Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

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Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities
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Oil platforms off Santa Barbara coast (file photo)

Source: Office of Sen. Jackson

As the state works to combat climate change and move toward a fossil fuel-free future, Governor Gavin Newsom recently signed Senator Hannah-Beth Jackson (D-Santa Barbara)’s legislation to assess the eventual price tag of shutting down and cleaning up California’s oil and gas infrastructure.

Senate Bill 551 directs the Division of Oil, Gas and Geothermal Resources (DOGGR) to develop a process for assessing the costs of decommissioning all oil and gas infrastructure within its jurisdiction, and requires operators of an oil or gas facility to report its total liability for plugging and abandoning all wells and other facilities beginning in July 1, 2022 and at least every five years thereafter.

“I am very pleased Governor Newsom signed this bill into law, recognizing it as a key step in the planning process as we transition away from fossil fuels. If we do not know or fully plan for these costs, the public, in far too many instances, will be left unfairly holding the bag for this industry’s mess,” said Jackson.

Over the next several decades, California will face the significant challenge of infrastructure that remains from oil and gas production.  While oil and gas operators are required to bear the ultimate financial responsibility for shutting down their wells, removing infrastructure, and remediating sites, in several cases they are refusing to do so, leaving California taxpayers paying the costs.

One example of California state funds used to decommission oil and gas wells can be found in the offshore production off the Santa Barbara coast.

The decommissioning of Platform Holly, initiated in 2017 as a result of the 2015 Refugio oil spill and subsequent bankruptcy of oil operator Venoco, 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 and bankrupt operator. Estimated costs to the state are more than $50 million.

This legislation is part of Jackson’s long-standing efforts to address the fiscal and environmental impacts of oil and gas production in California. Her prior legislation includes:

  • Senate Bill 834, which became law on January 1, 2019, blocks the Trump Administration from expanding federal oil drilling off the California coast by ensuring that new pipelines and other infrastructure needed to support federal oil development cannot be built in California waters.
  • Senate Bill 44, Coastal Well Cleanup and Remediation Act (2017): Requires the State Lands Commission to monitor and plug orphaned wells when the original oil company that operated the well no longer exists.
  • Senate Bill 414, Rapid Oil Spill Response Act (2015): Authored in the aftermath of the Refugio Oil Spill to make oil spill response faster, more effective, and environmentally friendly.
  • Senate Bill 295 (2015): Helps reduce the risk of oil spills from pipelines by requiring the State Fire Marshall to annually inspect all intrastate pipelines and pipeline operators.

 

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

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AdamVant Oct 14, 2019 03:56 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

90% of our electricity is generated from oil, coal, natural gas, nuclear and hydroelectric power. Our society depends on generating electricity. Electricity is what keeps us barely civilized. Without electricity there is no heat, no water, no lights, no computers, no phones. Progressives think electricity is generated by fairy dust and unicorn farts. Where do you Progressives think we will get our electricity? Such fools.

macpuzl Oct 14, 2019 04:19 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Simple - phase out coal, oil, nuclear, and natural gas. You know, the toxic ones. Phase in renewables. Maybe you can figure out what those are. Reptiles seem to run on hot air in the venturi between their ears. Such fools.

a-1571101412 Oct 14, 2019 06:03 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

ADAMVENT please provide a reference to your claim about progressives' beliefs on the source of electricity. Clearly you must think hydrocarbons are going to flow out of the earth for hundreds more years 'coz, y'know, JC is your saviour. Unicorns and fairy dust indeed.

Red Creek Oct 14, 2019 08:40 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Not True ADAMVANT . Where do your numbers come from? According to the Energy Information Office of the U.S. government, 63% of electricity is generated from fossil fuels. As of March 2019, the total energy consumption EIA statistics for 2018: 17% of energy came from renewables, 19 % nuclear and 63.5 % fossil fuels of coal, gas and oil. https://www.eia.gov/tools/faqs/faq.php?id=427&t=3 . More importantly, even with resistance from the present administration, non- fossil fuel use continues to decline, while renewables slowly gain ground.

a-1571168008 Oct 15, 2019 12:33 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

They're afraid of "inconvenience." That's where you might have to sacrifice just a teeny bit of your time and then maybe start caring about to help reverse this downhill slide we're on environmentally. If you're selfish and self-centered and don't give a s--t about quality of life now or later, then oh . . . the horror of being inconvenienced.

a-1571169472 Oct 15, 2019 12:57 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

It’ll be interesting when gruesome Newsom gets rid of the oil producing wells - societal breakdown will become the new normal. And then we’ll all be at the mercy of the criminal element. All the libs will be hiding from their own shadows.

a-1571172282 Oct 15, 2019 01:44 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

at 1:00pm - No need to wish us "good luck" with renewables, we're already successfully using them. Over 20% of our energy now comes from renewable energy. We HAVE set the example and we ARE starting now. Do you not know how to use the internet? Here's a couple articles: https://www.forbes.com/sites/rrapier/2019/06/10/u-s-renewable-power-capa... ------------- and ---------------------https://e360.yale.edu/digest/renewable-energy-capacity-now-exceeds-coal-...

