Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member Latest Breaking News Editorials & Other Articles General Discussion The DU Lounge All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

quaint

(3,550 posts)
Thu Oct 27, 2022, 08:39 AM Oct 2022

Big Oil Companies Are Selling Their Wells. Some Worry Taxpayers Will Pay to Clean Them Up.

ProPublica
The price of oil produced in California this year reached its highest level in a decade. President Joe Biden is releasing millions of barrels of oil from the Strategic Petroleum Reserve to keep prices in check. And fossil fuel companies’ earnings are so high that Gov. Gavin Newsom has called for a windfall tax on their profits.

California Assemblymember Steve Bennett, a Democrat who has long worked on oil policy, has seen oil companies in his Ventura district walk away from environmental liability. “It gets passed on to a smaller company and to a smaller company until someone declares bankruptcy and the public is stuck with the cleanup bill,” he said.

Supermajors Shell and ExxonMobil recently agreed to sell more than 23,000 wells in California, which they owned through a joint venture called Aera Energy, to German asset management group IKAV for an estimated $4 billion. Aera accounts for about a quarter of California’s oil and gas production, largely from pumping in Kern and Ventura counties.

California has the authority to ask for an additional $30 million in financial security from a single operator but only requires Aera to hold a $3 million bond. As a result, Aera’s bonds cover less than half a percent of the $1.1 billion that ProPublica estimates it would cost the state to plug the wells based on the average cost to California for past well plugging. (That estimate does not include the additional cost of full surface remediation.)

2 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Big Oil Companies Are Selling Their Wells. Some Worry Taxpayers Will Pay to Clean Them Up. (Original Post) quaint Oct 2022 OP
No reason to worry. It's a fact. Taxpayers will pay to Phoenix61 Oct 2022 #1
No words, just rage. quaint Oct 2022 #2

Phoenix61

(17,649 posts)
1. No reason to worry. It's a fact. Taxpayers will pay to
Thu Oct 27, 2022, 08:53 AM
Oct 2022

clean them up. Big companies sell to smaller companies as the well becomes less profitable. The smaller companies suck what they can out of the well then abandon them sticking the taxpayer with the cost.
“The Bureau of Ocean Energy Management (BOEM) manages more than 2,000 active oil and gas leases with over 55,000 wells across 10.9 million acres of the Outer Continental Shelf (OCS). Approximately 58 percent of these wells—more than 32,000—are permanently or temporarily abandoned.”

https://www.americanprogress.org/article/fixing-abandoned-offshore-oil-wells-can-create-jobs-and-protect-the-ocean/

https://www.nola.com/news/environment/article_6bdba0f0-db59-11eb-bf95-7fa1a01c1287.amp.htmlLike

Latest Discussions»Region Forums»California»Big Oil Companies Are Sel...