California Department of Conservation

11/15/2024 | News release | Distributed by Public on 11/15/2024 12:17

State Oil and Gas Well Abandonment Expenditure Plan - Phase 2

State Oil and Gas Well Plug and Abandonments

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​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​An oil and gas state abandonment is the plugging and abandonment (permanent closure and sealing) of an orphan or deserted (or potentially deserted) oil and gas well through a state contract. Because the wells concerned are orphan or deserted, they do not have a financially solvent, responsible operator. Where there is a financially solvent, responsible operator, CalGEM will first pursue a plug and abandonment at the operator's expense.​

​​A well is plugged by placing cement in the well​bore or casing at certain intervals, as specified in California laws or regulations. The purpose of the cement is to seal the well-bore or casing and prevent fluid from migrating between underground rock layers. Cement plugs are required to be placed across the oil or gas reservoir (zone plug), across the base-of-fresh-water (BFW plug), and at the surface (surface plug). Other cement plugs may be required at the bottom of a string of open casing (shoe plug), on top of tools that may become stuck down hole (junk plug), on top of cut casing (stub plug), or anywhere else where a cement plug may be needed. Also, the hole is filled with drilling mud to help prevent the migration of fluids.​​

Useful reference: What are Orphan Wells? ¿Que Son Pozos Huérfanos?​



Latest Actions/Announcements

Subscribe to the ​Oil & Gas Outreach ​listserv​​ to receive updates for public meetings and other announcements.​​

2024

State Oil and Gas Well Abandonment Expenditure Plan - Phase 2

October 2024: CalGEM released the final Phase 2 State Abandonment Expenditure Plan on Thursday, October 14, 2024. The plan includes the second phase of orphan wells proposed for permanent plugging and sealing using state and federal funds. All public comments received were considered for incorporation into the plan.

Project PLUG​​ Work Updates: AllenCo​

October 7, 2024:The Department of Conservation held a public Zoom/In-Person hybrid meeting on the work to permanently plug and seal oil wells at the AllenCo site.​


September 24, 2024​

The Department of Conservation held a webinar to provide the public with an update on the project timeline. This project was initially scheduled to begin this summer. Unfortunately, additional documentation is necessary to meet federal approval requirements, which has pushed out the timeline. Based on the current projection, work is anticipated to begin in the 4th quarter of 2024 (October-December). ​

StateOil andGas Well ​​Abandonment Expenditure Plan - Phase 2​​

July 16, 2024:​​ CalGEM​​ released its Phase 2 State Abandonment Draft Expenditure Plan​ on Tuesday, July 16, 2024, at 5:30 p.m. during a virtual public meeting. ​The draft plan includes the second phase of orphan wells proposed for permanent plugging an​​d sealing using state and federal funds. The 45-day public comment period ended August ​19, 2024.​ All public comments received will be considered for incorporation into the plan.

Ab​​​​a​ndonment Projects

  • Oxnard and AllenCo meetings: Public meetings were held mid-June in Oxnard and Los Angeles (AllenCo) to answer questions or concerns. The meetings were held in English and in Spanish.
    • ​​​Oxnard Community Meeting, June 18, 2024​​
      • ​​(Spanish coming)
    • Los Angeles Community Meeting, June 24, 2024​
      • ​(Spanish coming)
  • Kern and Arvin Community Meetings: Wells in the Kern County have been prioritized to be plugged and permanently sealed. Public meetings were held mid-May in Bakersfield and Arvin to answer any questions or concerns.​​ Contracts for this work have been completed and work in the Arvin area can now begin.


​2023

​​​Requests for Qualifications

  • December 14, 2023​: The submission period for qualified firms to apply for oil well plug and abandonment and various related services within the counties of Kern, Fresno, Ventura, and Simi Valley located in the northern portion of Los Angeles County​ has ended. ​
  • November 30, 2023: The submission period for qualified firms to apply for oil well plug and abandonment and various ​related services within the counties of Los Angeles, Orange, San Bernadino, Riverside, San Diego, Inyo, and Imperial has ended.

