Newsom Signs Bill to Plug Idle Oil and Gas Wells
Governor Gavin Newsom signed into law AB 1866, which increases the state’s idle well fees and increases the amount of wells that must be eliminated under an idle well management plan (IWMP). The bill also revises the idle well plan.
Scaled Fees
The bill provides a scaled idle wells fee, depending on how long the well has been idle. The bill requires operators who do not file for idle well fees to file a plan each year with the supervisor to provide for the management and elimination of all idle wells, instead of all long-term idle wells. An idle well is eliminated when it has been properly abandoned or it has maintained production of oil or gas, water used in production stimulation, or been used for enhanced oil recovery, reservoir pressure management, or injection for a continuous six-month period.
Prioritization of Wells to be Plugged and Abandoned
The bill also requires companies to prioritize well for plugging and abandonment according to age of the well; indication that the idle well potentially poses a threat to life, health, property, or natural resources; and wells located within 3,200 feet of a “sensitive receptor.”
Increased Elimination Requirements
The bill revises the provision requiring operators to eliminate a specified percentage of long-term idle wells by making it applicable to all idle wells. It also increases each year the minimum percentages of idle wells that operators would be required to eliminate.
Exemptions
The bill exempts an idle well for which an operator has made a diligent effort to locate and access the well and has provided documentation demonstrating that it is infeasible to locate or physically access the wellbore, subject to the approval of the division. It also exempts a well that is the subject of a court-approved settlement agreement entered into on or before December 31, 2024, between a local governmental entity and the operator of the idle well, if that settlement agreement imposes requirements relating to the management and elimination of idle that are more stringent that those in this new law.
Changes to Supervisor Report
The bill also requires the supervisor to include in its annual report on the status of idle and long-term idle wells a list of wells that the division has approved as being inaccessible.
A prior version of this law eliminated the option for a well operator to pay idle well fees. (See Bill to Plug Idle Oil and Gas Wells Passes Out of Natural Resources Committee.)