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Open Access Publications from the University of California

The Fossil Fuel Phase-Out's Multi-Million Dollar Problem: An Environmental Justice Analysis Of Idle Oil Well Management in California


Throughout the state of California, oil operators will continue to abandon thousands of their oil wells within the coming years. With the growing threats of climate change, local, state and federal policymakers are looking away from fossil fuels and towards supporting renewable energy generation. In April 2021, California Governor Gavin Newson directed the California Air Resources Board (CARB) to begin evaluating paths to phasing out fossil fuel extraction in the state by 2045. The economic impact of the COVID-19 pandemic has also increased the risk of operators filing for bankruptcy and thus orphaning their wells. When an oil well stops operating, becoming idle, there are still many environmental and health related hazards remaining at the site. Uncapped idle wells are known to emit toxic and flammable gases, such as methane, a potent greenhouse gas. In addition, wells that are left unplugged can contaminate surrounding soil and water supplies.

In California, the process of plugging and decommissioning a well is the operator’s responsibility. However, operators have little incentive to plug and decommission their wells because maintaining their idle wells is generally cheaper. Properly plugging and decommissioning an onshore well can cost between $40,000 and $152,000. By maintaining their idle wells instead of decommissioning and plugging their wells, operators also preserve the option value of their wells in case oil prices increase. Additionally, if an oil company becomes insolvent or deserts its wells, making them orphaned wells, that cost of decommissioning and plugging the well is borne by the State. The State currently lacks sufficient funds to plug and abandon all orphaned wells. Due to that lack of funding, many orphan wells are left unplugged, harming the surrounding communities and contributing to climate change.

Last year, the California Geologic Energy Management Division (CalGEM) tightened its regulations around idle well management “to create far more stringent testing requirements that better protect public safety and the environment from the potential threats posed by idle wells.” This comment will analyze CalGEM’s updated regulations and current laws for idle well management. Specifically, the comment will use an environmental justice theoretical framework to assess whether the updated regulations meet CalGEM’s goal of “better protect[ing] public safety . . . from the potential threats posed by idle wells,” particularly for low-income communities and communities of color in California. The comment will go on to suggest potential areas where CalGEM can strengthen its regulations to better protect communities near idle wells, particularly by: (1) increasing idle well fees, (2) increasing the indemnity bond amount, (3) adding cumulative impacts to CCR section 1772.4 considerations, and (4) allowing for public comment on critical prioritization decisions. While there are certain strengths to the updated regulations and current laws regarding idle well management, they still fall short of appropriately protecting the health and safety of communities throughout California.

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