SACRAMENTO, Calif.— As one of California’s largest oil producers enters bankruptcy, the Center for Biological Diversity and Sierra Club today urged Gov. Gavin Newsom to prevent California Resources Corporation and other troubled oil companies from shirking legal obligations to clean up their wells and prevent pollution. CRC filed for Chapter 11 bankruptcy on Wednesday.
Today’s letter calls on the governor to intervene in CRC’s bankruptcy proceedings to ensure the company sets aside enough money for well cleanup. CRC and its affiliates operate approximately 18,700 wells in California, which could cost more than $1 billion to properly plug, according to the Institute for Energy Economics and Financial Analysis. Of these, 7,826 are already “idle,” which means they’ve produced little to no oil in the past two years.
“Bankruptcy proceedings like these endanger California because oil companies like CRC can weaponize them to dump their environmental cleanup costs on the public,” said Kassie Siegel, an attorney at the Center for Biological Diversity. “Given the huge number of wells at stake, the Newsom administration should intervene quickly to protect the public from those costs and our environment from pollution. More big oil bankruptcies are coming, and Gov. Newsom has a responsibility to be ready.”
“CRC’s bankruptcy is likely just the first of many as the oil industry inevitably declines in California. Gov. Newsom has the tools to protect the public from Big Oil, but so far he hasn’t used them,” said Kathryn Phillips, director of the Sierra Club California. “It’s critical that Gov. Newsom ensure that failing oil companies are held accountable for cleaning up their own mess, rather than leaving taxpayers and workers to pay the price.”
Although oil companies are required to pay for the cost of properly plugging and abandoning wells, they have not set aside nearly the amount required for remediation. Statewide, the California Council on Science and Technology estimates that cleaning up California’s approximately 107,000 oil and gas wells would cost over $9.2 billion, yet the bonds that are supposed to cover these costs total only about $107 million.
Today’s letter also urges Gov. Newsom to take proactive steps to protect the public and the environment in anticipation of a likely wave of future oil and gas bankruptcies. These steps include:
Increasing and accelerating well plugging and abandonment requirements to reduce air and water pollution and create jobs.
Increasing bond requirements to ensure that oil and gas companies set aside enough financial resources to cover the full costs of remediation even if they become insolvent.
Ensuring that the oil and gas industry as a whole – not taxpayers –funds the remediation of truly “orphaned” wells, by increasing the administrative fee on well owners as needed.
Avoiding the accrual of additional well cleanup costs by halting approvals and permits for new oil and gas activity, including new wells and fracking permits.
Taking steps to ensure that oil and gas companies satisfy their obligations to workers by honoring their pension and healthcare commitments.
Despite the dire outlook for the company, Newsom has continued to issue CRC new permits to drill wells. State oil regulators have issued CRC and its affiliates permits to drill nearly 300 new wells so far this year, including 27 new permits in just the first week of July, all without conducting environmental review required by law. Newsom has approved this expansion of drilling operations despite CRC’s long record of violating safety and environmental regulations.
“As other companies flirt with insolvency, the governor should accelerate well remediation by solvent operators, increase bonding levels on existing wells, and stop digging the hole deeper by handing out new drilling permits,” said Siegel. “Forcing companies to clean up their own messes would create jobs, keep the public safe from unattended wells and make sure polluters are the ones paying for cleanup.”
Statewide, Newsom has issued 1,500 drilling permits for new wells so far this year. He also lifted a moratorium on fracking by authorizing 360 new fracking events over the past few months.
In 2014, CRC was created as a spin-off by Occidental Petroleum and took over Occidental’s California oil and gas wells. Since then, CRC has performed poorly, earning “junk bond” status from ratings agencies. CRC blamed the coronavirus pandemic and economic downturn for the bankruptcy, but CRC was at high risk of bankruptcy even before these events, as detailed in a report from the Institute for Energy Economics and Financial Analysis.
