Existing law establishes the Geologic Energy Management Division in the Department of Conservation, under the direction of the State Oil and Gas Supervisor, who is required to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field, so as to prevent damage to life, health, property, and natural resources. Under existing law, the current operator, or the previous operator, as provided, as determined by the records of the supervisor, of a deserted well that produced oil, gas, or other hydrocarbons or was used for injection is responsible for the proper plugging and abandonment of the well or the decommissioning of deserted production facilities. If the supervisor determines that the current operator does not have the financial
resources to fully cover the cost of plugging and abandoning the well or the decommissioning of deserted production facilities, existing law requires the immediately preceding operator to be responsible for the cost of plugging and abandoning the well or the decommissioning of deserted production facilities.
This bill would authorize the supervisor to impose a claim and lien upon the real property in the state owned by any operator or responsible party under specified conditions and in specified amounts. The bill would require the supervisor, on or before July 1, 2022, to establish a collections unit within the division to be responsible for: (1) collection of unpaid idle well fees from an operator, (2) establishing the timelines and criteria for determining if a well has been deserted, and (3) locating or collecting any costs from the operator or responsible party for a well that has been deserted or ordered to undergo well integrity testing or to be plugged and
abandoned by the supervisor.
Existing law requires the supervisor, on or before July 1, 2019, and annually thereafter until July 1, 2026, to prepare and transmit to the Legislature a comprehensive report on the status of idle and long-term idle wells for the preceding calendar year that includes specified information. For the report due on or before July 1, 2021, and for each report thereafter, existing law requires the division to conduct inspections of production facilities attendant to long-term idle wells and requires that information summarizing violations and pertinent findings in these inspections be included in each report.
For the report due on or before July 1, 2023, and each report thereafter, this bill would require the division to provide a description of activities undertaken by the division’s collections unit.