State Oil and Gas Well ​​Abandonment Expenditure Plan

​​October 17, 2023: CalGEM released its final State Oil and Gas Well ​Abandonment Expenditure plan on Tuesday, October 17, at 5:30 p.m. during a virtual public meeting. The plan includes the Department's initial list of orphan w​ells it will permanently plug and seal using state and federal funds.​​​​​​

​​​July 18, 2023:​ CalGEM​​ released its State Abandonment Draft Expenditure Plan​ on Tuesday, July 18, 2023, at 5:30 p.m. during a virtual public meeting. ​The draft plan includes the initial list of orphan wells proposed for permanent plugging and sealing using state and federal funds. The release began a 45-day public comment period that ended on October 4, 2023. All comments received will be considered for incorporation into the regulations.​​

State Abandonment Funding

​There are four sources of funds used for state abandonments:

  • The Oil, Gas, and Geothermal Administrative Fund (OGGA) is funded by operator assessment fees. Starting with the 2021/2022 fiscal year, expenditures from this fund to plug and abandon wells are capped at $5 million per year.

  • The Hazardous and Idle-Deserted Well Abatement Fund (HIDWAF) is funded by operator idle well fees and continuously appropriated to CalGEM to plug and abandon wells to mitigate a hazardous or potentially hazardous condition. There are, however, limitations to spending from the HIDWAF - the well to be plugged and abandoned must be hazardous or idle-deserted and must be a "well of an operator subject to the requirements" of PRC section 3206 (idle well regulations).

  • In fiscal years 2022/2023 and 2023/2024, $50 million in California state General Fund dollars are appropriated to CalGEM to plug and abandon orphan and deserted wells - for a total of $100 million dollars over the two years.

  • In August 2022, California was awarded $25 million in initial grant funding from the federal government's orphan well program authorized in the bipartisan Infrastructure Investment and Jobs Act. California is eligible for potentially an additional $140 million in future grants.

​For Contractors

​​For contractors performing public works plugging and abandonment services, CalGEM has provided​ various resources and documents to help ensur​e compliance with applicable laws, regulations, and other requirements.​​

​Key Facts

  • California's crude oil production has declined steadily in the last few decades, increasing the number of nonproductive, or "idle", wells throughout California.
  • CalGEM maintains an idle well management regime that includes the most rigorous testing standards in the country and collects fees that can be used to fund the plugging and abandonment of deserted and orphan wells-wells that likely do not have a responsible, solvent operator to appropriately plug and abandon the well, leaving their proper abandonment to the State.
  • ​Currently there are over 37,000 known idle wells in California, all of which will eventually come to their end of life, and their operators will be required to plug the wells and decommission associated production facilities.
  • The state has also documented over 17,000 wells that have been idle for over 15 years and over 5,000 wells that are orphan, deserted, or potentially deserted​ wells. Left un-remediated, these wells and facilities can contaminate waterways and soil, serve as a source of climate and air pollutants, and can present physical hazards to people and wildlife.
  • CalGEM may determine the status of a well as deserted based upon specific criteria laid out in the PRC. Evidence of desertion under the PRC includes, but is not limited to, failure to pay idle well fees, the operational history of the well or production facility, the response or lack of response of the operator to inquiries and requests from CalGEM, the extent of compliance by the operator with the requirements, and other actions.​

​State Abandonment Authority

The Public Resources Code (PRC) provides various presumptions and circumstances under which CalGEM may find that a well has been deserted. If CalGEM determines a well has been idle-deserted, then CalGEM may order the plugging and abandonment of the well. If an operator fails to rebut such presumptions and fails to commence the ordered work, then CalGEM may undertake the plugging and abandonment of the well. CalGEM's options for funding the plugging and abandonment differs depending upon the solvency of the operator.

  • CalGEM may find a well to be deserted, and therefore order the well plugged and abandoned, based upon credible evidence. Credible evidence that a well has been deserted includes, but is not limited to, the operational history of the well, the response or lack of response from the operator to inquiries and requests from CalGEM, the extent of compliance by the operator, and other actions of the operator with regards to the well. If such evidence exists, CalGEM may order the plugging and abandonment of the well.
  • CalGEM may order to be carried out or undertake the abandonment of a well CalGEM determines to be a hazardous or an idle-deserted well under PRC section 3255. A hazardous well is a "well that is a potential danger to life, health, or natural resources and for which there is no operator responsible for its plugging and abandonment." To order or undertake the abandonment of a well under PRC section 3255, a well must not only be deserted - it must also be orphan. CalGEM must assess the financial resources of the operator and determine there is no operator with the financial resources to fully cover the cost of plugging and abandoning the well.






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