AdamVant Oct 15, 2019 03:03 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Red Creek: 35.1% of our electricity is generated from natural gas, 27.4% from coal, 0.6% from petroleum, 0.3% from other gases, 19.3% from nuclear, and 7.0% from hydropower. A measly 1.6% is generated from solar and 6.6% from wind. Source: U.S. Energy Information Administration. Without electricity our American society would not exist. Without electricity there would be no lights, no water, no heat. It'd be anarchy. We'd be barbarians. That's apparently OK with you virtue-signaling Progressives who continue to believe in your fairy tale utopia. Who will be the leaders of your utopia? Probably President Santa Claus and Vice-President Easter Bunny.

macpuzl Oct 15, 2019 03:07 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Once again, it's illuminating of your value system that you equate civilization with electrification; that is, technology. Civilization is our societal pact to live in groups, which you seem to think is extremely frail. It just shows what you think of your fellow citizens.

a-1571177311 Oct 15, 2019 03:08 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

ADAMVANT - you are 100% wrong. First of all your figures are wrong (cite a reviewable source like we all did, not just a name). Second, no one is pursuing a "no electricity" future, we just want to move away from non-renewable sources of energy. Why are you so viciously against that?

macpuzl Oct 15, 2019 03:14 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

And, to further quote the EIA:

===============================================================================
"In 2018, 28% of global electricity was generated from renewable energy sources, most (96%) of which was produced from hydropower, wind, and solar technologies. In its International Energy Outlook 2019 (IEO2019), the U.S. Energy Information Administration (EIA) projects that renewables will collectively increase to 49% of global electricity generation by 2050. Of the top three renewable sources, EIA expects solar’s share of generation to grow the fastest and hydroelectric’s share to grow the slowest.
EIA’s international outlook includes analysis of eight countries and eight multicountry regions. Different regional- and technology-specific factors influence the growth rates of renewable technologies throughout the world.

Resource availability, renewable policies, regional load growth, and declining technology costs drive EIA’s projected increase in global electricity generation from solar technologies. As more solar power systems have been installed, installation costs have experienced the steepest cost declines of all renewable technologies in recent years, and EIA expects that they will continue to decline as a result of learning-by-doing effects."
===============================================================================
Full report available at:
===============================================================================
https://www.eia.gov/todayinenergy/detail.php?id=41533
===============================================================================

AdamVant Oct 15, 2019 03:16 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Here you go, A-1571177361: https://www.eia.gov/tools/faqs/faq.php?id=427&t=3. You can't move away from coal, nuclear, and natural gas. You can't generate enough electricity to power our society. I don't pay attention to silly people who think solar panels and windmills are the answer. Photovoltaic cells have been around since the 50s. Windmills have been around since 100 AD. If we could power our society with intermittent sun and wind then we would be by now. If you want to believe in some imaginary source of energy then go ahead. I laugh at you.

macpuzl Oct 15, 2019 03:26 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Of course, that's not what's being said on the page you linked. It simply details current levels of sources for electrical energy production. It doesn't go psycho and start ranting about how you can't use renewables. In fact, the EIA web pages in toto advocate the increased use of renewables. When you're flapping around grasping at web pages to make a point, you should at least read them.

macpuzl Oct 14, 2019 05:57 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Iceland and Norway already generate all their electricity from renewables, and the United Kingdom is already at 50%. Just think what we could do if we looked to the future and weren't sliding backwards instead, both for the world and for our economy, by investing in new technology.

a-1571116612 Oct 14, 2019 10:16 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

"Iceland Has Highest Per- Capita C02 Emissions in EU and EFTA." (European Free Trade Association) (Iceland Review, 2018). And "Norway is a large energy producer, and one of the world's largest exporters of oil." (Wikipedia)

macpuzl Oct 14, 2019 10:44 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

10:16 PM - Yeah, right up there with giants like Luxembourg. Your figures are for the business sector, not households, and is large (in appearance) because of use of fossil fuel for maritime and air transport of goods. It's small in aggregate because the population is small. But we were talking electricity generation in this thread. Both Norway and Iceland generate all of their energy from renewable sources.