Here’s why Gogama’s Makami River ‘will never be pristine again’
Small town pushing Ministry of the Environment to require CN to continue clean-up
By CBC News, Aug 10, 2016 7:33 AM ET
The fencing around the site of the Gogama train derailment is coming down today, as the clean-up from the oil spill has been declared complete. But residents say their local waters are still contaminated with oil.
Sheens of oil are commonly seen on the Makami River, over which the oil train derailed in March 2015, as well as lake Minisinakwa, on which the town is built.
People have also found several dead fish in recent weeks and wondered if it’s connected to the spill.
“I understand it’s never going to be pristine again,” says Gogama Fire Chief Mike Benson. “There was no sheen, there was no dead fish, there was no oil spill on Mar. 6, 2015.”
“So, we got to try to get it closer than that. Let’s get it to the point that there’s no fish dying. And I’m not going to die of throat cancer in five years because I’ve been eating the fish out of this lake.”
Benson said CN rail is willing to continue the clean-up, but has been told by the Ministry of Environment that the work is satisfactory.
CN has agreed to let more soil samples be taken from the site and be sent away for independent testing, along with some of the dead fish, at the company’s expense.
In a statement the railroad said that “CN recognizes that local citizens have identified areas of concern, where they believe further clean up should be done in order to protect human and fish populations. CN is today on the ground in Gogama, working with local residents to identify specific areas.”
Benson said he was surprised to find out over the last year and a half that the railroad was responsible for the environment testing, not the Ministry of the Environment.
“I can’t believe our government tells the fox to test the chickens,” Benson told a public meeting of over 100 people at the Gogama Community Centre, which ministry officials were invited to attend.
“Because that’s basically what they were doing. They were saying ‘OK, you got a mess. Tell us when it’s clean.'”
Benson said Ministry of Environment officials are aware of the oil slicks in the water, but don’t seem concerned.
“We were going down the lake and we saw oil and he said ‘Well, just because there’s oil doesn’t mean it’s necessarily dangerous,” he said.
Ministry officials may not have been at the meeting on Tuesday night, but they were in Gogama the following day to take water samples on Lake Minisinakwa.
In a statement, the ministry said it “takes the concerns expressed by the citizens of Gogama and Mattagami First Nation very seriously and greatly appreciates direct reports from the citizens of their observations. These reports enable our staff to respond in a timely manner to collect further information that can be used in guiding further action as appropriate.”
The ministry statement also said that further fish testing in the Gogama area is planned for the fall, but reiterated that the fish tested last fall showed no signs of contamination.
Band councillor suggests a protest to shut down the railroad
CN officials had planned to attend the meeting, but were called away at the last minute.
After expressing their frustrations for over an hour, the crowd erupted in applause, when Chad Boissoneau suggested that one way to get attention would be to “shut down” the railroad with a protest.
He is a band councillor in the nearby Mattagami First Nation and has headed up efforts to keep up in the pickerel population in area lakes.
“The clean-up shouldn’t be determined by what MOE feels is satisfactory, the clean-up should be determined by the community members and what’s satisfactory to them. Because we’re the ones that have to live here,” says Boissoneau, adding that oil has yet to be sighted in the waters by the first nation, which is downstream from the spill.
Several people from Timmins, which draws its drinking water from the Mattagami River downstream from the spill, also attended the meeting and there was mention of how these waters run all the way to the James Bay Coast.
Towards the end of the meeting there was talk of circulating a petition that Nickel Belt MPP France Gelinas could table at Queen’s Park and including these downstream communities.
Gelinas said until now people in Gogama were always hesitant to draw too much attention to the oil spill, fearing it would hurt the local tourism industry. But many lodges are reporting a drop in business anyway.
“There was always this reluctance to talk about it too much outside of Gogama,” she says.
It’s hard to get Toronto politicians to care about a little town called Gogama
“If you’re ready to sound the alarm bells, I have no doubt that the people from Sudbury will support you, the people from Timmins will support you and the people from everywhere in Ontario will support you if you’re ready to reach out and speak loud.”
