Oil giants sell thousands of California wells, raising worries about future liability
This year, the energy giants behind some of the biggest wells in the Golden State sold more than 7,600 oil and gas wells — all of which they drilled in California. The oil and gas industry sells its products to producers without a license, and the state doesn’t hold it legally responsible for groundwater contamination caused by drilling, said Michael Shively, groundwater program director at the Natural Resources Defense Council, a New York-based advocacy group. “We don’t have a license. We don’t have a permit. We don’t have any type of regulation and oversight. We just rely on the regulatory system of the federal government” to protect California public health and the environment, he said. The oil and gas industry pays the state and federal government for the right to drill, and it was required to pay $13.8 million to clean up the contaminated sites in 2008, according to the California Department of Toxic Substances Control.
A California law exempts oil and gas companies from paying for the air, water or land they create. As a result, the state did not include a fine for the oil and gas companies’ violations of groundwater protections in its fiscal 2012 budget, the agency said in a statement. The agency is now looking into whether to assess liability against the oil companies for paying to clean up their drilling sites in violation of state regulations, said Jennifer O’Day, an agency spokeswoman. “We’re currently investigating,” O’Day said in an email. “The (state) Legislature passed a statute that exempts oil and gas companies from having to pay to clean up oil spills and toxic waste from their drilling activities, which the Legislature also made a misdemeanor.”
Exxon Mobil Corp. and BP PLC, the two largest oil companies in California, and four smaller companies in the Golden State drilling for oil and gas will pay about $13 million to clean up their drilling sites after the state’s Department of Toxic Substances Control found they were not properly licensed to do so, the agency said Thursday.
The amount represents a fraction of the $1 to $2