California Governor Proposes Bill to Streamline Oil Wells, Bloomberg Reports

California Governor Gavin Newsom proposes a bill to streamline the permit process for new oil wells, potentially allowing two wells to be plugged and abandoned before drilling a new one until 2036. Shares of California Resources (CRC) rose nearly 7% after the announcement.

California Governor Gavin Newsom has proposed a bill that aims to streamline the permitting process for new oil wells in the state. The bill, if passed, would establish a "plug-to-drill" system until 2036, requiring two wells to be plugged and abandoned before a new one can be drilled. Additionally, drillers would no longer need approval from the Geologic Energy Management Division (CalGem) so long as certain conditions are met [1].

The draft bill text suggests that the "plug-to-drill" system would only apply to wells within established oil and gas fields and not within health protection zones. The bill also includes provisions to ensure that the activities approved under the notice of intention for a new well do not require individual take permits for endangered species or streambed alteration permits [2].

The proposal has sparked mixed reactions. While shares of in-state drillers like California Resources Corporation (CRC) and Berry Corp. climbed on the news, environmental groups have expressed concern. The Center for Biological Diversity, Sierra Club, and other environmental groups had previously challenged the Interior Department's approval of permits for new oil wells in the San Joaquin Valley, arguing that environmental and community impacts were not adequately considered [2].

The bill's opponents argue that it grants a "blank check" for unlimited oil drilling across the state, potentially harming communities disproportionately affected by oil and gas extraction. Environmental justice and climate justice advocates have demanded that the governor immediately withdraw the proposal and work on real solutions that protect public health and the environment [3].

Meanwhile, the governor's office has faced criticism over its handling of fracking permits and the investments of top regulators in major oil companies. The Desert Sun/USA Today Network reported that fracking permits have doubled since Newsom took office, and several supervisors charged with regulating the industry own shares in major oil companies. In response, Newsom directed his Secretary of Natural Resources to fire Ken Harris, the state's top oil regulator [4].

The proposed bill and the ongoing controversies surrounding California's oil and gas industry are likely to continue shaping the state's environmental and energy policies in the coming years.

References:
[1] https://news.bloomberglaw.com/environment-and-energy/newsom-proposes-to-ease-permits-for-oil-drilling-in-california
[2] https://news.bloomberglaw.com/litigation/california-drilling-permit-challenge-concludes-against-interior
[3] https://envirovoters.org/proposal-for-blank-check-for-unlimited-oil-drilling-is-unacceptable/
[4] https://www.desertsun.com/story/news/2019/07/10/california-newsom-fire-oil-gas-regulators-doggr-fracking-investments/1685747001/