Supported by The Climate Center

AB 1167 (Carrillo) Orphan well bonding requirements

Image credit: Jay Calderon - The Desert Sun

Existing law requires a person who acquires the right to operate a well or production facility, whether by purchase, transfer, assignment, conveyance, exchange, or other disposition, to submit to the State Oil and Gas Supervisor (CalGEM) or a district deputy certain materials, including either an individual indemnity bond or a blanket indemnity bond in certain amounts.

This bill would require a person who acquires the right to operate a well or production facility, whether by purchase, transfer, assignment, conveyance, exchange, or other disposition, to instead file with CalGEM a bond for the well or production facility in an amount determined by CalGEM to be sufficient to cover, in full, all costs of plugging and abandonment and site restoration. Because the bill would change the bonding requirement for the acquisition of a well or production facility, and, thereby would change the scope of a crime, this bill would impose a state-mandated local program. The bill would require CalGEM to maintain records of all transfers recognized as complete, including all materials required to be provided by the new operator, and to make those records available in a searchable and aggregable format on the CalGEM’s website.

Committee Location: Set for a March 27 hearing in the Assembly Natural Resources Committee

Full bill text and related information.

Bill author