San Ado Oil Fields | San Ardo, California. Photo courtesy of Drew Bird Photography

SACRAMENTO, CA (MPG) - Gov. Gavin Newsom Sept. 25, signed a bill into law that will significantly increase the minimum number of idle oil and gas wells companies must plug each year or pay increased fees.

Assembly Bill 1866, sponsored by the Center for Biological Diversity, strengthens California’s idle well plugging requirements by increasing the minimum number of idle wells that must be plugged under an operator’s management plan. For operators that choose to pay fees rather than plug wells, the fees increase substantially.

“This law finally puts real muscle into making polluters clean up their dangerous, costly mess,” said Hollin Kretzmann, an attorney at the Center for Biological Diversity’s Climate Law Institute. “This win for Californians is a commonsense measure that protects our health, environment and the climate by forcing the oil industry to plug its dormant wells quickly and on its own dime.”

Operators are legally obligated to plug the wells and restore the surface, but previous requirements had allowed operators to delay doing so. As a result, California has tens of thousands of idle wells that pollute the air and pose grave safety and financial risks.

Under prior rules, operators could opt to pay a nominal fee to avoid plugging any wells. Even if they choose to submit a plugging plan, operators only needed to plug 4% to 6% of their oldest idle wells to meet the requirements. Other states like North Dakota and West Virginia require operators to plug idle wells after one year.

The new law requires operators to plug 15% of their idle wells in the first year, increasing to 20% per year by 2030. Small and medium operators would have to meet lower requirements, but those also increase over a six-year period. Unlike previous rules, the law applies plugging minimums to all idle wells, not just older, “long-term” idle wells.

Operators may still opt to pay fees instead of plugging wells, but A.B. 1866 increases those substantially, with fees up to $22,500 per year for the oldest idle wells. Previously, annual fees were as low as $150 per idle well.

Oil production in California has declined more than 70% since 1985 and continues to decrease. As a result, the state is in a race against time to compel this dying industry to clean up its mess, experts say.

Plugging idle wells will not only reduce health and environmental threats, but also create thousands of oil industry jobs in communities transitioning away from fossil fuels. A map from the Make Polluters Pay coalition shows more than 24,000 jobs can be created through idle well remediation operations in California.

“Cleaning up idle wells generates jobs and protects our planet,” said Kretzmann. “California has shown yet again that we can stand up to Big Oil and deliver huge victories for people and the environment.”

According to a 2023 report from Sierra Club California, plugging all of California’s onshore oil and gas wells would cost about $23 billion. Yet the oil industry has set aside only $106 million in bonds, according to an analysis by Carbon Tracker.

Oil companies that have declared bankruptcy have walked away from their legal cleanup obligations and left taxpayers on the hook for millions of dollars. As the oil industry declines, many observers see a growing risk that companies will weaponize the bankruptcy process to escape cleanup responsibilities.

Idle wells pose a grave threat to public health, the environment and the climate. Dozens of idle wells in Kern County were discovered to be leaking methane in residential neighborhoods — some at concentrations high enough to be explosive.

By one estimate, about two-thirds of unplugged oil and gas wells in California are leaking methane — a climate super-pollutant over 80 times more climate-heating than carbon dioxide over the short term. Wells that leak methane likely also leak other dangerous air pollutants like benzene and other volatile organic compounds. Idle wells can also act as pathways for contaminants to move into groundwater, especially as wells get older.