May 12, 2021 | Category: News

The oil and gas industry has received a lot of attention lately with the Biden Administration cancelling BLM oil and gas lease sales and California Governor Newsom announcing plans to unilaterally ban fracking after the California State Legislature failed to adopt a fracking ban.  Those in the California oil and gas industry should also continue to pay attention to the California State Legislature, as other proposed bills are being considered that may affect the industry.  Key bills to watch include:

  1. Senate Bill 47 would allow CalGEM to spend $10 million per fiscal year on plugging and abandoning deserted wells, with the funding being generated by fees charged to oil and gas operators.  Current law limits spending to $1 million to $3 million.  This bill is currently in the suspense file at the Senate Appropriations Committee, so its fate is unknown.
  2. Senate Bill 84 would require additional reporting by CalGEM related to idle wells, in an effort to ensure that idle wells are properly plugged and abandoned.  The bill was adopted by the California Senate and is now being considered by the Assembly.
  3. Senate Bill 406 would require CalGEM to make information collected from oil and gas operators, including notices of intention and field reports, readily available to the public on CalGEM’s website.  The bill is currently in the Senate Appropriations Committee suspense file.
  4. Senate Bill 419 would require operators to hire in-state union workers for construction and maintenance work on oil and gas wells.   The bill is currently pending before the Senate Appropriations Committee.  Given the requirement to hire union workers, one senator noted that the bill “will destroy thousands of local jobs” that are not currently union jobs.
  5. Assembly Bill 896 would create a collections unit within CalGEM to collect unpaid idle well fees and also authorize CalGEM to impose liens upon real property owned by an operator for failing to pay idle well fees and to recover plugging and abandonment costs.  The bill is currently in the suspense file in the Assembly Appropriations Committee.

For more information about these bills and other oil and gas developments, contact California oil and gas attorney Michael Sherman.