Gelinas said she too has had trouble getting government officials to give time to the concerns of a small town called Gogama.
“If this environmental disaster had happened closer to Toronto, things would have been handled very differently,” she said at the meeting.
Repost from WBKW, Buffalo NY [Editor: See also the video report at WGRZ Buffalo, which clarifies that three cars carried ethanol and one carried propane. 45 homes were evacuated to a nearby church. – RS]
Controlled burn at Ripley train derailment
WKBW Staff, Mar 1, 2016 11:51 PM, Updated Mar 3, 2016 4:18 AM
RIPLEY, N.Y. (WKBW) – A controlled burn was held at the site of the Ripley train derailment Wednesday night into Thursday morning. Crews worked to ignite what was left of the propane in train cars that went off the tracks Tuesday.
This comes after emergency officials asked residents around Route 76 in the Town of Ripley to shelter in place following the train derailment Tuesday night.
Governor Andrew Cuomo’s office said that 15 rail cars traveling on the Norfolk Southern lined derailed around 11:20 p.m. Three rail cars were carrying the hazardous liquid ethanol turned on their side. One was said to be leaking.
As a result the Ripley Central Schools were closed Wednesday and government officials asked residents to shelter in place.
“I have directed the state Department of Homeland Security and Emergency Services’ Office of Emergency Management, the Office of Fire Prevention and Control, the Department of Environmental Conservation as well as foam equipment to assist in suppressing the spill and provide support to hazmat teams that will be working to patch the leak,” Cuomo said in an emailed statement Wednesday morning.
Several homes were evacuated in the vicinity of the derailment. Chautauqua County Sheriff’s deputies say no one was hurt.
U.S. Not Prepared for Tar Sands Oil Spills, National Study Finds
By Codi Kozacek, Circle of Blue, 10 December, 2015 16:07
Report urges new regulations, research, and technology to respond to spills of diluted bitumen.
Spills of heavy crude oil from western Canada’s tar sands are more difficult to clean up than other types of conventional oil, particularly if the spill occurs in water, a new study by a high-level committee of experts found. Moreover, current regulations governing emergency response plans for oil spills in the United States are inadequate to address spills of tar sands oil.
The study by the U.S. National Academies of Sciences, Engineering, and Medicine confirmed what scientists, emergency responders, and conservationists knew anecdotally from a major oil spill that contaminated Michigan’s Kalamazoo River in 2010 and another spill in Mayflower, Arkansas in 2013. Tar sands crude, called diluted bitumen, becomes denser and stickier than other types of oil after it spills from a pipeline, sinking to the bottom of rivers, lakes, and estuaries and coating vegetation instead of floating on top of the water.
“[Diluted bitumen] weathers to a denser material, and it’s stickier, and that’s a problem. It’s a distinct problem that makes it different from other crude.”
–Diane McKnight, Chair Committee on the Effects of Diluted Bitumen on the Environment
“The long-term risk associated with the weathered bitumen is the potential for that [oil] becoming submerged and sinking into water bodies where it gets into the sediments,” Diane McKnight, chair of the committee that produced the study and a professor of engineering at the University of Colorado Boulder, told Circle of Blue. “And then those sediments can become resuspended and move further downstream and have consequences not only at the ecosystem level but also in terms of water supply.”
“It weathers to a denser material, and it’s stickier, and that’s a problem. It’s a distinct problem that makes it different from other crude.” McKnight added. Weathering is what happens after oil is spilled and exposed to sunlight, water, and other elements. In order to flow through pipelines, tar sands crude oil is mixed with lighter oils, which evaporate during the weathering process. In a matter of days, what is left of the diluted bitumen can sink.
The study’s findings come amid an expansion in unconventional fuels development and transport in North America. Over the past decade, Canada became the world’s fifth largest crude oil producer by developing the Alberta tar sands. U.S. imports of Canadian crude, much of it from tar sands, increased 58 percent over the past decade, according to the U.S. Energy Information Administration.
