California Governor Newsom signed a series of bills this Wednesday (25th) restricting oil and gas operations statewide, sparking criticism from a member of the fossil fuel industry who argues that these measures will lead to higher living costs for Californians.
Newsom’s office stated that these three bills were aimed at protecting public health and wildlife.
One of the bills, AB3233, grants cities and counties greater authority to impose restrictions on oil and gas operations, including limiting or prohibiting new oil and gas development within their jurisdictions.
The second bill, AB1866, imposes higher fees on inactive but improperly retired oil wells. Newsom’s office mentioned that these wells pose significant risks to the environment and nearby communities.
The same law imposes stricter requirements on oil companies to ensure their responsibility in maintaining and safely sealing abandoned wells to prevent leaks and pollution.
Additionally, AB2716 prohibits the operation of low-producing oil wells and gas wells within the Inglewood oil field and imposes fines of $10,000 per month on these wells until they are permanently sealed and abandoned.
Newsom’s office stated that the funds from these fines will be used for community projects such as park construction.
“These new laws allow local leaders to restrict hazardous oil and gas activities near residences, schools, and other areas based on community needs, and give the state government more tools to ensure abandoned and low-producing wells are closed faster,” Newsom said in a statement. “This is a continuation of our comprehensive efforts to protect communities from pollution and hold large oil companies accountable.”
These measures signed by the Governor have received support from environmental groups, including the Center for Biological Diversity, which sponsored AB3233.
Hollin Kretzmann, a lawyer from the Climate Law Institute at the center, stated that this law will “phase out drilling activities in the Los Angeles plan gradually” under local authority.
The President of the Western States Petroleum Association, Catherine Reheis-Boyd, criticized these bills. She mentioned that these laws will “increase regulatory demands, raising expenses for Californians,” while also escalating reliance on foreign oil.
She stated that these new laws will do nothing to increase oil production, “in fact, it will result in job losses and force us to import more oil from overseas; while the Governor may not halt demonizing our industry, the fact remains that we equally prioritize community and worker safety.”
The goal of the Newsom administration is to gradually phase out gasoline-powered lawnmowers, cars, trucks, and trains as part of the state’s plan to achieve carbon neutrality by 2045.
Last month, Newsom announced a plan authorizing the California Energy Commission to require oil refiners to maintain minimum fuel reserves to “avoid shortages that could lead to consumer price spikes.”
A report highlighted by the environmental nonprofit Sierra Club in 2023 revealed that out of 100,696 oil wells in California, 41,568 are orphaned or abandoned, no longer producing oil. The cost of closing these wells could be close to $23 billion.
According to a recent report from tracking group CarbonTracker, as of April 2022, the cost of closing and restoring all oil wells in California amounts to $21.5 billion, including $10 billion already utilized for orphaned and idle wells. The Club stated that adjusting for the number of wells in the state a year ago, the report estimated the total cost of sealing and abandoning all wells currently at $22.9 billion.