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California
California Isn’t Enforcing Its Strongest-in-the-Nation Oil Well Cleanup Law on Its Largest Oil Company
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.”
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”
Credit:
Mark Olalde/ProPublica
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.
“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.
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.
A Bay Area couple charged in the murder of a 2-year-old girl who reportedly overdosed on fentanyl earlier this year failed to appear in court last week to face the charges.
The tragic incident occurred just after 5 a.m. on Feb. 12, according to the San Francisco County District Attorney’s Office.
Officers with the San Francisco Police Department responded to an apartment in the 3800 block of 18th Street, near Mission Dolores Park, after receiving a 911 call reporting that a child was not breathing.
“Medics arrived at the location and pronounced the two-year-old child deceased,” the DA’s office said in a news release. “Medics observed signs of rigor mortis and lividity, indicating the child had been dead for several hours.”
Responding officers noted that Michelle Price, 38, the girl’s mother, was slurring her speech and had “an emotionless demeanor,” according to court documents. Investigators also observed drug paraphernalia in the apartment, including three pipes, lighters and torches, a used Narcan container, white powder ultimately identified as fentanyl, bottles of spoiled milk and stained sheets on the bed.
Price was arrested for child endangerment.
Her boyfriend, Steve Ramirez, 43, allegedly attempted to flee the apartment on a bicycle, leading police on a chase during which an officer was injured. At the time of his arrest, Ramirez was reportedly in possession of a pipe inside a bag on his bike. Two additional pipes with burnt residue were also found nearby, investigators said.
Blood samples taken from Price and Ramirez at the time of their arrests showed high levels of methamphetamine and fentanyl in their systems, according to the DA’s office.
An autopsy performed by the San Francisco Medical Examiner’s Office revealed no obvious signs of physical injury to the toddler. However, toxicology testing showed lethal levels of fentanyl, as well as naloxone, commonly known as Narcan, in the child’s bloodstream.
“The cause of death was determined to be acute fentanyl poisoning,” the release stated.
Price was initially charged with felony child endangerment, possession of fentanyl and possession of drug paraphernalia. Ramirez faced the same charges, along with an additional count of resisting, obstructing and delaying a peace officer.
Over the objections of prosecutors, both Price and Ramirez were allowed to remain out of custody ahead of their arraignments.
On April 15, San Francisco District Attorney Brooke Jenkins announced an amended complaint charging the couple with second-degree murder, marking the first time such charges have been brought in a fatal fentanyl overdose case in the county.
“There wasn’t really anywhere safe for this child to be inside of this home,” Jenkins said during a press conference announcing the charges. “This is a moment in time where people have to realize that we take these situations very seriously and where, I believe, parents who knowingly possess fentanyl, who understand its lethality and the danger it poses, allow their children to be exposed to it, this is something that can come with respect to accountability if a child dies.”
At the April 16 arraignment, where both defendants failed to appear, Price’s attorney told the court she may have experienced transportation issues. An attorney representing Ramirez said he did not know his client’s whereabouts, according to KTLA’s Bay Area sister station KRON.
While both attorneys said the couple was mourning the loss of the child and struggling with addiction, Ramirez’s lawyer accused the district attorney’s office of turning the case into a media circus, claiming the publicity caused his client to panic.
The judge subsequently issued bench warrants for both Price and Ramirez. It remains unclear whether either has since been taken into custody.
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As the nation prepares for its 250th Independence Day celebration, a decades-long California Fourth of July fireworks tradition that has raised millions for local children’s programs is going dark this year after the California Coastal Commission rejected a final effort to keep it alive, citing environmental concerns to protect the bay.
“We’ve raised over the past 14 years $2 million for kids programs here in Long Beach,” event organizer John Morris told Fox News Digital, adding the July 3 event is fully funded by the local community.
“This community pays for everything — everything. City fees, and the city doesn’t give us a break. We pay $20,000 to the city for police and fire, which I’m fine with, because there’s 100,000 people enjoying the fireworks,” said Morris, a Long Beach resident and business owner.
Morris, who owns the Boathouse on the Bay restaurant, had planned a scaled-up fireworks display this year to mark America’s 250th Independence Day.
CALIFORNIA BEACH TOWN BANS THE USE OF BALLOONS
Long Beach residents have enjoyed the fireworks organized by John Morris for over a decade. (Scott Varley/MediaNews Group/Torrance Daily Breeze via Getty Images)
In January, Coastal Commission staff rejected the proposal, and last week commissioners unanimously upheld that decision despite an appeal backed by local, state and federal officials.
Regulators warned Morris last year that 2025 would likely be the final year for fireworks at the event, as they continue pushing organizers to switch to drone shows they say are more environmentally friendly.
The decision stands in contrast to other approvals by the commission, including a permit granted to SeaWorld allowing up to 40 nights of fireworks.
“They get 40 nights in Mission Bay. All I’m asking for is 20 minutes — it doesn’t make any sense,” Morris said.
Morris, 78, also pushed back on the environmental concerns cited by the commission, pointing to years of testing around the event.
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Due to the lack of fireworks, Morris has decided to cancel the July 3rd celebration.
“We’ve had 10 years of environmental studies,” Morris said. “We test the water before and after the fireworks and send a robotic camera into the bay to check for debris — there’s never been any. It’s been spotless.
