Oil giants sell thousands of California wells, raising worries about future liability
A water well in the San Joaquin River in California in 2015. (Kelsey Snell for The Washington Post)
There are few signs that the oil industry cares much about the California Public Utilities Commission’s new rules requiring it to disclose whether it has been fined for environmental violations.
The oil and gas industry’s lawyers and lobbyists ignored those rules by submitting no responses to the requests, according to emails reviewed by The Washington Post. Some of the industry’s top oil and gas trade groups filed no letters to the agency, which was created by the Legislature in 1992.
The commission’s spokesman, Dan Mogulof, confirmed that company information requests were ignored when it tried to follow up, saying the commission did learn of no violations “until now.”
The state’s major oil companies are eager to drill new wells but have encountered some costly setbacks, and one case in particular has prompted deep concern. The company responsible for the largest oil spill in the state’s history — the ruptured underground well blowout that fouled the San Francisco Bay in April — reported last month that $2 billion in fines for the accident would be paid by the state and federal governments, as well as by the company’s insurance company.
With oil prices falling and the risk of such spills rising, the prospect of a government payout has become a source of considerable debate among regulators and some lawmakers. California is home to one of the four oil refineries that process crude from North Dakota and Texas that have shut down as the oil industry has struggled, and many expect California’s oil industry to be among the hardest hit if the nation’s refineries go belly up.
The state Public Utilities Commission is considering rules meant to curb oil drilling and prevent future accidents at oil and gas wells and storage tanks, and two Republican state senators have suggested they would work with state agencies to assess such a liability, a prospect that would further complicate the oil industry’s relationship with regulators. The agency still must decide whether such rules are necessary, and what they might cost.
In recent months, the agency has received at least two letters on the topic from oil companies, suggesting that the most recent state figures on
