Senate Bill Assessing Cost of Cleaning Up Oil Passes Assembly

Source: Office of Sen. Jackson

As California moves towards a greener economy and  grapples with the taxpayer costs of cleaning up facilities such as Platform Holly off the coast of Santa Barbara, the California Assembly approved Senator Hannah-Beth Jackson (D-Santa Barbara)’s legislation [Tuesday] to assess the eventual price tag of shutting down and cleaning up California’s oil and gas infrastructure.

The bill passed the Assembly today on a 50-17 vote, and heads to the Senate for final approval this week before heading to the Governor’s desk.

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.

“If we do not know or fully plan for these costs, the public will be more likely to be left unfairly holding the bag for this industry’s mess,” said Jackson. “The more we know, the better we can plan ahead.”

Over the next several decades, California will face the significant challenge of infrastructure that remains from former oil and gas production and current operators when they stop profiting from production. While many assume that oil and gas operators bear the ultimate financial responsibility for shutting down their wells, removing infrastructure, and remediating sites, in several cases so far, California taxpayers are bearing 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 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.

SB 551 has the support of numerous environmental organizations and the County of Santa Barbara.

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