Signing AB 1167 will cement Gavin Newsom’s climate leadership status

OPINION – California is attacking climate change in the courts and in the legislature. And Gov. Gavin Newsom has the opportunity to make an impact on both fronts.

When Gov. Newsom announced last week that California was suing five major oil companies and an industry trade group for alleged climate damages, he sent an unmistakable message to businesses that pollute our environment: You can no longer wreck our climate or damage public health for profit with impunity, and you will have to pay for the damage you cause.

This lawsuit, which alleges decades of lies and deception by these oil giants, will hold them accountable and demand that they pay their fair share of the climate change-stoked damage they allegedly contributed to. Other states, cities and counties have filed similar suits in recent years, but none has the clout of California, the world’s fifth-biggest economy on its own. Given California’s history of undertaking landmark environmental action, and then other states emulating the Golden State, this lawsuit could provide a template for others.

California’s Legislature is offering a different model for other states’ efforts to combat climate change. State lawmakers took a big step in the final week of the legislative session toward protecting California’s climate and communities, by passing the Orphan Well Prevention Act (AB 1167). Now, we urge Gov. Newsom to keep up the momentum on making polluters pay, by signing that bill.

Based on data from a recent study, it’s clear that a majority of California’s more-than-43,000 idle and orphaned wells are leaking methane, a greenhouse gas that traps 84 times the amount of heat in the atmosphere over a 20 year period than carbon dioxide. These wells are also prone to leaking other volatile organic compounds such as sulfur dioxide as well as known carcinogens such as benzene.

AB 1167 addresses a key loophole that frequently allows companies that own idle oil wells to avoid paying the full price of cleaning up their leaks. When an oil producer purchases a high-risk oil well, it is required to also purchase a bond — a kind of insurance policy intended to cover the cost of plugging the well if and when it begins leaking. Under current California law, most bonds purchased by oil companies only cover $1,000. However, it costs approximately $68,000 to plug and abandon a leaking oil well, so unpaid costs can quickly add up. With more than 43,000 idle and orphaned wells across the state, that puts taxpayers on the hook for hundreds of thousands of dollars that rightfully should be paid by the companies responsible for the oil wells.

AB 1167 also addresses a tactic employed by some big oil companies: They sometimes pass off old wells to smaller companies. If, as in the case of Greka Energy’s Rincon Island Limited Partnership (RILP), one of those smaller oil operators declares bankruptcy, it’s entirely possible for both the old owner and the new one to avoid responsibility for cleanup costs. When an entity such as RILP can’t afford to clean the wells up, Californians are left to pick up much of the tab. AB 1167 would increase the bonding amount to cover all costs for plugging leaking wells when a transfer of ownership takes place, putting the burden of payment on those responsible for the pollution — not Californian taxpayers.

Gov. Newsom said Sunday that the state government needs “… to exercise not just our formal authority, but we need to share our moral authority more abundantly.” By demanding the fossil fuel industry contribute to an abatement fund for the climate crisis it helped perpetuate, Gov. Newsom is setting up Californians for long-term protections from future damages caused by climate-related disasters. And as California joins other states and cities in working through  the courts to make polluters pay, the best and most complementary measure Gov. Newsom can take in the short-term is to sign the Orphan Well Prevention Act to establish protections for both our climate and for Californians living near idle wells. Oil companies need to pay to clean up their messes and Gov. Newsom’s signature is what’s needed at this moment to make sure that they do.

Laura Deehan is State Director for Environment California