CalGEM Continues 2023 Oil Permit Approvals in Vulnerable Communities, Works Against Legislation Raising Billions in Oil Bonding to Plug Unproductive Wells; Newsom Must Ignore Regulator and Sign AB 1167, Advocacy Groups Say

LOS ANGELES, Oct. 5, 2023 /PRNewswire/ -- The state's oil and gas regulator CalGEM has gone rogue, approving hundreds of oil permits this year in vulnerable communities breathing poisonous emissions from both active and idle wells. At the same time, the regulator has worked to undermine AB 1167 in the legislature and with the governor. AB 1167 (Carrillo) is a critical bill to raise billions in bonding from oil companies seeking to sell unproductive wells to ensure plugging costs are covered, Consumer Watchdog and FracTracker Alliance said today.

"Governor Newsom must both stop CalGEM's reckless regulators from issuing permits for drilling in the midst of vulnerable communities and ignore CalGem's efforts to undermine AB 1167," said Consumer Advocate Liza Tucker. "He must sign this legislation immediately to ensure that the state has enough oil industry bonding to plug idle and orphaned oil wells that poison communities with their emissions—especially because CalGEM is approving so many rework permits in communities."

"Big oil is able to shed debt by transferring ownership of low producing wells to small shell companies, instead of paying to plug the wells themselves," said Kyle Ferrar, Western Program Director for FracTracker Alliance. "Rework permits allow these shell companies to continue producing small amounts of oil, until the companies go bankrupt, leaving the plugging and remediation costs to California taxpayers. Big oil has been reaping profits from California oil for decades–with vulnerable communities paying the highest price with their health–and must be required to assure the state that their mess will be cleaned up."

More than 100 groups are urging Newsom to sign AB 1167. For their letter, see here. Decommissioning California's oil and gas infrastructure could exceed all future net cash flows from production by up to $21 billion dollars, according to financial think tank Carbon Tracker, making it critical for Newsom to sign the bill to protect taxpayers.

The total number of new oil and gas permits issued since Newsom took office in 2019 swelled to 15,722, according to CalGEM data crunched by FracTracker Alliance. During the first nine months of 2023, CalGEM approved at least 820 permits to rework/redrill existing wells in vulnerable communities living within 3,200 feet of oil drilling operations, according to a new FracTracker report.

Overall, permitting slowed in the third quarter of 2023 over the year before, falling 65%. (See Table 1 below). For a complete permit update, see: https://newsomwellwatch.com

Specifically, permits to drill new wells dropped by 85% this quarter and 95% for the year—a direct result of Governor Newsom prioritizing frontline communities and protection of the climate over oil industry profits. Nevertheless, California regulator CalGEM continues to approve new drilling and rework permits within 3,200 feet of homes, healthcare facilities, and schools.

"Frontline communities continue to face a double threat as the counts of idle and aging wells go up and they continue to be orphaned, leaking emissions because oil companies have not been forced or even incentivized to plug them," said FracTracker's Ferrar. "In fact, approvals for plugging wells fell by 25% over the same quarter last year—oil companies don't want to spend the money to plug poorly producing wells and would rather transfer them to small or insolvent companies."

Table 1. Counts of New Permits. The table presents the counts of CalGEM permits issued during the third quarter of 2023, and compares them to the third quarter of 2022.

"I want to be clear that this isn't a numbers game for us," stressed Kobi Naseck, Coalition Director for VISIÓN (Voices in Solidarity Against Oil in Neighborhoods). "The reality is that even a single permit to continue or begin new drilling within the named health and safety buffer zone is an unacceptable attack on our families and our communities. We should all be concerned to see these patterns continue at CalGEM in the year 2023. What we need most right now is an end to drilling and a Governor who will follow the Legislature's leadership and hold Big Oil accountable by signing AB 1167."

SOURCE Consumer Watchdog