As CA Oil Company Shows, "Carbon Capture" Is Great - For Evading The Responsibility For Cleaning Up Abandoned Oil Wells

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“CRC’s unfunded cleanup liability—the gap between its bonds and the actual cost of cleanup — should be a major concern to taxpayers and to anyone who cares about California’s environment,” said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), in an email. He authored a February 2020 report warning that CRC was at risk of bankruptcy and did not have enough money to cover the costs of cleaning up its wells, which at that time he estimated were $1.2 billion.

Some experts are also concerned that CRC’s carbon storage plans could allow it to delay cleaning up idle wells, because the company might repurpose a portion of them for carbon injection. In an email, Richard Venn, a CRC spokesman, said the company and its subsidiaries “are in compliance with their State bonding requirements” and have “active and well-established programs for managing idle wells.” Venn did not respond to a specific question about whether the company would use idle wells for any of its 38 proposed carbon injection wells, but said, “Idle wells have the potential for reuse and reinvestment in future development activities.”

California requires oil producers to clean up the wells they own or operate once those wells are no longer productive. But companies can leave wells idle without putting them back into production or plugging them. (The cleanup process, also known as plugging or decommissioning, involves sealing a well with a cement plug to prevent chemicals from leaking into the air or leaching into groundwater.)

The state considers a well idle if it has not produced oil for two years or more, but there’s no limit on how long a well can remain inactive. One of CRC’s wells has been idle for more than a century; many have been idle for four decades. Idling a well is often cheaper than plugging it. The state charges producers an annual fee for every idle well, ranging from $1,000 to $22,500 dollars—costs that recently increased—depending upon how long a well has been inactive. The cost to plug a well ranges from $1,200 to $391,000, according to a 2018 report prepared for CalGEM.

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https://insideclimatenews.org/news/12122024/california-oil-producer-eyes-carbon-storage-as-idle-wells-await-cleanup/