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Report: CRC’s failure could leave California taxpayers with $900 million burden

by Gabby Brown, Sierra Club


Highlights

  • New analysis from the Sierra Club shows that natural gas exploration company California Resources Corporation (CRC) may leave California taxpayers with $900 million in costs for the remediation of thousands of abandoned oil wells
  • CRC has ownership interest in nearly 18,000 oil wells that can cause greenhouse gas emissions, soil and groundwater contamination, and deteriorating property values if left unplugged 
  • Oil and gas companies are responsible for covering the cost of plugging unused wells, but as many fossil fuel companies experience bankruptcy and can no longer afford to pay for plugging, taxpayers must bear the burden of the cost
  • The Sierra Club’s report, “The Risk of Unplugged Wells for California’s Taxpayers; California Resources Corporation – A Case Study,” illustrates that it is unlikely that CRC will have any revenues set aside for closure obligations by 2025
  • The state-run agency, California Geologic Energy Management (CalGEM), is responsible for ensuring that CRC satisfies its obligations but has not intervened in the bankruptcy process 
  • Monica Embrey, Associate Director of the Sierra Club’s Beyond Dirty Fuels campaign, says it’s imperative that the state hold CRC accountable for oil well clean up:

“CRC may be the first major oil company to fail in California, but it certainly won’t be the last. It’s critical that the state use its authority to protect workers, communities, and our climate by holding these companies accountable for their massive well closure obligations.” 


Fossil fuel divestment and the transition to 100% clean energy is critical to achieving The Climate Center’s goals under the Climate-Safe California Platform.


Read More: https://www.sierraclub.org/press-releases/2020/10/new-report-crc-s-failure-could-leave-california-taxpayers-900-million-burden

Approvals for new oil and gas wells up in California

by Daisy Nguyen, Associated Press


Highlights

  • California issued 2,691 permits to drill new wells or rework existing ones the first half of this year and the issued 48 new permits for hydraulic fracturing
  • Consumer Watchdog and FracTracker have partnered on a “Newsom Well Watch” website and say that California has issued 190% more oil and gas drilling permits in the first six months of 2020

“We should be seeing fewer permits issued. That would be the natural result if we made oil companies pay for the true cost of doing business in California by putting up the money necessary to plug and clean up a well when they get a permit to drill one, as state law allows.”
– Liza Tucker, Consumer Watchdog

  • State officials claim that these groups are misinterpreting the data and say the number of new drill permits were only increased by 7 percent, but the advocacy groups say that the total number of new wells drilled in the first half of 2020 is still 9.2% higher than the first half of 2019
  • Uduak-Joe Ntuk, oil and gas supervisor at the California Geologic Energy Management Division (CalGEM), says that production in California is at its lowest level in the last four decades and that the number of permits issued for sealing old wells outpaced permits for new wells
  • Liza Tucker of Consumer Watchdog said the state was granting permits to companies without guarantees they will cover the cost of sealing old wells that pose pollution risks

The Climate Center is part of the Last Chance Alliance, working to accelerate the phase-out of fossil fuels, which disproportionately harm lower-income communities. The Climate Center’s Climate-Safe California Platform includes guiding principles to protect frontline communities most affected by the extraction of fossil fuels and to ensure a just transition for workers.


Read More: https://apnews.com/d04910d29539d39e24eaa725bcf4545f

Opinion: Methane leaks in the Central Valley may be worsening COVID-19 cases

by Karen L. Jones, California Health Report


Highlights

  • According to the California Department of Public Health, the death rate due to chronic lower respiratory disease is 12 times higher in the San Joaquin Valley compared to the rest of the state and 14 times higher than the national rate
  • The intense pollution in the region can have severe effects on Valley residents who contract COVID-19
  • Kern County does not meet federal ozone and particulate matter standards due to the pollution caused by the region’s petroleum industry among other factors such as unplugged oil wells that leak methane
  • There are reports of several wells leaking at rates over 200,000 percent above the EPA average estimate for western U.S. gas wells
  • Methane leaks detected by using airborne infrared imaging sensors show that nearly 4 billion cubic feet of methane may have been released in Kern County oil fields
  • The gathering of methane plume imagery could help locate and plug methane leaks in oil fields

Increased air pollution from fossil fuel emissions makes all of us more vulnerable to the current COVID-19 pandemic. For a safe and healthy future for all, endorse the Climate-Safe California Platform to implement scalable solutions that can reverse the climate crisis.


