49 organizations submit letter supporting full bonding for oil well plugging and cleanup

Environment California and NRDC, co-sponsors of Assembly Bill 1167 (AB 1167), submitted a letter of support signed by 49 groups to Assembly Member Wendy Carrillo on Monday. This bill would protect the environment and public health of California’s communities from the dangers of orphaned and idle oil wells, ensuring that the owners of these wells set aside sufficient funds for plugging and abandonment costs. View the support letter and signers below.

Supporters thanked Assembly Member Carrillo for her leadership on this important and growing issue, and noted how it is essential for health, safety, and the environment that oil wells are properly closed once they cease operations. Drilling and fracking for oil causes a multitude of harms to surrounding communities including air pollution, water contamination, health problems, and global warming pollution. Taxpayers are too often left on the hook to pay for costs that should be covered by owners of the polluting facilities.

AB 1167 helps ensure that California taxpayers are not stuck with the bill for cleaning up oil wells that get sold to less stable buyers by requiring these buyers to post a bond for the full cost of plugging and abandoning wells once they are no longer producing. The average cost for plugging and abandonment for an oil well is roughly $68,000, but required bonding amounts can be as low as a few hundred dollars per well.

AB 1167 will be heard in the Assembly Natural Resources Committee on Monday, March 27th at 2:30pm. Watch or provide public comment here.

Support Letter and Signers

Dear Assembly Member W. Carrillo:

On behalf of the undersigned organizations, we are writing to support your bill, AB 1167, the Orphan Well Prevention Act, which would help ensure that California taxpayers are not stuck with the bill for cleaning up oil wells that get sold off to less financially stable buyers. The bill would require that buyers of oil wells post a bond for the full cost of plugging and abandoning them after they are no longer producing.

Current law requires that anyone drilling a well post a bond to cover plugging and abandonment, but the bonding amounts fall far short of what’s necessary to pay for that process. The California Council on Science and Technology has estimated the average cost of plugging and abandonment per well at roughly $68,000, but required bonding amounts can be as low as a few hundred dollars per well.  This bonding shortfall becomes a heightened risk for the state when well owners transfer their aging wells to potentially less solvent owners. This risk already materialized into multimillion dollar liability for the state when the owner of the idle wells on Rincon Island went bankrupt in 2016, and the situation threatens to repeat itself as California’s oil production dwindles and owners increasingly seek to offload their marginal and idle wells, as Aera Energy (an Exxon/Mobil partnership) did last year.

In addition to the financial risks to the state, the current shortfall in bond funds leads to significant health and safety risks for people living near orphaned wells that have not been plugged or abandoned due to lack of resources. It is essential for health, safety and the environment that wells be properly closed once they have ceased operations. 

AB 1167 would squarely address this problem by requiring that any buyer of an oil well in California post a bond for the full cost of plugging and abandonment, ensuring that well owners cannot use sales to pass the buck for their cleanup costs to the state’s taxpayers. It’s the commonsense solution to a growing problem.

Thank you for your leadership on this important issue. We are pleased to support AB 1167. 

Sincerely,

Victoria Rome, NRDC

Laura Deehan, Environment California

Susan Penner, 1000 Grandmothers for Future Generations

Valerie Ventre-Hutton, 350 Bay Area Action

William Brieger, 350 Sacramento

Marilyn Bruno, Aequor, Inc.

Carly Rixham, American Solar Energy Society

Cheryl Auger, Ban SUP (Single Use Plastic)

Linda Seeley, Biodiversity First!

Marc Carrel, Breathe Southern California

Melissa Romero, California Environmental Voters

Scarlett Russell, California Nurses for Environmental Health and Justice

Michael J. Painter, Californians for Western Wilderness

Jenn Engstrom, CALPIRG

Ector Olivares, Catholic Charities of Stockton

Jason Pfeifle, Center for Biological Diversity

Linda Rudolph, Center for Climate Change and Health

Jose Torre-Bueno, Center for Community Energy

Grecia Orozco, Center on Race, Poverty, & the Environment

Nayamin Martinez, Central California Environmental Justice Network

Jesus Alonso, Clean Water Action

Suzanne Hume, CleanEarth4Kids.org

Janet Cox, Climate Action California

Eileen Mitro, Climate Action Mendocino

Ellie Cohen, The Climate Center

Haley Ehlers, Climate First: Replacing Oil and Gas (CFROG)

Kathy Schaeffer, Climate Reality Project, San Fernando Valley Chapter

Jessica Mitchell, Ecology Center

Alex Cornell du Houx, Elected Officials to Protect America Code Blue Water Security Solutions

Katelyn Roedner Sutter, Environmental Defense Fund

Bill Allayaud, Environmental Working Group

Iwalani Faulkner, Equity Transit

Catherine Dodd, Families Advocating for Chemical and Toxics Safety (FACTS)

Jessica Craven, Feminists in Action Los Angeles

Jane Vosburg, Fossil Free California

Michael Wellborn, Friends of Harbors, Beaches and Parks

Amy Moss, Greenpeace USA

Thomas Joseph Tsewenaldin, Indigenous Environmental Network

Indivisible Ventura

Marian Sedio, North County Climate Change Alliance

Ilonka Zlatar, Oil and Gas Action Network

Gopal Shanker, Rècolte Energy

Pauline Seales, Santa Cruz Climate Action Network

Sakereh Carter, Sierra Club CA

Jack Eidt, SoCal 350 Climate Action

Shoshana Wechsler, Sunflower Alliance

Maryam Dallawar, Sunrise Movement Orange County

Marilyn Price, Sustainable Mill Valley

Dennis Murphy, Sustainable Silicon Valley