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California Isn’t Enforcing Its Strongest-in-the-Nation Oil Well Cleanup Law on Its Largest Oil Company

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California Isn’t Enforcing Its Strongest-in-the-Nation Oil Well Cleanup Law on Its Largest Oil Company


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Last October, California passed the nation’s strongest law to address the glut of oil and gas wells that are unplugged and ownerless, many leaking pollutants into the environment.

The legislation required that, as part of any sale or transfer of wells, the purchasing company set aside enough money in financial instruments known as bonds to cover the entire cleanup cost of low-producing wells if the companies go out of business without plugging them. It was a striking departure from the piecemeal steps taken by other state legislatures and federal agencies to reduce the number of orphan wells. California lawmakers repeatedly cited ProPublica’s work on the subject as a reason to act.

But in its first major test, California regulators sidestepped the law.

The California Geologic Energy Management Division, the state’s oil regulatory body, announced in late June that the law does not apply to the merger of California Resources Corp. and Aera Energy, two of the three companies that account for the vast majority of the state’s oil and gas production. If the law had been enforced, the deal would have provided billions of dollars in new bonds to ensure taxpayers weren’t eventually left with the cleanup bill.

Department of Conservation Director David Shabazian explained the agency’s decision in a letter to Assemblymember Wendy Carrillo, the Los Angeles Democrat who sponsored the new law. The bonding requirements “do not apply to stock transfers, nor does the law make any mention of such transactions,” Shabazian wrote. In other words, because Aera is still listed as the operator of the wells, the state can’t act.

That explanation did not appease Carrillo.

“This deal is exactly why we passed AB 1167, the Orphaned Well Prevention Act,” she said in an email to ProPublica and Capital & Main. “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.”

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The merger created the largest oil company in the state, with about 16,000 idle wells, which neither produce oil and gas nor are plugged and are at a higher risk of becoming orphans. That’s 40% of the total number of idle wells in the state.

“It’s an absurd interpretation of the law,” said Kyle Ferrar, who helped write AB 1167 as Western program coordinator with environmental group FracTracker Alliance. “They’re essentially creating a model to get around this bill.”

Richard Venn, a California Resources spokesperson, said in an emailed statement that the companies have plugged more than 5,000 wells and “have active and well-established programs for managing the full life cycle of wells and we have the size and financial resources to address all of our plugging obligations. The merger strengthens those resources.”

“Enormous Dereliction of Duty”

The majority of California’s remaining oil and gas production comes from western Kern County, including massive oil fields abutting Bakersfield.


Credit:
Mark Olalde/ProPublica

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In December, the California Geologic Energy Management Division wrote to the state’s oil companies notifying them that they should submit paperwork before completing “any acquisition” — agency staff bolded those words — to assist the state in determining necessary bonding levels under AB 1167. “This notice is to ensure that operators are aware of new bonding requirements that must be complied with in advance of acquiring certain wells and production facilities,” regulators wrote.

But the state concluded the California Resources and Aera merger didn’t trigger the bonding requirements because of the way it was structured.

In the state’s letter explaining regulators’ reasoning, Shabazian wrote that “if the operator of the well remains constant, changes in ownership of the operator’s holding company do not require new bonds.”

If regulators had applied the law to the merger, California Resources would have been required to put up an estimated $2.4 billion bond to guarantee Aera’s wells will be plugged, according to an analysis of state data. In comparison, that’s about eight times the total value of all outstanding cleanup bonds for all oil companies in the state.

Instead, Aera will continue operating with only a $3 million bond.

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“This particular transaction is itself tremendously consequential, potentially the most consequential transaction that the state will see,” said Kassie Siegel, a senior counsel with the environmental group the Center for Biological Diversity.

Siegel worries that the state’s “enormous dereliction of duty” opens a loophole for the industry. Regulators are “creating a roadmap for other companies to similarly evade the law,” she said.

The agency’s decision also came after Aera spent about $250,000 lobbying in California in the first quarter of the year, including on “1167 implementation,” according to the company’s lobbying disclosure form.

Neither Aera nor state regulators answered questions about the company’s lobbying.

Despite California Resources’ assertions that the company resulting from the merger is financially stable, it faces serious challenges.

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California Resources was formed when Oxy Petroleum spun off its West Coast assets, and the company has already gone through Chapter 11 bankruptcy. California Resources acknowledged in filings with the U.S. Securities and Exchange Commission that the merger left it and Aera with more than $1 billion in impending cleanup costs between them. In the records, the company also suggested that some of its key assets will reach the end of their economic lives in the coming years.

Aera, meanwhile, was sold by Shell and ExxonMobil in 2022 and ended up in the hands of German asset management group IKAV, investment fund Oaktree Capital Management and the Canada Pension Plan Investment Board.

IKAV did not respond to requests for comment, while the Canada Pension Plan Investment Board and Oaktree declined to answer questions.

The office of Gov. Gavin Newsom, who signed AB 1167 into law with a warning that it might need to be amended, also did not answer questions about whether he agreed with his agency’s interpretation of the legislation.

Aaron Cantú of Capital & Main contributed reporting.

