Signed by Governor Gavin Newsom

Vote Smart's Synopsis:

Vote to pass with amendment a bill that amends oil and gas pipeline facility decommissioning regulations.

Highlights:

• Requires the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation to begin requiring each operator of an oil or gas well to submit a report to the State Oil and Gas Supervisor that demonstrates the operator's total liability to plug and abandon all wells and to decommission all attendant production facilities, beginning July 1, 2022 (Sec. 1). 

• Requires the Division to develop criteria to be used by operators for estimating costs to plug and abandon wells and decommission attendant production facilities, and must include, but not be limited to, the following requirements (Sec. 1):

• Estimates for site restoration costs to restore each well or production facility site so that it is protective of human health and safety and the environment;

• Operators must use an appropriate California-licensed professional engineer to calculate the estimated cost to plug and abandon each well and decommission attendant production facilities of the operator using the criteria developed by the Division; and 

• Operators must use a certified public accountant employing principles recommended by the Statement of Financial Accounting Standards No. 143, to determine the operator’s liability and how the liability has been accounted for by the operator.

• Authorizes the Supervisor to request the operator to submit revised estimates for the review and approval if the Supervisor determines that the operator has failed to use the proper criteria or has otherwise provided estimates in the report that are neither credible or accurate (Sec. 1).

• Specifies that failure to comply with reporting requirements is a violation and the operator will be subject to any penalty provided by law (Sec. 1). 

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that amends oil and gas pipeline facility decommissioning regulations.

Highlights:

• Requires the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation to begin requiring each operator of an oil or gas well to submit a report to the State Oil and Gas Supervisor that demonstrates the operator's total liability to plug and abandon all wells and to decommission all attendant production facilities, beginning July 1, 2022 (Sec. 1). 

• Requires the Division to develop criteria to be used by operators for estimating costs to plug and abandon wells and decommission attendant production facilities, and must include, but not be limited to, the following requirements (Sec. 1):

• Estimates for site restoration costs to restore each well or production facility site so that it is protective of human health and safety and the environment;

• Operators must use an appropriate California-licensed professional engineer to calculate the estimated cost to plug and abandon each well and decommission attendant production facilities of the operator using the criteria developed by the Division; and 

• Operators must use a certified public accountant employing principles recommended by the Statement of Financial Accounting Standards No. 143, to determine the operator’s liability and how the liability has been accounted for by the operator.

• Authorizes the Supervisor to request the operator to submit revised estimates for the review and approval if the Supervisor determines that the operator has failed to use the proper criteria or has otherwise provided estimates in the report that are neither credible or accurate (Sec. 1).

• Specifies that failure to comply with reporting requirements is a violation and the operator will be subject to any penalty provided by law (Sec. 1). 

Full Bill Text