Read More: https://www.calhealthreport.org/2020/08/18/opinion-methane-leaks-in-the-central-valley-may-be-worsening-covid-19-cases/

Arctic Drilling

Wall street is bending to pressure to halt Arctic-oil loans

By Jennifer A. Dlouhy, Bloomberg Green


Highlights

Environmental activists are fighting oil companies to keep drilling out of the Arctic National Wildlife Refuge by putting divestment pressure on banks.

  • Tribal representatives and other environmental activists pressed banking executives about their policies during shareholder meetings and in conversations with sustainability directors
  • Morgan Stanley has announced that they will not be financing arctic oil and gas development, becoming the fifth major U.S. bank to announce it will no longer support drilling in the arctic
  • Many large banks have made the same promise, with Bank of America being a major holdout 
  • Though the Interior Department is preparing to sell drilling rights along the arctic coast, the lack of infrastructure makes it hard to locate crude oil, making potential investors have second thoughts
  • Potential drilling could have dire impacts on native wildlife
  • Alison Kirsch, the lead researcher in the Rainforest Action Network’s Climate and Energy Program, says that by cutting off funding, these drilling projects can’t continue:

“A fossil fuel project needs three things to go ahead…It needs government approval– or a permit– but it also needs capital and it also needs insurance. And those last two pieces mostly happen in the private sector. So if you can intervene there, you can stop projects.”

  • Promises by these banks to divest in individual projects does not prohibit the banks from lending to these companies altogether

Fossil fuel divestment and the transition to 100% clean energy is a major step towards achieving The Climate Center’s Climate-Safe California Platform.


Read more: https://www.bloomberg.com/news/articles/2020-04-24/wall-street-is-bending-to-pressure-to-halt-arctic-drilling-loans

 

Oil price collapses to below zero as demand takes a dive during pandemic

From Bloomberg


Highlights

The coronavirus pandemic has caused oil markets to plunge into the negative due to a lack of storage for unused oil.

  •  Michael Tran, managing director of global energy strategy at RBC Capital Markets, says that there is little to be done about the market nose-diving even further:

“Refiners are rejecting barrels at a historic pace, and with U.S. storage levels sprinting to the brim, market forces will inflict further pain until either we hit rock bottom or COVID clears, whichever comes first, but it looks like the former.”

  • As demand decreases and storage is scarce, oil producers are still pumping, resulting in an oversupply of the market and fire sales for producers who don’t have access to storage
  • Even though OPEC recently helped end the oil price war between Russia and Saudi Arabia to curb supply, the effort proving too little, too late in the face of a  collapse in global demand
  • Even before the big price drop, buyers in Texas were offering as little as $2 a barrel and in Asia, bankers are reluctant to give commodity traders the credit to survive as lenders grow ever more fearful about the risk of default
  • Retail investors are continuing to invest money into oil futures despite the recent plunge. The U.S. Oil Fund exchange-traded fund saw a record $552 million come in Friday, taking total inflows last week to $1.6 billion
  • Though crude explorers shut down 13% of the American drilling fleet last week, production cuts are not occurring quickly enough to alleviate the storage issue

The Climate Center’s Climate-Safe California platform aims to secure a positive transition for workers and their families whose livelihoods depend on fossil fuel industries. Endorse the platform here


Read more: https://www.latimes.com/business/story/2020-04-20/oil-prices-plunge-below-zero-wti-may-contract

Bears Ears officially opens to oil and gas

by J. Weston Phippen, Outside Online

As of 9 a.m. on Friday, the protections for what was once Bears Ears and Grand Staircase-Escalante national monuments ceased to exist, and all the surrounding public lands opened to resource extraction.

Sixty days ago, President Trump signed an order in Salt Lake City to reduce the size of the two monuments—Bears Ears by 85 percent and Grand Staircase by half. Today, they officially open to mining claims. There’s been a lot of fuss in the media about how these claims work, because they’re governed by the General Mining Law of 1872. That means anyone with motivation and four stakes can, technically, rush out and claim their own plot, as long as you have the $212 filing fee. But there probably won’t be an 1800s-style land rush.

