SACRAMENTO, CA — In response to Californians’ growing demand for climate action, state lawmakers have recently passed some of the most robust laws in the country aimed at addressing the ongoing health, climate and financial threats inflicted by the fossil fuel industry. But in a matter of weeks the state oil regulator, California Geological Energy Management (CalGEM), has failed to enforce two critical new laws: the Orphan Well Prevention Act and the law prohibiting new oil drilling in neighborhoods.
The Orphan Well Prevention Act went into effect last December to reduce the growing number of orphaned, leaking oil wells in California. Idle and orphaned wells are overwhelmingly located in rural and predominantly Latine counties where they can spew toxic pollution into the air and water, putting the climate and public health at risk. The new law ensures that drillers acquiring oil wells from other operators first submit a bond to CalGEM covering the full cost of plugging and remediating the transferred wells so taxpayers aren’t saddled with cleanup costs.
But last month, CalGEM flat out refused to apply these bonding requirements when California Resources Corporation’s (CRC) acquired Aera Energy LLC (Aera) to become the largest oil operator in the state. In a letter to the bill’s author, Assemblymember Wendy Carillo, CalGEM stated they would not enforce the law. CalGEM believes it does not apply to this transaction because Aera is still the “operator” of its own wells. In response to this blatant violation of the law, nearly 80 climate justice organizations with the Last Chance Alliance sent a letter to CalGEM Supervisor Doug Ito demanding that the agency declare CRC’s acquisition of Aera wells as conditional until full legal compliance is achieved. CRC has a long history of spills and violations and has already filed for bankruptcy once. As a known offender in the state, their ability to safely manage thousands of new and increasingly low-producing wells under the merger is highly questionable.
“Instead of enforcing the law, CalGEM is risking putting California taxpayers on the hook for Big Oil’s $2.4 billion dollar mess,” said Jasmine Vazin, Campaign Organizing Strategist with Sierra Club. “CRC’s acquisition of Aera Energy absolutely falls under the purview of the Orphan Well Prevention Act. CalGEM is ignoring the plain terms of this deal: CRC is acquiring operational control of Aera Energy’s oil wells. The state must hold these companies accountable to state law and ensure that CRC is fronting clean up costs for these acquired oil wells to protect our tax dollars.”
“Big Oil will always find a way to twist words to their advantage. It is irresponsible of CalGEM to relinquish their regulator role at the first test of this law that was so clearly intended for this very situation. Regardless of terminology or technicalities, the Orphan Well Prevention Act was meant to protect Californians the burden of well cleanup when responsibility changes hands. CalGEM must do their job and uphold the law, and ensure the polluters pay to clean up their mess,” said Ilonka Zlatar, Climate Justice Organizer with Oil and Gas Action Network. “We are seeing the continuing pattern of allowing industry to get their way at this agency, despite the change in their name, charter and director”.
Building on this alarming trend, last month CalGEM also issued 30 permits for new oil and gas drilling inside health and safety buffer zones, just as the law forbidding any such drilling went into effect (following the withdrawal of the oil industry’s deceptive referendum to overturn it). Environmental advocates immediately called out the regulator for their lack of authority to issue permits within 3,200 feet of communities with the newly restored law in place. They demanded CalGEM void and rescind all 30 permits. As reported in Politico, CalGEM has so far only rescinded 13 and is refusing to rescind the remaining 17 permits. These approvals were rushed through just as the law went into effect in a defiant move that, at the very least, flies in the face of the spirit of the law.
“It’s frustrating that instead of enjoying the benefits of setback protections right away, frontline communities are fighting new drilling from the get-go,” said Hollin Kretzmann, an attorney at the Center for Biological Diversity’s Climate Law Institute. “Californians deserve an oil and gas regulator that upholds landmark public protections and accountability. If CalGEM won’t fully implement the law, the governor needs to make them.”
“Big Oil already tried and failed to circumvent the law with their deeply unpopular referendum to rollback health and safety buffers between wells and communities,” said Nicole Ghio, Senior Fossil Fuels Program Manager at Friends of the Earth. “It’s time for CalGEM to start doing its job and enforce the law. And if CalGEM won’t, it’s time for Newsom to rein in this rogue agency.”
CalGEM has a long and troubled legacy marred by regulatory failures, lax enforcement, dubious financial interests, and a revolving door of leadership that has left impacted communities and climate advocates leery of CalGEM’s willingness to follow the law. In 2019, Gov. Newsom fired agency supervisor Ken Harris a day after the media reported that the issuance of new fracking permits had doubled since Newsom took office. One month later, it was reported that agency employees were allowing oil and gas companies to avoid upfront reviews and keep operations moving by using so-called “dummy” folders to approve risky new injection wells without necessary documentation.
A 2021 investigation by the Desert Sun and ProPublica found that CalGEM enforcement of its existing regulations was often startingly ineffective. Between 2018 and 2020, CalGEM issued 66 enforcement orders to operators and only 11 achieved compliance. According to documents investigators obtained through public records requests, outstanding enforcement orders left leaking wells, tanks, and other problems unaddressed throughout California, threatening public health and wildlife.
In response to the slew of scandals, Newsom signed a law to rename the agency and rewrite their mission to elevate the focus on health, safety, and the environment that went into effect in 2020. Yet the state oil regulator continued to generate controversies.
In 2022, over 40 oil wells were found gushing methane as close as 100 yards from homes in North Bakersfield. Agency whistleblowers told the press that the state’s top oil regulator was lying about the severity of the threats posed by the leaking wells. The anonymous staffer also admitted to the media that the agency had placed a quota on the amount of wells staff must inspect through “remote witnessing,” a process that allows regulators to avoid in-person inspections of aging oil wells and instead rely on oil operators and third parties to send critical safety information from oil sites.
Advocates and communities organizing to protect their health and safety from oil drilling sites are now hoping that Gov. Newsom will once again take decisive action to rein in this rogue agency, which threatens his climate legacy. Despite the previous reform efforts, the ongoing issues and consistent failures at CalGEM highlight the need for stronger oversight from the governor. Environmental and community advocates are calling on Newsom to implement stricter measures and ensure that CalGEM enforces the law to prioritize the wellbeing of Californians and uphold the integrity of the state’s climate goals.
“Amid widespread speculation that Governor Newsom is turning his attention beyond California, his agency CalGEM is blatantly refusing to enforce our vital climate laws. No one should have to live near and experience the health issues caused by fossil fuel pollution and with our climate rapidly changing, we do not have time to keep extracting. Governor Newsom must do right by the Californians who have put him in office and immediately direct CalGEM to not continue to bow to Big Oil and rescind all permits,” said Chirag Bhakta, California Director at Food & Water Watch.
“It’s simple: climate leaders don’t approve new drilling. CALGEM’s reckless approval of new oil and gas drilling permits, especially within the health-and-safety setback zone, shows a blatant disregard for public health and the environment and is a horrendous stain on Governor Newsom’s global reputation on climate. To take on Big Oil, Newsom must ensure the agency revokes all recent permits, enforces the Orphan Well Prevention Act, and halts all future drilling permits in California,” said Allie Rosenbluth, Oil Change International US Program Manager.
Despite the passage of these groundbreaking laws, CalGEM’s failure to enforce the Orphan Well Prevention Act and the neighborhood drilling ban underscores the urgent need for greater accountability within the agency. California needs protections from dangerous orphan wells and communities are legally entitled to an end to neighborhood drilling. These two laws serve as a crucial test of CalGEM and Gov. Newsom’s commitment to enforce regulations that protect public health, the environment, and our economy.
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