California | December 2019
Field Overview
California, with both onshore and offshore oil production, has been supplying the U.S. with petroleum products since the 19th century. Operations are primarily focused around Kern County, the LA Basin, and the San Joaquin Valley, with the Midway-Sunset oil field in Kern County being the state’s largest.
State Drilling Statistics
Active Drilling Rigs in Basin- 14
Total Rigs in California- 14
Total Rigs in United States- 781
Total U.S. Rigs down 27% YTD
Financial & Economic Updates
Cleanup of orphaned oil wells could cost California $500 million, new report says
- The California Council on Science and Technology estimated that the state already is liable for more than $500 million in cleanup costs for more than 5,500 orphaned wells up and down the state.
- The potential liability far outpaces the funds the state has on hand to combat the issue. The companies holding wells identified as orphaned in the 67-page report made just $26 million available to the state for their cleanup.
- The state’s responsibility could quickly grow, the report says: Another 69,000 wells have little to no production and little hope of restarting, or are held by financially weak businesses.
- The report says orphaned wells are concentrated in Los Angeles and Long Beach, where costs associated with cleanup are “systematically high.” Two orphaned wells that started emitting odors in Echo Park in 2016 cost the state more than $1 million to seal.
State Highlights
Kern County supervisors take aim at state oil policies
- Kern supervisors joined oil industry representatives, local politicians and residents Tuesday in warning state officials that Gov. Gavin Newsom’s regulatory crackdown and moves to wind down in-state petroleum production gravely threaten the county’s economy and tax base. The opportunity to impress upon Sacramento regulators the local impacts of the state’s oil-unfriendly policies drew an audience estimated at about 1,000 industry supporters — the largest crowd convened in recent years for a government proceeding in Bakersfield. Since taking office, Gov. Gavin Newsom has taken steps the industry interprets as anti-oil. In June he set aside $1.5 million in the state budget to fund a study to find ways of reducing California’s petroleum supply and demand. The next month, the governor fired the state’s top oil regulator after environmental activists reported a spike in state permits for the controversial oilfield technique known as fracking.
To stop Trump fracking plans, California is going to court
- The federal lawsuit announced by state Atty. Gen. Xavier Becerra comes after President Trump’s administration announced details of its plan to open more than a million acres of public and private land in California to fracking, ending a five-year moratorium on leasing federal land in California to oil and gas developers.
- The lawsuit alleges that the federal Bureau of Land Management’s final environmental impact statement, approved in December, violates the National Environmental Policy Act and the Administrative Procedure Act because it fails to consider the danger posed to people who might live near the oil and gas wells and underestimated the number of fracking wells that could become active on the federal land.
- Environmental groups filed a similar lawsuit in a Los Angeles federal court earlier this week, citing the threat to public health and potential damage to recreational areas caused by fracking.
Refining
California Gas Production
California Oil Production
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