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California

A true California hot spot: fire ants invade town loved by celebrities

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A true California hot spot: fire ants invade town loved by celebrities


A swank town in California’s central coast where celebrities from Oprah Winfrey to Prince Harry have bought properties, has become a hot spot for another reason: an active infestation of red imported fire ants.

The Santa Barbara county agricultural commissioner’s office is addressing an active infestation of these ants in Montecito, California, according to a statement issued last week.

This infestation likely originated from ant-infested nursery stock shipped from Riverside county in September 2023, according to officials.

“This is the only known infestation in the county,” according to the statement.

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Staff from the commissioner’s office, along with the California department of food and agriculture, the University of California Cooperative Extension, and Riverside county agricultural commissioner’s office, are conducting regular property surveys.

Red imported fire ants, native to South America, have established themselves in parts of southern California, particularly in Los Angeles, Orange, and Riverside counties, according to researchers at the University of California, Riverside.

The first recorded sighting in California was in 1984. Since then, there have been periodic outbreaks in several counties.

Stings from these ants are painful and can cause pustules that may scar if infected, and a small percentage of the human population is allergic to these stings. Newborn livestock and poultry are also vulnerable to attacks.

These ants can clog irrigation lines, short-circuit electrical systems and displace native wildlife, including young birds and lizards. Their stinging behavior is also hazardous to fieldworkers and poses a significant risk to agriculture by feeding on various hosts, particularly turf.

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The ants, mainly originating from Argentina and Brazil, pose a significant threat to California’s agricultural economy because they require quarantine of nursery products to prevent spreading through potting soil. In Texas, for example, over $1.1bn is spent each year on pesticides for fire ant control and $872m of those funds is used to control the ants from infesting lawns in urban areas.

No fire ants-related quarantines were in place in Santa Barbara amid the infestation.

Nursery products ranked second in value in the county’s agricultural economy, below strawberries, in the 2023 Santa Barbara County Crop and Livestock Report at $122,301,000.

Residents were encouraged to contact the Santa Barbara county agricultural commissioner’s office if they detected these ants or bring a sample to their offices.

“There are native fire ants and Argentine ants that are not hazardous and the quickest way to distinguish RIFA from other ants are their aggressive behavior, not color or size,” the county of Santa Barbara said in a Facebook post.

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Montecito, located about 80 miles west of Los Angeles, is known for its celebrity and affluent community. Current and former residents include Ariana Grande, Adam Levine, Rob Lowe and others.



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Prospect Rundown: California Collegiate League Showcase Rewind • D1Baseball

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Prospect Rundown: California Collegiate League Showcase Rewind • D1Baseball


Easton Elliot is safe on a steal of second in the California Collegiate League Showcase Game.

Summer Baseball

COMPTON, Calif. — The California Collegiate League Showcase game is in the books and once again it was a great platform to highlight some of the better off-the-beaten-path players in college baseball. The game itself saw the South squad race out to an early lead with a run in the first inning and two runs in the second on the way to a 7-2 win over the North squad. 

If you’re interested, here is how the linescore looked at the end of the game… 

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North – 000 010 010 – 2  4  0

South – 120 004 000 – 7 […]



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The best water rides in Southern California, ranked by splash factor

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The best water rides in Southern California, ranked by splash factor


Robotic dinosaurs. Mechanical miners. Unpredictable chaos. Our local water rides offer the promise of getting wet with a dash of surprise and excitement.

Home to four world-class theme or amusement parks, the Southland isn’t lacking in inventive ways to get soaked. Some of these rides are exquisitely designed, emphasizing show scenes and story rather than simply pummeling us with water. Others aim to do exactly that.

The Big Wet Guide to Water

In L.A., water rules everything around us. Drink up, cool off and dive into our stories about hydrating and recreating in the city.

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Getting waterlogged, after all, is part of our history. In 1900, Los Angeles was home to one of the first major American takes on a water ride, Shoot the Chutes at Chutes Park in Historic South-Central. Rising 75 feet, it utilized flat-bottomed boats and a cable to take passengers up an incline.

Today, our water rides are more advanced and just may be among the best in the country. We’ve ridden them all, and did so without ponchos, to grade them based on wetness. Five droplets means you’ll get doused; one droplet is more akin to a light sprinkle.

Missing from this list is Disneyland’s Splash Mountain, which is being refashioned into Tiana’s Bayou Adventure, a “Princess and the Frog”-themed ride that is due to open later this year. We’ll be there when it opens. In the meantime, here’s a ranking of what you can ride now.

Audio-animatronic pirates on the Pirates of the Caribbean ride in a jail cell trying to lure a dog holding the key.

(Charles Sykes / Invision / AP)

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Pirates of the Caribbean

One realistic illustrated water drop

Disneyland’s 1967 boat ride is a leisurely jaunt through a town in the process of being ransacked by inept (read: mostly drunk) pirates. Yet there are two early drops — one moderate and one relatively small. Depending on the weight of the boat or the height of the water, expect to get lightly splashed. Because this is primarily a slow-moving family attraction, the water can either be an unexpected delight or an intrusion. But with reliably brisk air conditioning and a 15-minute-plus length, chances are you’ll dry off by the ride’s conclusion. More important, you’ll have experienced one of the most vital attractions at Disneyland, as its abstract approach to narrative set the template for the modern theme park ride.

