<mediadc-video-embed data-state="{"cms.site.owner":{"_ref":"00000161-3486-d333-a9e9-76c6fbf30000","_type":"00000161-3461-dd66-ab67-fd6b93390000"},"cms.content.publishDate":1666912287643,"cms.content.publishUser":{"_ref":"00000177-ab1c-dfb6-afff-bf5d00c50003","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"cms.content.updateDate":1666912287643,"cms.content.updateUser":{"_ref":"00000177-ab1c-dfb6-afff-bf5d00c50003","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"rawHtml":"
var _bp = _bp||[]; _bp.push({ "div": "Brid_66194821", "obj": {"id":"27789","width":"16","height":"9","video":"1121088"} }); ","_id":"00000184-1bb6-da74-a1bd-1bb6e4430000","_type":"2f5a8339-a89a-3738-9cd2-3ddf0c8da574"}”>Video Embed
Shell and Exxon Mobil have reached a deal to offload 23,000 California oil wells to a German asset management company as the industry takes steps to limit environmental liability for aging wells.
The oil companies, through a joint venture called Aera, have 9,000 inactive wells that have not been capped and could leak oil, brine, and methane. It stands to reason that many of those wells will be passed on to IKAV in the $4 billion acquisition deal, with a costly cleanup bill eventually footed by taxpayers, ProPublica is reporting.
“[Oil wells] get passed on to a smaller company and to a smaller company until someone declares bankruptcy and the public is stuck with the cleanup bill,” Assemblymember Steve Bennett (D-Ventura) told ProPublica.
NEWSOM SLAMMED BY EXPERTS AFTER SHIFTING BLAME FOR CALIFORNIA’S RECORD GAS PRICES
California is unique in that it requires oil companies to post a cleanup bond before they start drilling that outlasts any sale. But it often isn’t enough. Obtaining the cleanup funds is difficult once wells have been sold several times and the initial companies are insolvent.
More than 240,000 oil wells have dotted the state’s landscape since drilling began in the 1800s, the California Department of Conservation said in a report dated Oct. 12. The state puts its number of inactive wells at 5,300.
“New state and federal funding to plug and abandon orphan wells will enable California to significantly expand state abandonment efforts,” the report said. “Screening and prioritizing wells is essential to implementing a systematic approach to address orphan wells across the state and make the most efficient use of the new funds.”
Aera isn’t alone in divesting from assets in California.
California Resources Corp. and Chevron, two of the state’s biggest producers, have shrunk their footprints. CRP has filed for bankruptcy, while Chevron moved its operations to Texas.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
The moves come as Gov. Gavin Newsom (D) has stated he will investigate oil company profits and levy a tax to combat high gas prices.
Another large company, Berry Corp., could also be selling its business that was founded in 1909 during California’s oil boom.
