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Thursday, June 13, 2024 | Back issues
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California bills would levy fees on large climate polluters, require cleanup of idle wells

The climate-focused bills must pass their respective houses by May 24 to keep advancing through the Legislature.

SACRAMENTO, Calif. (CN) — Three bills that would bring sweeping changes to how California addresses the climate crisis are headed to a key vote next week that they must pass to stay alive.

Senate Bill 1497 — dubbed the Polluters Pay Climate Cost Recovery Act — would impose billions of dollars in fees on qualifying companies with ties to the Golden State. Assembly Bill 1866 would require the cleanup of idle wells. Assembly Bill 3233 would reinforce local governments' authority over oil and gas production.

The three bills passed their respective Appropriations committees on Thursday. They now must pass a floor vote of their chamber by May 24.

The Polluters Pay Climate Cost Recovery Act — written by state Senator Caroline Menjivar, a San Fernando Valley Democrat — was called “crucial” by Hollin Kretzmann, an attorney with the Climate Law Institute that’s within the Center for Biological Diversity.

The bill would make qualifying fossil fuel companies pay for costs that California has or will face because of climate change. The state would create a climate cost study detailing those costs through 2045. It would assess a portion of those costs linked to greenhouse gas emissions between 2000 and 2020 and then prorate the cost proportionally to the affected companies.

“In 2020 alone, the wildfires cost us about $19 billion,” Kretzmann said.  

Responsible parties under the bill include companies doing business in California that extract or refine fossil fuels and have been responsible for over 1 billion metric tons of fossil fuel emissions between 2000 and 2020.

The revenue collected from the bill could reach into the tens of billions of dollars.  

“It’s exciting that California is moving one step closer to holding the world’s largest climate polluters accountable for the damage their products have caused,” said Kassie Siegel, director of the Climate Law Institute, in a statement. “As the state faces a deficit, the polluters who profited from causing the climate crisis must pay their fair share.”

Appropriations committee staff in a bill analysis said that the bill focuses on calculating and collecting the money to cover damage to the climate. However, there’s little specificity about where the money would go.

“So-called ‘qualifying expenses’ include actions taken to mitigate, adapt, or respond to climate change, which could encompass a dizzying scope of work,” staff wrote.

Assembly Bill 1866 — authored by Assemblymember Gregg Hart, a Santa Barbara Democrat — also would affect companies in the oil business. It would remove the ability for an operator to pay an idle well fee and instead require them to make a plan to fix the well.

There are almost 40,000 idle wells in the state. Kretzmann said another 60,000 active wells will become idle, as production slows. Idle wells, when not properly plugged, leak methane, benzene and other dangerous gases.

Idle wells can become orphan wells if their operators become insolvent and desert them.

Hart’s bill would require well operators to increase the percentage of the wells that they must eliminate each year, until all are gone or plugged.

The bill is opposed by the California Independent Petroleum Association, according to Assembly Appropriations Committee staff in a bill analysis. The association has said California has other tools to ensure it’s not responsible for the wells, like existing well funds that have record balances.

“California operators plugged a record 11,032 wells in the past two years," said Rock Zierman, CEO of the association, in a statement. "This is a result of a state program already in place under AB 2729. The industry is also working with CalGEM to implement AB 1057, ensuring operators can remediate their liabilities and not put that burden on taxpayers. AB 1866 threatens this progress and will make California more dependent on foreign imports.”

Hart in a statement said his bill would protect taxpayers, create thousands of jobs and provide protections to communities.

“ The facts are clear — this serious problem is getting worse and can’t be ignored," Hart said.

The third bill teed up for a vote by May 24 is Assembly Bill 3233, written by Assemblymember Dawn Addis, a Morro Bay Democrat.

It reinforces local governments’ power over regulating, limiting and prohibiting oil and gas operations in its jurisdiction.

According to Kretzmann, the bill responds to California Supreme Court ruling last year that focused on Monterey County. The high court found that a local measure conflicted with the state’s power over the regulation of oil and gas drilling.

Kretzmann, calling the ruling narrow, said the oil industry has been using it as a wedge in local ordinances across the state. Addis’ bill reaffirms a city or county’s decision-making powers over oil and gas production.

“The Supreme Court decision has sowed a lot of confusion about what cities and counties can and cannot do,” he added.

The Western States Petroleum Association opposes the bill, committee staff wrote. That association has said a local ordinance restricting someone’s right to operate a well could expose that government to liability, as it would be a “taking” without any compensation to the operator.

“This bill is a historic advancement in our mission to protect the environment and secure a sustainable future,” Addis said in a statement. “With the governor’s strong and visionary leadership on climate action and eliminating dirty fossil fuels, I am excited to see this bill move through the legislative process and hopeful it will become law.”

Categories / Environment, Government, Regional

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