California regulators decided they lack the authority to enforce the state's new oil well cleanup law on California's largest oil company merger, potentially costing taxpayers billions.
California’s new oil well cleanup law, passed in October, requires companies to set aside bonds to cover cleanup costs during well transfers.
State regulators ruled the law doesn't apply to the merger of California Resources Corp. and Aera Energy, which involves about 16,000 idle wells.
Critics argue this interpretation creates a loophole allowing companies to evade the law’s financial requirements.
Key quote:
“If a company is drilling for oil in California, they should be responsible for cleaning and closing that oil well. Not enforcing the law as intended sets-up our state for a potential financial catastrophe.”
Despite regulatory powers that in some ways are stronger than the state's, LA has been slow and inconsistent in forcing the industry to take responsibility for its leaky legacy, according to a Los Angeles Times/Public Integrity investigation.
