About a year ago, the California Department of Conservation embarked on the largest oil well plugging and abandonment project in state history, starting in Santa Barbara County.
The department’s Geologic Energy Management Division (CalGEM) set off to plug and abandon 171 orphaned wells in the Santa Maria Valley’s Cat Canyon with $34 million in state and federal funding.
As of March 29, 160 orphaned wells have been plugged to the surface, but more work needs to be done, California Department of Conservation Assistant Director for Communications Jacob Roper told the Sun in a statement.
“A total of 16 wells have had all well work completed, including plugging, surface cutoff, methane testing, and well histories documented,” Roper said, leaving 155 wells that still need testing and documentation.
Orphaned wells no longer produce oil and have no responsible, fiscally solvent operator to maintain, repair, or plug and abandon the wells and facilities, according to CalGEM. Idle wells also no longer produce oil, but they have an operator who oversees needed maintenance or repairs to prevent leaks or other physical hazards.
“Oil production’s decline for the past several decades has led to an increasing number of idle wells. While many operators are managing these idle wells in accordance with state regulations, many wells have become ‘orphans,’” according to CalGEM’s state abandonment draft expenditure plan.
The state division estimates that there are currently more than 5,300 orphan or “likely orphan” wells across the state. With limited funding to tackle “such a large inventory,” the state and federal governments allocated $125 million for CalGEM to address nearly 700 wells statewide, alongside the 171 in Santa Barbara County, as part of a multiphase project to plug and abandon orphaned wells throughout the state.
While environmental groups like the Sierra Club praised the investment to plug orphaned wells, they would like to see further policy change to better hold oil operators accountable rather than letting cleanup costs fall to taxpayers—a policy local representatives are now advocating for at the state level.
Heavy lift
The state-identified 171 orphaned wells in Cat Canyon were formerly owned by HVI Cat Canyon Inc. (Greka Oil Company). CalGEM considered them to be a potential danger to public health, safety, and natural resources. HVI spilled approximately 26,584 barrels of crude oil (about 1.1 million gallons) with more than 180 spills during its 15 to 20 years as an operator in the county, according to previous Sun reporting.
The company filed for bankruptcy in 2019, leaving the state with roughly 210 orphaned wells as a liability, according to CalGEM. The remaining 39 wells will be addressed separately as “they require more complex remedial work.”
Properly plugging orphaned wells prevents methane, hydrogen sulfide, benzene, and arsenic from leaking into the soil, air, or groundwater—which can cause health and environmental issues if they are not addressed, according to the California Department of Conservation.
Oil wells are plugged by placing cement and other approved materials into the former well. Operators remove the well’s piping and fill the space with alternating layers of mud and cement mixture, which is placed at the groundwater level and across layers of rock that contain oil and gas deposits.
“This protects the air, soil, and groundwater by preventing any oil and gas from moving up or down,” according to the Department of Conservation.
CalGEM is also required to decommission any production facilities by removing the infrastructure used for processing and oil extraction, and restoring the impacted, surrounding environment, according to CalGEM’s draft expenditure plan. State law considers plugging and abandonment, site decommissioning, and other remediation efforts as public works projects and requires CalGEM to enter into contract labor agreements.
“CalGEM’s action to plug and abandon orphan well(s) is a project under the California Environmental Quality Act (CEQA),” according to the expenditure plan. “As such, each time CalGEM contracts to undertake plugging and abandonment of wells and associated facilities, … CalGEM must conduct a CEQA review to determine if the project will have significant impact on the environment.”
Wells are then monitored for methane leaks and contamination issues, the report added. Each abandonment timeline depends on how long the contracting process takes and if there are any complications on-site, which can lead to further unexpected delays, said Jasmine Vazin, Sierra Club field organizing strategist.
“Just from what I’ve heard from folks at CalGEM, you’d be surprised at some of the complications that come up. It really is a case-by-case basis,” Vazin said. “Some of these wells have tree stumps, random machinery, and furniture down the well bore—it depends on the state the well is in when it comes to a plugging process.”
California Department of Conservation Assistant Director for Communications Roper told the Sun that the rest of the orphaned wells included in CalGEM’s abandonment project are in the contracting process in the various districts CalGEM operates.
“We’re eager to get this moving,” he said. “We’re just finalizing those contracts at this point.”
Playing catch-up
Addressing the orphaned wells is an important step, but Vazin said the Sierra Club worries about the remaining idle wells. CalGEM estimates there are more than 37,000 statewide.
“I think orphaned and inactive wells in general are a threat to communities. We know they constantly leak inorganic compounds and methane into the ground,” she said. “What CalGEM is doing is necessary, but I’m concerned about idle wells—these 37,000 idle wells that could become orphaned—becoming a socialized cost … that the taxpayers have to overcome.”
In Cat Canyon, the Sierra Club reported seeing abandonment price tags of $200,000 or more per well, she said. While cleanup is needed, “we don’t want to set the precedent that taxpayers have to pay for the messes oil operators are leaving behind.”
State Assemblymember Gregg Hart (D-Santa Barbara) has proposed two bills to address some of the issues: AB 1866 would require oil operators to develop a comprehensive plan to plug their idle wells, and it’s going through the legislative process. AB 631, which went into effect this year, gives CalGEM more authority to hold operators accountable when they violate the law.
Existing California state law requires operators to submit an idle well management plan and plug 4 to 6 percent of their oldest idle wells per year, according to a statement from Hart’s office. Operators also have the option to pay $150 in order to avoid submitting a plan.
“The state regulatory penalty system isn’t modern; it’s an artifact,” Hart told the Sun in a previous interview. “There are other regulatory agencies that have much more consequential penalties. The idea was to model those other structures and bring those up to date.”
Texas state law requires operators to plug and abandon inactive wells within a year after drilling or operations cease, according to the Texas Secretary of State’s Office. Vazin with the Sierra Club added that Colorado, West Virginia, Pennsylvania, and North Dakota have similar state requirements for oil operators.
AB 1866 would require operators to address idle wells in about 10 years and takes away the option to pay idle well management fees, mandating an “aggressive” percentage of plugging per year, Vazin said
“I think bringing California to the same level of other states when it comes to regulation, idle wells being plugged after becoming idle, and taking away the option to pay management fees is important,” Vazin said. “California doesn’t have anything on the books mandating the cleanup of oil wells. We are definitely falling behind when it comes to cleanup regulation.”
Reach Staff Writer Taylor O’Connor at [email protected].
