Oil giants sell thousands of California wells, raising worries about future liability
As the price of oil continues to climb, Big Oil has quietly begun what could become a game-changing and costly strategy: selling tens of thousands of California wells in the hope of protecting their oil holdings from lawsuits over pollution, according to a new report.
But the trend could also put the state on a collision course with Big Oil and California regulators. It comes at a time of rising tension over how to fight the ongoing climate crisis and the impact of more than 2,000 oil and gas wells across the state.
At the heart of the California debate is the question of liability: If oil and gas companies are allowed to hide behind their oil field leases, are they also allowed to hide behind their bottom lines? The argument that some of the largest drillers are making is that their oil assets are protected from claims by environmental officials and others that their wells release climate-warming gasses, such as methane, a potent greenhouse gas that can warm the planet in its own right.
Lawsuits by victims of spills across the globe and oil field leaks in California have already been costly, with the state having spent nearly $300 million in lawsuits and settlements with energy companies over natural gas leaks in the Sacramento-San Joaquin Delta and a Chevron well blowout. The state is seeking a $1 billion class-action settlement in a spill in Kern County. Meanwhile, a Chevron suit in the Central Valley has cost the state more than $20 million and is still in settlement discussions.
But the new report by the state attorney general’s office, released Thursday, provides a glimpse into a new, aggressive strategy among the industry that is using state and federal laws to argue they don’t have to pay for oil spill clean-up.
The California attorney general’s office’s new report found that “nearly half of the state’s 2,700 active oil and gas