!”

Woody Little, the interim campaign lead at the Last Chance Alliance, also commented on the challenge to SB 1137 by the oil industry in a tweet on September 20:

“Just three days after @GavinNewsom signed a landmark climate package, a CIPA (CA oil) board member tries to overturn a key plank: #SB1137, the setbacks bill. While Newsom is at NY Climate Week no less. Outrageous attack on CA’s #climateleadership. New heights of #PolluterGreed.”

Background: CalGEM has approved 11,669 oil drilling permits since 2019

Newsom signed SB 1137 into law as California continue to issue thousands of oil and gas drilling permits every year. Second quarter permit approvals pushed the overall number of oil drilling permits approved since Newsom came to office in January 2019 to 11,669, according to an analysis by Consumer Watchdog and Fractracker Alliance. The permits are posted on a map at www.newsomwellwatch.com

In the first two quarters of 2022, the California Geologic Energy Management Division (CalGEM) issued 1,326 total permits, including 216 new well permits and 1,110 oil well rework permits.   

The groups revealed that State approvals for permits to fix or deepen existing oil wells skyrocketed in the second quarter by 124% over the same time last year. “Some of the permit approvals by CalGEM are for idle wells and wells that barely produce, and both types can leak deadly methane and other harmful pollutants,” they said.

“These are permit approvals to rework old wells that the oil industry wants to squeeze dry,” said consumer advocate Liza Tucker. “The state makes it far cheaper for oil companies to continue beating a dead horse than cement those wells shut, including wells that will never come back online or only produce 10 or 15 barrels of crude a day.  State policy is misguided.  Newsom should mandate that any wells near or in neighborhoods and any that are idle for more than a few years or barely producing oil should be shuttered to stop and prevent leaks.”

She noted that Bakersfield residents over the past month have discovered more than 40 idle wells leaking methane and volatile organic compounds (VOCs) belonging to five different oil companies in suburban subdivisions of Bakersfield.  Residents experienced fatigue, headaches and stomachaches. VOCs can negatively affect breathing, the nervous system and cause cancer.

“This can be attributed to CalGEM’s policy of conducting many of their inspections remotely from regulators’ desks, rather than conducting in-person inspections at the well sites in the field,” said Kyle Ferrar, a coordinator for FracTracker Alliance. “Oil and gas companies can use these reworks to continue to kick the bucket down the road instead of paying the necessary costs to plug these idle wells. That’s because there is very little oversight from CalGEM and no repercussions for leaking wells, as we have seen in Bakersfield.”

During the second quarter, permit approvals to drill both new oil and gas production wells and wells using harsh and dangerous methods of extraction known as “enhanced oil recovery” (EOR), fell by half over the second quarter last year though permits to specifically drill new EOR wells rose by 10%, the groups stated.

“Of all 2022 permit approvals to rework wells, 31% were issued for idle wells,” according to Ferrar.  “Available data makes it hard to determine how long the wells have been idle. Legislation passed several years ago requires to provide an annual list of idle wells, their age, and their status. CalGEM published the last report in 2019 and has not published another since.”

“According to oil industry information gathered by the California Council on Science and Technology, there are at least 70,000 idle wells in the state, and many are 20-40 years old. Some have been idle for 80 years. That’s 40,000 more idle wells than officially reported by CalGEM,” Ferrar reported.

“It is critically important that the public has access to the list of ide wells as many could be leaking in urban and suburban settings and residents don’t even know that they are there,” added Tucker. “There are tens of thousands of these wells and they can be like ticking time-bombs for nearby communities.”

Hazardous spill reports filed by CalGEM showed some of the Bakersfield wells were releasing methane, a potent greenhouse gas, at concentrations of above 50,000 parts per million. These are public health hazards, since at these outdoor concentrations, just the click of a lighter can cause an explosion and the same indoor levels can be deadly to residents, according to PSE Healthy Energy, a research institute, stated Tucker.

California oil and gas regulators have also approved 150 offshore drilling permits in state waters since January 1, 2019. Of those permits, five were for new wells and the rest were for reworking existing wells, according to Consumer Watchdog and FracTracker Alliance.