Waterworld show at Universal Studios featuring a man on skis being pulled by a jetski.

(Myung J. Chun / Los Angeles Times)

Waterworld

One realistic illustrated water drop

OK, perhaps it’s odd to include a theme park show on a list of water rides. But Universal Studios’ stunt-focused spectacle is centered entirely on water, so it made the cut. Additionally, the large arena that houses the show contains a rather large splash zone, meaning anyone sitting in that particular section of the bleachers will get wet. The show is essentially a love letter to action-driven movie illusions, and a real hoot. Some moments never cease to surprise, such as a full-scale seaplane being jettisoned into the pond. And yes, a splash ensues. Those sitting in the wet sector will get sprayed with a decent amount of water, but if that’s not your thing it’s clearly marked and easy to avoid.

A roller coaster's track runs through water

(Todd Martens / Los Angeles Times)

Jet Stream

Two realistic illustrated water drops

Magic Mountain’s vintage take on a log flume attraction is no-frills — our boats go up a lift, enter a brisk current and then speed down a hill. Oddly, the back seat of the boat has a tendency to get a bit wetter than the front, perhaps because the boats have a propensity to glide when they hit the man-made pond. Still, this can be an essential ride at Magic Mountain, especially in the summer when the Valencia park is often scorching hot. Jet Stream arrived at Magic Mountain in 1972, and though it features no elaborate themes or scenery, the final splash is still an unique sensation, as the boats tend to hop and slightly accelerate upon landing.

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The log flume drop of Timber Mountain Log Ride at Knott's Berry Farm.

Timber Mountain Log Ride

Three realistic illustrated water drops

This 1969 Knott’s Berry Farm attraction is one of the most important log fumes ever created. At the time of its opening, it was a relatively new attraction; the first proper implementation of the ride format opened in 1963 at Six Flags Over Texas. Knott’s, however, gave the ride, one that moves in its flume at a relatively brisk pace, a narrative about turn-of-the-century loggers, showing the world that thrill rides could carry a story. There are a couple of mini drops, but the grand finale is about a 40-foot decline. At times I’ve walked away relatively unscathed. Other times, I’ve been soaked from the waist down.

Animatronic bears loom over theme park-goers on a boat traveling among rocks and rapids

(Sean Teegarden / Knott’s Berry Farm)

Calico River Rapids

Three realistic illustrated water drops

As far as river rapid rides go, I’ve never gotten drenched on this Knott’s Berry Farm attraction. Without a major drop or a rough, fast-moving current, Calico River Rapids has always been to me more about the threat of getting soaked. That’s not to say one should expect a dry experience. (Not at all. You will get wet.) Just that this rapids attraction can be conquered without a poncho. That means as we spin among its current, we can take in the vignettes that are scattered among its rocky banks. My favorite: a young bear engaged in a whack-a-mole-like game with a flock of prairie dogs. But also be on the lookout for a pesky woodpecker.

Jurassic Park water ride boat rushes through water, causing a big splash.

(Myung J. Chun / Los Angeles Times)

Jurassic World

Three realistic illustrated water drops

Universal Studios revamped this ride in 2019 so it aligns with the most recent crop of “Jurassic World” films rather than the initial “Jurassic Park.” In doing so, designers upped its water content. We begin by gliding into a mock aquarium with a shark-eating mosasaurus looking hungrily at us tourists. Expect to be hit with water from above when the dino is shown making a leap out of the tank. But this ride is all about building tension as it leads us to an 84-foot drop. You‘ll want to linger on the top of the hill to marvel at the giant dinosaur battle with a T. Rex that unfolds there. But down you go, and when you reach the bottom it’s likely that a sizable wave will find its way onto your lap.

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People on a raft in a California Adventure water ride bumping against a rock with rapid waters all around them

Grizzly River Run

Four realistic illustrated water drops

Disney’s take on the whitewater rafting ride is robust, coming in at about seven minutes. It begins calmly, as you drift and turn around an old mining town, before the ride truly gets thrilling — and full of water. But what ultimately sets the ride apart is the overall design, which, in a relatively confined space, manages to re-create the feeling of being in a national park. The landscape is calming, but the second half of the ride is hectic, as Grizzly River Run gradually ramps up its pace and the amount of water you take on, eventually culminating with a drop that will bring even more water sloshing into the raft.

A boat full of people floats in a rocky channel amid rapids at a theme park

(Six Flags Magic Mountain)

Roaring Rapids

Five realistic illustrated water drops

Magic Mountain’s Roaring Rapids was instrumental in the development of the whitewater rafting-type ride, as this is the first constructed in the Western U.S. But that also means it runs a little rough, which, in this case, results in riders getting absolutely drenched. As on all rapids rides, the turbulent river, buoyed by narrow chutes, moves in an unpredictable fashion. Expect about four big crushes of water to leap into the raft, and those waves will be massive — there’s no buildup, no pacing and no underlying storyline. To ride Roaring Rapids is to sign up for a soaking.



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