Posts

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