What’s more likely is the energy industries that lobbied the Trump administration and Utah Republicans to slice up the monuments in the first place will take out big leases. But conservationists who worry the area will fill up with oil platforms and diesel work trucks can rest easy, because not much will change, at least not in the short term.

The land around the two monuments is still public land. It just reverts to its prior jurisdictional patchwork under the BLM, the Forest Service, and the state. Large pieces in the area still have protection as Wilderness or Wilderness Study Area, which ban any development, cars, even bicycles. But within and around these protected areas are chunks of land now open to the energy industry.

Before Obama designated the land a monument in the last days of 2016, energy companies had put in 88 requests to the BLM to lease more than 100,000 acres in or near what later became Bears Ears. But oil companies looking to drill there will now suffer the same problem they do elsewhere in land that is remote and difficult to work: oil is cheap. As of September last year, there were 27 existing oil and gas leases within Bears Ears, according to BLM figures. But in the past decade production in the area has dropped, and there’s cheaper, more accessible oil as close as Northern Utah. Even though existing oil leases were grandfathered into the monument, none were active. In fact, the last active well inside the monument shut down in 1992. Last year, the associate director of oil and gas at the Utah Division of Natural Resources, John Rogers, told Inside Energy there was a lot of interest in drilling the area in the 1960s and 1970s. “But nothing significant was found,” he said. “So all the wells out there have been plugged and abandoned.”

What’s more likely to happen is that companies will buy the leases cheap during Trump’s public lands bonanza, then hold onto them and wait for prices to rise. Until that happens, there probably won’t be many more oil platforms. “That area is just too inaccessible,” John Ruple, a law professor at the University of Utah who focuses on public lands, told NPR. “The oil and gas potential is very low and the cost of getting any product out to a refinery and to market would be very high.”

It’s a similar situation for uranium mining, although the industry applied a lot of pressure on Republicans to shrink the monuments. Trump and Secretary of the Interior Ryan Zinke said over and over that the cuts had nothing to do with energy extraction. But, as The Washington Post’s Juliet Eilperin uncovered, Canadian-owned mining company Energy Fuels Resources had pressed local Republicans, hired lobbyists, and met with the Trump administration in an effort to open certain lands up. The company even emailed Utah Senator Orrin Hatch maps that specified the land it wanted out of the monument. If you look at a map of resource deposits in the area, there’s a fluid stain of potential uranium deposits through the center of Bears Ears. In Trump’s map, his two new monuments largely fall to either side.

The idea of a uranium resurgence is especially insulting to Native Americans who live in the area, due to a history of groundwater contamination. There are people who still won’t drink tap water, like Shanon Sangster, who told The New York Times last month she sends her daughter to school with bottled water. “It’s like we are all scarred by it, by the uranium,” she said.

Energy Fuels runs the only uranium processing mill in the U.S., but it faces the same dilemma as the oil industry. Uranium is cheap, about $22 a pound. That’s about $20 too cheap, according to the Post, to justify mining in Bears Ears. There are more than 300 uranium mining leases in the former monument’s territory, more than one-third of which are owned by an Energy Fuels subsidiary. And while it might be too cheap now to mine new claims, Energy Fuels is playing the long game, hoping America will get over its fears of nuclear energy and uranium prices will surge.

The most visible and obvious changes to Bears Ears or Grand Staircase-Escalante may well be the increased presence of cars and ATVs. Both were still allowed on existing roads in the monument, but Obama’s order put priority on preservation, so their access was restricted. Four-wheeling was actually a huge point of contention in Utah—it got San Juan County Commissioner Phil Lyman thrown in jail four years ago, after he, Ryan Bundy, and their militia illegally rode four-wheelers through Recapture Canyon. Now ATVs will be allowed anywhere on the areas 1,800 miles of road and trail they could drive before. And aside from the general annoyance of whining engines in the backcountry, the conservation argument for not allowing motorized vehicles in the area is that Bears Ears is home to thousands of ancient and sacred archeological sites. Many have already been looted or damaged, and quick access increases risk.

