Full Title: There Will Be Blood: Decommissioning California’s Oilfields
Author(s): Dwayne Purvis
Publisher(s): Carbon Tracker
Publication Date: May 18, 2023
Full Text: Download Resource
Description (excerpt):
The inherent cyclicality of the commodity markets overlapped with the intrinsic depletion of the aged resource base and accelerated the decline of the onshore industry. Since 2014, onshore oil production in California has decreased by 42%, and production from gas wells has dropped even further. More importantly, for the first time in decades, new drilling slowed, and the number of actively producing wells also declined even before increasing political pressure.
Several sources of funds for decommissioning do exist, but the total falls far short of the money required. Oil and gas companies have provided $106 million in financial assurance for onshore wells, less than one percent of their overall closure and clean-up costs. An estimated $265 million in state and federal taxpayer money has been allocated to pay for costs inherited from defunct oil companies. Taxpayers are on the hook for much more than industry has set aside, and the remaining unfunded liability is dozens of times larger than these existing funds.