“We’ve also had eight years of bird reports to make sure we’re not harming wildlife. We’ve never had an issue. We’ve never been written up one time. So what is it really about?”
Joshua Smith, a spokesman for the California Coastal Commission, told Fox News Digital that permits are determined on a case-by-case basis, citing environmental concerns to “protect the bay.”
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Organizer John Morris said environmental studies are regularly conducted to measure the impact of the fireworks show on the bay. (Allen J. Schaben/Los Angeles Times via Getty Images)
Smith said Morris was approved for a permit to hold a drone show in lieu of fireworks. Morris told Fox News Digital such a show would cost about $200,000 — roughly four times more than traditional fireworks.
Smith confirmed that SeaWorld received a permit allowing 40 nights of fireworks. When pressed on the discrepancy, he reiterated that decisions are made individually and declined to provide further details.
Morris said the loss of the fireworks show will be felt across the community, from local businesses to families who have made the event an annual tradition.
LOS ANGELES (AP) — In the wide-open race for California governor, billionaire Tom Steyer is on a spending binge.
The hedge fund manager-turned-liberal activist is using his personal fortune to saturate TV screens and mobile phones with advertising, while his competitors accuse him of trying to use his vast wealth to buy the state’s most powerful job.
Steyer’s ads — in which he promises to bring down household costs or rails against federal immigration raids — appear inescapable at times in heavily Democratic Los Angeles, the state’s largest media market. Data compiled by advertising tracker AdImpact show Steyer has spent or booked over $115 million in ads for broadcast TV, cable and radio — nearly 30 times the amount of his nearest Democratic rival.
If he makes it through the June 2 primary election, Steyer could easily eclipse the 2010 record set by Republican Meg Whitman, who spent $178.5 million in a losing bid for governor, much of it her own money. At the time, it was the costliest campaign for statewide office in the nation’s history.
Even when ad buys from all his major competitors are combined, along with ad purchases by independent committees supporting candidates, Steyer is outspending the field by tens of millions of dollars.
“Billionaire money is flooding our state in an attempt to buy this election,” former U.S. Rep. Katie Porter, one of Steyer’s chief rivals, warned her supporters this month.
Mail-in ballots are set to go out to voters next month. Steyer is among a crowd of candidates hoping to seize a spotlight after former Democratic U.S. Rep. Eric Swalwell’s dramatic departure from the race following sexual assault allegations that he denies.
But while Steyer has ticked up in polling amid his spending splurge, he has not broken away from the field, leaving some wondering if he’s getting value for his dollars.
“If your first round of ads doesn’t move you dramatically (in the polls), the third, fourth, fifth, six, seventh and eighth rounds won’t either,” said veteran Democratic strategist Bill Carrick, who for years advised the late Democratic U.S. Sen. Dianne Feinstein. “There is something inherently holding Steyer back.”
In recent prior campaigns for governor, at this stage a leading candidate was taking control of the race. This year, voters appear to be shrugging at a contest that lacks a star candidate among seven leading Democrats and two Republicans.
“Somehow the campaign is frozen,” Carrick added.
History shows that money doesn’t always translate into votes.
Billionaire developer Rick Caruso spent over $100 million in 2022 in his bid to become Los Angeles mayor, much of it his own money, but he was handily defeated by Mayor Karen Bass, who spent a fraction of Caruso’s total. Billionaire former New York City Mayor Michael Bloomberg spent more than $1 billion of his own money on his 2020 presidential bid before dropping out. And Steyer’s money was unable to lift him into contention in the 2020 presidential contest, when he dropped out early in the year after a poor finish in the South Carolina primary.
Steyer has never held elected office.
In a 2019 interview with The Associated Press, Steyer was asked what he would say to people who think he’s trying to buy the presidency.
“I don’t think that’s possible,” Steyer said at the time, before adding, “I’m never going to apologize for succeeding in business. That’s America, right?”
His campaign did not respond directly when asked about similar criticism facing his run for governor.
“Tom now stands as the only Democrat with the grassroots energy, institutional backing and resources to advance to the general election,” spokesperson Kevin Liao said in a statement.
The governor’s race was recently reordered by two developments: Swalwell, a leading Democrat, abruptly withdrew from the race then resigned from Congress, following sexual assault allegations. Meanwhile, President Donald Trump endorsed conservative commentator Steve Hilton.
Still, there is no clear leader.
Polling in late March and early April by the nonpartisan Public Policy Institute of California found a cluster of candidates in close competition: Democrats Steyer and Porter, Republicans Hilton and Chad Bianco, and Swalwell. Other candidates were trailing. The polling was conducted before Swalwell withdrew.
Democrats have feared the party’s large number of candidates could lead to them getting shut out of the general election in November. That’s because California has a primary system in which only the top two vote-getters advance to the general election, regardless of party.
Leading Democrats are all claiming to have picked up support since Swalwell’s exit. Steyer nabbed one plum endorsement, when the influential California Teachers Association, which previously backed Swalwell, recommended him.
In his ads, Steyer promises to “abolish” U.S. Immigration and Customs Enforcement, which has been staging raids across California. In another, he laments the state’s punishing cost of housing, “Everybody needs an affordable place to live,” he says.
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