In the hours following the release of Sierra Club’s new report exposing Big Oil’s role in creating and sustaining a crisis of idle oil wells in California, the oil industry responded with statements that were questionable, misleading, and flat-out wrong.
Let’s set the record straight and separate fact from the oil industry’s fiction.
Chevron says: “We have completed that process on more than 2200 wells so far this year and on 6800 wells in California in the last five years.”
FACT CHECK: If you look on page 19 of our report, Table 3 shows the total number of wells Chevron plugged in 2022 was 154, while the total between 2018-2022 was 1,214. Claiming to have plugged 2200 wells this year is out of step with the pace that Chevron has plugged idle wells in the past, and their total of 6800 wells plugged in the last five years is grossly overstated.
This table is according to CalGEM reports and data collected in anticipation of the yet-to-be-released 2022 report obtained via a Public Records Act request.
Western States Petroleum Association (WSPA) says: “From overstating the number of idle wells in the state, to greatly exaggerating the financial liabilities to the state, to failing to even mention California’s toughest-in-the-nation idle well regulations, this report is meant to provide policy makers an erroneous and exaggerated picture of idle well policy in the state."
FACT CHECK: The methodology used in this report to tally the number of idle and orphan wells in California was rigorous. We use CalGEM’s own database as well as records requests to determine the number of idle and orphan wells in California as accessed in April and May 2023. You can read the full methodology starting on page 24 of the report.
This report does a deep dive on California’s regulatory regime regarding idle wells, and finds it inadequate at addressing the problem primarily because the laws do not mandate a deadline for plugging idle wells but creates a framework for delaying plugging these wells. You can read more about this analysis in the report’s “Part 3: How the Oil Industry Takes Advantage of Lax Regulations That Put the Public at Risk” on page 17-20.
Over a third of California’s idle wells have remained idle for more than 8 years. When comparing California’s laws to other states like Pennsylvania, West Virginia, Colorado and North Dakota that require companies to plug wells that become idle within a year or less, California’s laws are clearly not the toughest on polluters.
ExtractingFact.com (run by Californians for Energy Independence, a front group for WSPA) says: “THE REPORT IGNORES BASIC FACTS ABOUT IDLE WELL ACCOUNTING TO FALSELY CLAIM THAT THE STATE’S PROGRAMS ARE FAILING.”
FACT CHECK: We are saying that the state’s programs on idle wells are failing and give operators cover to delay plugging idle wells. Operators do this by paying small fees to keep wells idle with no timeline for plugging or by enrolling in Idle Well Management Plan (IWMP), a program where operators are only required to plug from 4% to 6% of their wells per year (depending on the number of wells held, with more wells held necessitating the higher percentage) over a period of up to five years. Even under Idle Well Management Plans, operators leave the vast majority of their idled wells unplugged indefinitely. These programs are not adequate and need to be replaced with better policies. When comparing California’s laws to other states like Pennsylvania, West Virginia, Colorado and North Dakota that require companies to plug wells that become idle within a year or less, California’s laws are failing to hold polluters accountable.
A policy solution proposed by Sierra Club is for operators to plug their idle wells by 10% over ten years to cover all idled wells.
ExtractingFact.com says: “THE REPORT IGNORES LONGSTANDING CALIFORNIA LAW TO FALSELY CLAIM THAT TAXPAYERS WILL BE FINANCIALLY LIABLE FOR IDLE WELL MANAGEMENT. The report makes an unsupported assertion that California’s large oil and gas producers will avoid plugging and decommissioning obligations by “down selling” wells to smaller, poorly capitalized producers that don’t have the financial resources to plug them.”
FACT CHECK: Additional reports by CarbonTracker and FracTracker have already exposed the problem with this trend in California, leading to Governor Newsom adopting AB 1167. AB 1167 will require companies upon transfer of ownership to take out full bonding on the cost to clean up marginal producing wells because the state agrees there’s a great risk of companies offloading clean up costs and risks to companies that are poorly capitalized. You can read the state’s full analysis here that counters the statement from ExtractingFact. We’ve already seen clear examples of this with Occidental Petroleum downselling to California Resources Corporation who filed for bankruptcy shortly after taking control of those wells.
We are also well aware of the law that says CalGEM can pursue operators to plug wells back to 1996. We cite this law in our report and use it to say Occidental can be held liable for CRC and Exxon and Shell for Aera if current owners of these wells can’t pay to clean them up.
ExtractingFact.com says: “THE REPORT MISREPRESENTS STUDY FINDINGS TO FALSELY CLAIM THAT IDLE WELLS CAUSE ENVIRONMENTAL DAMAGE.”
FACT CHECK: Idle wells absolutely increase the risk for environmental damage. “If not properly plugged and abandoned, these wells and facilities can contaminate waterways and soil, serve as a source of climate and air pollutants, and can present physical hazards to people and wildlife,” according to CalGEM's Idle Well Program Legislative Report published August 2023.
ExtractingFact.com says: “THE REPORT IGNORES HOW CALIFORNIA INSTITUTED COMPREHENSIVE IDLE WELL TESTING REGULATIONS IN 2019.”
FACT CHECK: The Sierra Club actively engages with CalGEM’s idle well testing via the Methane Task Force. Regardless of these new regulations, the fact remains that 67% of idle wells are leaking methane, and CalGEM and operators don’t have the necessary resources to monitor the entire inventory of idle and orphan wells for leaks. We’ve seen the impacts of this in the Morningstar and wider Bakersfield community when 49 wells were found leaking in 2022, and this past summer where 27 wells were leaking outside of a school and community in Arvin-Lamont leaking for unknown amounts of time before leaks were discovered, despite these updated regulations. Last year FracTracker Alliance also did a FLIR survey of oil and gas infrastructure and found 29 leaking idle wells in a survey of 400 sites. The state’s own Methane Task Force has found leaks at idle wells sites with the monitoring surveys they’ve done in Kern County (Arvin and Shafter) over the last year, and we know that all idle wells are not being monitored constantly, meaning that regardless of regulation, leaks are occurring and going undetected.
ExtractingFact.com says: “The report points to California’s large number of low-producing wells as proof that the state’s oil and gas industry is in its “decommissioning phase.” This is inaccurate.”
FACT CHECK: California oil production plummeted by 42% since 2014 and with California wells only producing an average of 3.9 barrels per day of oil. Per recent state law, AB 1167, a marginal producing well — a well nearing the end of its economically useful life — was defined as less than 15 barrels per day. Even CalGEM acknowledges this in their Idle Well Program Legislative Report.
THE BOTTOM LINE IS:
Chevron, Aera Energy, California Resources Corporation own nearly 70% of the inactive oil wells in California and can plug and remediate their wells with a small fraction of their 2022 profits, but California’s laws are so weak that they aren't required to, leaving Californians vulnerable to shoulder the costs in health, environmental damage or with tax dollars.
Plugging and remediating California’s idle and orphan wells will create job opportunities and resolve environmental justice issues that can benefit working class communities of color. California needs to overcome oil industry lobbying and catch up to other states by passing new laws or statutes that require oil companies to plug and remediate wells on an expedited timeline.