Environmental report urges companies to accelerate plugging of idle oil wells
The Sierra Club ratcheted up pressure on Kern County’s petroleum industry Tuesday by releasing a contentious report saying California policymakers should force oil companies to spend more money plugging idle oil wells.
The report singled out three locally operating producers — Aera Energy LLC, California Resources Corp. and Chevron — it said earn adequate income but have not spent enough money properly retiring unused wells with the potential to cause pollution.
The companies countered that they have made substantial progress in recent years addressing idle wells, as required by state regulators. Industry trade groups, meanwhile, criticized the Sierra Club’s report as misleading.
Idle wells as an environmental issue gained greater attention last year after dozens of oil field facilities around Kern were found leaking methane at high rates in Bakersfield and Oildale. More were discovered leaking earlier this year in the Arvin and Lamont areas.
Earlier this year the state Legislature addressed the related issue of orphan wells, defined as idle facilities for which no responsible owner can be found. To make sure taxpayers don’t have to pay for future well plugging and remediation jobs, lawmakers passed a law increasing the amount of money companies have to post in the form of a bond when wells change hands.
But the Sierra Club, using Aera, CRC and Chevron as examples, said more should be done to protect taxpayers and residents alike.
Its report said the three companies own almost three-quarters of all idle wells in Kern, with combined cleanup costs it estimated at almost $3.7 billion, amounting to a single-digit percentage of their total income — or, in
the case of Aera and CRC, their former owners’ income. The Sierra Club said California’s total idle well liability comes to $21 billion, which the industry disputed.
The Oakland-based nonprofit called on policymakers to force oil producers to plug and abandon all wells that remain idle for more than a year. It said the companies should also have to plug 10% of their idle wells every year — existing regulations require 4% to 6% annually — and pay higher fees to cover remediation costs as well as more money in bonds.
An environmental lawyer who the Sierra Club invited to speak to the issue, staff attorney Hollin Kretzmann with the Arizona-based Center for Biological Diversity, said government should act now as the industry’s production total declines and companies prepare to leave the state.
“They had decades of profitability, and for all that time, what they should have been doing is setting aside enough money. And they haven’t done it,” Kretzmann said. He added, “This problem is only going to get worse the more we wait.”
Aera noted in an email that it has plugged and abandoned 5,334 wells since 2019 while following with the country’s most rigorous facility testing standards. This year, it said, it’s on track to plug close to 950 wells as it stays in compliance with its state-mandated idle well management plan.
“We have a dedicated team within Aera with years of experience that prioritizes work with public health, safety and environment at the forefront of their decisions as they continue to keep us in compliance,” the company stated.
CRC said it plugs wells at a pace that exceeds state requirements while also maintaining some wells for reuse. The company stated it is investing in new technologies with the potential to put idle wells to productive reuse generating renewable energy such as geothermal power.
Chevron denied the assertion it will leave taxpayers with the responsibility to plug its wells in the future. It said it has programs to inventory, prioritize and safely retire idle wells in compliance with state regulations, and that it has plugged 6,800 wells statewide in the last five years, including 2,200 so far this year.
“We work hard to proactively manage operational issues like emissions, loss of integrity and containment with our inactive wells,” Chevron said in a statement. “During that process, California law requires extensive testing to ensure idle wells are being properly managed.”
Oil trade groups accused the Sierra Club of exaggerating the state’s inventory of idle wells, overstating the state’s financial liabilities if oil companies were to walk away, and leaving out important details like California’s facilities-testing requirements.
“The report is attempting to create a perceived crisis that does not exist,” read a statement by the Western States Petroleum Association.
The two sides disagreed Tuesday on whether the number of idle wells in the state is increasing, whether the facilities actually cause pollution and whether taxpayers might eventually have to pay for plugging and abandonment work.
While the industry-backed website ExtractingFact.com alleged Tuesday’s report misrepresented various data and findings from previous studies, the Sierra Club stood by its study, and added that doing more well plugging and abandonment work would bring the added benefit of creating jobs.
“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,” the nonprofit said by email.