Bill Passed to Assess Cost of Oil and Gas Cleanup

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Source: Office of Senator Hannah-Beth Jackson

As California moves towards a greener economy and grapples with the taxpayer costs of cleaning up facilities such as Platform Holly and the Greka offshore facility, the California State Senate approved Senator Hannah-Beth Jackson (D-Santa Barbara)’s legislation to assess the eventual costs of shutting down California’s entire oil and gas infrastructure, including cleaning up and remediating wells, facilities, and equipment associated with production. The bill passed the Senate on a 22 to 13 vote.

Senate Bill 551 directs the state’s Division of Oil, Gas and Geothermal Resources (DOGGR) to develop a process to assess the cost of decommissioning all oil and gas infrastructure within its jurisdiction. 

“The cost of cleaning up abandoned oil and gas infrastructure is significant to California taxpayers. In the Santa Barbara region alone, we have spent over $150 million of taxpayer dollars to clean up facilities such as Platform Holly and the abandoned Summerland wells. Senate Bill 551 will provide the state and taxpayers with the transparency we need to understand the full scope of the problem and plan for liabilities in the future,” said Senator Hannah-Beth Jackson.

As California meets its targets to decarbonize its economy over the next several decades, the state will be faced with the significant challenge of infrastructure that remains from former oil and gas production. While many assume that oil and gas operators bear the ultimate financial responsibility, in several important cases so far California taxpayers are bearing considerable costs for removing major infrastructure and remediating sites left abandoned by bankrupt oil companies.

One example of California state funds used to decommission oil and gas wells can be found off the Santa Barbara coast. Decommissioning Platform Holly, which was initiated in 2017 as a result of the 2015 Refugio oil spill and subsequent bankruptcy of oil operator Venaco, is currently estimated to cost upwards of $180 million. Similarly, the state now bears responsibility for shutting down Rincon Island, an artificial offshore structure formerly owned by a now-defunct operator. Estimated costs to the state are north of $50 million.

Senate Bill 551 now moves to the Assembly.

Jackson represents the 19th Senate District, which includes all of Santa Barbara County and western Ventura County.

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