Bill Charging Low Production Oil Wells Advances In California Senate, Says Consumer Watchdog

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Jun 26, 2024, 15:43 ET

SACRAMENTO, Calif., June 26, 2024 /PRNewswire/ -- Legislation charging $10,000 per day to oil wells producing less than 15 barrels per day within a half mile of a community passed out of the California Senate Natural Resources Committee by a vote of 6 to 4. The bill now moves to the Senate Appropriations Committee.

It's estimated that 2.7 million Californians live within 3,200 feet of an oil well. These Californians suffer higher rates of respiratory illness, prenatal defects, and cancer. AB 2716, authored by Assemblymember Isaac G. Bryan (D-55, Los Angeles), takes aim at wells in these dangerous zones that are adding significantly to these health risks while producing only insignificant amounts of oil.

"Oil drillers would rather keep these low production wells running and poisoning communities than pay the cost to plug them," said Assemblymember Isaac Bryan. "There needs to be accountability for reckless drilling in communities when there is almost no economic benefit and people pay the price with their health."

Wells that produce less than 15 barrels of oil per day are known as "stripper wells" because they are considered to be at the end of their economically useful life. It is cheaper for drillers to keep them running with low production than to plug them at a cost of $100,000 or more per well.

By comparison, half of the country's oil and gas production between 2012 and 2022 came from wells that produced between 100 and 3,200 barrels per day, according to the Energy Information Administration. An onshore well that produces between 1,000 and 3,000 barrels of oil a day is considered a good production range.

"Oil drillers that continue to drill for so little oil so close to communities need to be held accountable, particularly as drillers challenge the legislative ban on new permits for community drilling at the ballot box," said Jamie Court, president of Consumer Watchdog, the sponsor of AB 2716. "Drillers need to be incentivized to clean up their messes, which are poisoning communities."

Considering that 83% of the active oil wells in California communities are operating as stripper wells, AB 2716 has the potential to positively impact community health across the state. Stripper wells in communities make up only 8% of the state's oil supply, according to the FracTracker Alliance.

FracTracker Alliance found that overall statewide oil production averages 3.3 barrels per day per well based on CalGEM data for 2022. But for wells located within 3,200 feet of homes and other sensitive receptors from schools to hospitals the amount of 2.1 barrels per day is 36% less.

Consumer Watchdog is the sponsor of AB 2716. The group said the average community well's two barrel of oil output is not even enough to fuel four Ford F-150 trucks.

While critics say AB 2716 targets small oil producers, the fact is big oil companies own most of the stripper wells. Out of 30 operators that own these stripper wells within the setbacks, Chevron, California Resources, Sentinel Peak Resources and Aera Energy own the most, according to FracTracker Alliance research.

SOURCE Consumer Watchdog