As climate change hits California, will Gov. Newsom clean up oil industry’s mess?

In California this summer, no air conditioning unit, no HEPA filter, no N95 mask worn against the smoke can obscure the growing danger of our state’s toxic relationship with the oil industry.

Climate change is making us cough, sweat and flee our homes, and petroleum pollution is fueling the flames.

But it was easier to miss another big warning sign of how perilous this industry is becoming — the recent bankruptcy filing by California Resources Corporation, the state’s largest oil and gas producer.

Saddled with debts by its parent company Occidental, and hit by a worldwide price slump, CRC is the latest oil producer to seek bankruptcy, aiming to wipe out more than $5 billion in debt and equity interests.

Like other oil companies facing bankruptcy, CRC is looking after its executives. A Texas judge recently approved payments of up to $57 million for nine CRC executives. Meanwhile, the company has laid off hundreds of workers and owes tens of millions in taxes to cash-strapped California counties.

Gov. Gavin Newsom must confront another disturbing fact: This bankrupt company also faces more than $1 billion in costs to properly plug and abandon its 18,700 wells in the state. That problem goes far beyond CRC. A state-commissioned report found that cleaning up California’s 107,000 oil and gas wells could cost a staggering $9.2 billion.

Saddling taxpayers with cleanup costs after pocketing the profits would be outrageous, yet many oil producers have done just that, walking away from millions of wells across the U.S. With more bankruptcies coming, the risk that oil companies weasel out of well cleanup keeps increasing.

Gov. Newsom should step in to ensure oil companies set aside enough resources for cleanup in these bankruptcy proceedings.

The risks aren’t just financial. When wells sit idle, they corrode and leak. Experts point to nearly 75,000 wells in California that are “idle” or near-idle, producing little to no oil, or “orphaned,” having no viable or responsible operator. We don’t know the most recent numbers because the Newsom administration failed to release this year’s idle well report, due by law on July 1.

We do know that the methane frequently leaked by idle wells is a greenhouse gas that warms the planet 87 times more than the same amount of carbon dioxide over a 20-year period. Potentially tens of thousands of idle wells are leaking methane into the air, worsening climate change and increasing the risk and magnitude of heat waves and fires like those we’re suffering now.

Yet the Newsom administration keeps rewarding this polluting industry, including CRC. This year, state oil regulators have issued more than 1,600 permits for new wells. More than 300 went to CRC. This will only increase cleanup costs once wells stop producing or their owners go bust. Even if the state stopped issuing permits today, plugging and cleaning up existing wells at the current snail’s pace will take decades.

California can’t just keep approving drilling, waiting for this tottering industry to collapse. We need a plan for a managed, just transition. One solution gives Gov. Newsom a chance to tackle multiple problems at once: accelerating well remediation. By using the state’s authority to speed well cleanup we can reduce the environmental and fiscal risk from these wells and create good jobs.

The pandemic and wildfires are undeniably massive challenges to the administration, but they can’t be used as excuses for Newsom’s continued inaction on the oil industry pollution menacing our climate and health. Our governor must stop propping up a dying industry that’s bringing the state and the entire planet down with it. Newsom needs to stop drilling and start the transition away from fossil fuel.

This story was originally published September 12, 2020 at 5:00 AM with the headline "As climate change hits California, will Gov. Newsom clean up oil industry’s mess?."