Shasta Guy Oct 15, 2019 06:57 AM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Both Norway and Iceland are blessed with geography and geology the enables abundant hydro and hydrothermal electrical production. With their relatively small populations they can produce enormous amounts of renewable energy for themselves. However, most countries cannot be like them, and we shouldn’t compare ourselves to them. If California had the equivalent of say 20 Shasta Dams then we could Possibly be like Norway. Large scale industrial countries (and states like CA) cannot operate on unpredictable renewables like solar and wind. Take a look at what’s happening in Germany with their “Energiewende” or complete transition to renewable energy. Electrical costs are soaring and the risk of grid failure is increasing. Heavy industry can’t function or compete well when those sources of renewable are the majority source. Let’s see how the slow German economic suicide runs its course and if California should follow their lead. From Der Spiegel: https://www.spiegel.de/international/germany/german-failure-on-the-road-...

a-1571149250 Oct 15, 2019 07:20 AM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Why is this bill not "how to retrofit all roofs with solar"? Shouldn't it be sourcing replacement energy? Not that solar would make a huge dent, but it's there, available. What was that you say? Too expensive? You mean more expensive than a bunch of bean counters pandering to a nutty politician while pretending to count something they never intend to do? Oh. I did not know that.

sea dog Oct 15, 2019 07:48 AM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Solar is awesome but energy companies are trying to limit what they pay for it. We pay $.15 Kw hr for electricity while the power companies want to pay only $.039 Kw hr for solar power. Some power companies are also starting a charge for using their power lines. As many people found out recently, solar does not keep the lights on during a blackout w/o an expensive and toxic battery. Far from green, solar panel are so toxic that only one toxic waste dump in Ca takes them. Solar panels cost more to throw out than they do to buy. They do last a long time unless you have a hail storm like they recently had in N. Ca. Entire solar panel displays were destroyed along with the roofs they were on !

macpuzl Oct 15, 2019 01:28 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

But the taxes are an attempt to rectify the huge hidden subsidies that prop up big oil, not only in overt subsidies, but in the form of letting them skate for all the environmental damage they do. We need to at least double those taxes to reflect the true cost to society.

PitMix Oct 16, 2019 08:35 AM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

This is not true. CA state taxes total about 55 cents/gal. Federal is another 18 cents. For your statement to be true, we would have to be paying less than $1.56/gal. Can you let me know where you are getting this cheap gas? Did you know you were posting something untrue or do you just not care?

KE6HTS Oct 15, 2019 08:37 AM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Ignorance is bliss for some people.. or the people indoctrinated in California schools and universities. The first question is prove the need to reduce/eliminate fossil fuels with facts rather than dogma. Naturally, the people supporting this ill thought out legislation don't have the education to answer this question. They do have the indoctrination though :(.

BlueHorseshoe Oct 15, 2019 10:24 AM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

It may just be me, but it seems like the Edhat rants in the comments section is beginning to lean further and further Right, bravo! About time we enlist the closet republicans to actually talk about the issues from a logical and financial standpoint. It got really old listening to the cheerleading of financially defunct propositions and acts that promote the handouts instead of moving the state forward. Now, as for the oil & gas industry. I question how the state plans to promote less oil & gas when their policy against the current power companies is to allow them to shut down millions of customers for 5-7 days, pushing everybody to go buy a generator. Seems like the wrong direction and they can't even keep their movements cohesive.

macpuzl Oct 15, 2019 12:21 PM
Governor Signs Bill to Assess Cost of Shutting Down Oil Facilities

Most climate science deniers are diehard conservatives. Conservatives are predisposed to be xenophobic, more religious, more repressive of women’s rights, with little concern for fairness or equity, and to hold a pessimistic view of human nature. They are much less open to new experiences of any type, and are much more prone to authoritarianism and to group think. This is the opposite of scientific thought. Staunch conservatives are the least capable of thinking critically and rationally about anything that comes into conflict with their ideology. Conservatives correctly recognize that if anthropogenic global warming is true, then governments need to play a leading role in dealing with the issues. Major governments of the world will have to collaborate to solve the problem. That is totally anathema to the "greed is good" free market capitalist belief system. Therefore, anthropogenic global warming cannot be true in their view, and is rationalized as a hoax, despite the overwhelming scientific evidence to the contrary.

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