AB 1866 by Assemblyman Greg Hart barely survived its hearing in the Senate Natural Resources Committee, passing with the minimum votes needed, 6-4. Normally a safe place for bills backed by environmental activist groups, the author was admonished by nearly the entire committee, including those that ultimately supported it.
The bill needlessly upends a successful state program regarding idle wells. Producers have eliminated a record 11,000 idles wells over the last two years thanks to the state’s Idle Well Management Program established under AB 2729 in 2016 by Das Williams. That bill also established a fee program that has resulted in record balances being deposited by operators into the state’s Hazardous and Idle-Deserted Well Abatement Fund, which has a balance of $25,550,585 as of February 22, 2024. All told, the state currently has nearly $300,000,000 in funds to plug orphan wells.
Specifically, AB 1866 would greatly increase the percentage of idle wells operators must eliminate every year. The unrealistic levels could backfire, causing perfectly viable operators who are actively plugging idle wells at a record pace to suddenly become nonviable and noncompliant, creating additional orphan wells.
In addition to eliminating a record number of wells over the past 2 years, CIPA members are working daily with CalGEM on implementing AB 1057, which adds a comprehensive layer of assurance to cover asset retirement. This bill complicates that program even as it is getting off the ground.
CIPA lobbyist Sean Wallentine told the committee, “The best way to prevent oil wells from becoming the state’s responsibility is to ensure existing oil producers are able and allowed to continue producing and plugging their own idle well stock over time.”
Nearly all committee members admonished Assemblyman Hart to work with industry to amend the bill to enhance the program, not destroy it and the progress that has been made by industry working with CalGEM cooperatively.
For more information, contact Rock Zierman.