For now, though, the immediate effects of Trump’s decision will mostly be unnoticeable. Mining companies and maybe even a few prospectors will lease land. But promises to revive the coal industry, or cries to open public land and reclaim American energy independence—at time when we’re producing more oil and gas than ever—will likely remain more symbol than reality.

source: https://www.outsideonline.com/2278981/its-d-day-bears-ears?utm_source=InsideClimate+News&utm_campaign=809c56a085-Weekly+Newsletter&utm_medium=email&utm_term=0_29c928ffb5-809c56a085-327824881

Trump administration tears down regulations to speed drilling on public land

by Darryl Fears, Washington Post

The Trump administration is aggressively sweeping aside regulations protecting public land to clear a path for expanded oil and gas drilling.

memorandum from the Interior Department, made public Thursday, directs its field offices “to simplify and streamline the leasing process” so that federal leases to the oil and gas industry can be expedited “to ensure quarterly oil and gas lease sales are consistently held.”

According to the memo, which was dated Wednesday, doing so will ease such “impediments and burdens” as months-long environmental reviews that assess the impacts of drilling and potential spills on land and wildlife.

The new approach requires the Bureau of Land Management to process a proposed lease within six months. Once-mandatory public participation in safety reviews is now left to the discretion of the agency’s field representatives. Public protests of finalized leases will be shortened to 10 days, and a sale can move forward even if disputes are unresolved, according to the memo.

Interior also ended “Master Lease Plans” implemented under the Obama administration to give hunters, anglers and groups hoping to protect cultural artifacts a voice in how public land should be managed when parcels are proposed for leasing.

The moves are consistent with an executive order President Trump issued in his first days in office to fulfill his campaign goal of  “expediting environmental reviews and approvals” to fast-track efforts to fix the country’s roadways and bridges. Trump’s order was later followed by a similar order from Interior Secretary Ryan Zinke.

The bureau’s changes were announced just one day before Interior is scheduled to allow new leasing and mining on millions of protected acres in national monuments. On Friday morning, companies and individuals can stake mining claims in two Utah monuments Trump plans to reduce: Grand Staircase-Escalante and Bears Ears.

The bureau boasted in a statement Thursday that its state offices generated $360 million from sales of oil and gas leases last year, an 86 percent increase from 2016. Rights to parcels covering nearly 793,000 acres of public land were sold. BLM Deputy Director Brian Steed said the revenue increase is “hard proof that our sound energy policy is working for both public lands and Americans in terms of reliable power and job growth opportunities.”

Conservation groups see the issue differently. The Wilderness Society pointed out that oil and gas companies owned leases on 15 million acres before 2017, with thousands of drilling permits they haven’t used.

“Today’s announced sweeping change to BLM’s oil and gas leasing program threatens irreplaceable federal public lands and resources in Utah and across the West,” said Stephen Bloch, legal director for the Southern Utah Wilderness Alliance. He called it a “lease first, think later” policy that is “fundamentally inconsistent with federal laws that demand agencies think before they act and consider the full range of impacts from selling oil and gas leases.”

Michael Saul, a senior attorney at the Center for Biological Diversity, said that it is “deeply disturbing that the Trump administration wants to give fossil fuel companies free rein over our public lands, without community input or disclosing environmental harms.” The changes announced won’t speed up oil and gas leasing, Saul predicted. “They’ll result in rushed, ill-considered, illegal decisions that will be overturned in court.”

In pushing to expand drilling on public land, Trump is following a well-worn path of Republican administrations.

A month before he left office, George W. Bush revived plans to sell oil and gas leases in wilderness areas in eastern Utah that had long been protected from development. Sites included pristine areas in the Nine Mile Canyon region and parts of Desolation Canyon, White River, Diamond Mountain and Bourdette Draw. Interior’s own Board of Land Appeals at the time had issued an administrative ruling backing the leasing prohibition.

And as Sen. John McCain (R-Ariz.) was running for president in 2008, he and his running mate, Alaska Gov. Sarah Palin, were among GOP politicians calling for domestic energy exploration with the chant, “Drill, baby, drill.”

“In a McCain administration, we will authorize and support new exploration and production of America’s own oil and gas reserves, because we cannot outsource the solution to America’s energy problem,” Palin said.

Source: https://www.washingtonpost.com/news/energy-environment/wp/2018/02/01/trump-administration-tears-down-regulations-to-speed-drilling-on-public-land/?utm_term=.385937c8236f