Though oil prices are at a seven-year low, and market turbulence is expected to persist for several more years, tar sands developers are working to double the current tar sands oil production — around 2.2 million barrels per day — by 2030. Pipelines to transport all of the new oil are expanding too, producing a greater risk of spills.
Whether tar sands producers achieve that level of oil supply is not assured. Public pressure is mounting in Canada and the United States to rein in tar sands development due to considerable environmental damage and heavy carbon emissions. U.S. President Barack Obama last month scrapped the Keystone XL pipeline, an 800,000-barrel-per-day project to move crude oil from Canada’s tar sands to Gulf of Mexico refineries. An international movement to divest from fossil fuels and a legally binding global deal to cut carbon emissions –if it is signed in Paris– could curb demand for tar sands oil.
The National Academies of Sciences, Engineering, and Medicine study adds new data to arguments made by critics of tar sands development.
“The study really confirms a lot of the information that has been out there, there are no real surprises,” Jim Murphy, senior counsel for the National Wildlife Federation, told Circle of Blue. “You don’t want these things to be affirmed because it’s bad news for communities. But the good part about a study like this is hopefully it will prompt some action. Some folks were hiding behind the lack of a study like this, saying we don’t really know. Those excuses have gone away.”
“The chief takeaway is that this is a different oil, it presents different challenges, and responders and regulators simply don’t have the structures in place to deal with the challenges,” he added.
Nonetheless, energy companies are pursuing pipeline expansions, most notably in the Midwest and Great Lakes regions. Enbridge, Canada’s largest transporter of crude oil, operates a 3,000-kilometer (1,900-mile) pipeline network, known as the Lakehead System, that carries crude oil from Canada to refineries on the Great Lakes. The Lakehead system, in concert with Enbridge’s Canadian main line, is capable of transporting 2.62 million barrels of oil per day. The pipeline responsible for the 2010 oil spill in Kalamazoo was part of the Lakehead system. A link in the Lakehead system ruptured in 2010 and spilled more than 3 million liters (843,000 gallons) of tar sands oil into southern Michigan’s Kalamazoo River. It was the largest inland oil spill in U.S. history and its effects still linger because of oil that sank and is embedded in the river’s sediments.
“The chief takeaway is that this is a different oil, it presents different challenges, and responders and regulators simply don’t have the structures in place to deal with the challenges.”
–Jim Murphy, Senior Counsel
National Wildlife Federation
Enbridge is currently pursuing upgrades to its Alberta Clipper pipeline, which runs through Minnesota and Wisconsin, in order to boost the line’s capacity to 800,000 barrels per day from 450,000 barrels per day. A second project aims to increase the capacity of Line 61, a pipeline that runs from Wisconsin to Illinois, from 560,000 barrels per day to 1.2 million barrels per day. Opposition to the company’s operation of a pipeline that runs beneath the Straits of Mackinac, where Lake Michigan and Lake Huron join, has been especially fierce, though the line does not currently carry tar sands oil.
“I think at the very least we should be saying no to more tar sands through the [Great Lakes] region until we get a firm handle on how to deal with the unique challenges that tar sands spills present,” Murphy said. “We should also be taking a hard look, as the president did with the Keystone XL decision, about the other negative impacts of more tar sands oil, like the consequences in Alberta with the habitat destruction there, and also the higher carbon pollution content of the fuel.”
The National Academies study concluded that the characteristics of diluted bitumen are “highly problematic for spill response because 1) there are few effective techniques for detection, containment, and recovery of oil that is submerged in the water column, and 2) available techniques for responding to oil that has sunken to the bottom have variable effectiveness depending on the spill conditions.”
“Broadly, regulations and agency practices do not take the unique properties of diluted bitumen into account, nor do they encourage effective planning for spills of diluted bitumen,” it continued.
The study’s authors made a series of recommendations to help reduce the damage from future tar sands spills, including:
Update regulations that would require pipeline operators to identify and provide safety sheets for each crude oil transported by the pipeline, catalogue the areas and water bodies that would be most sensitive to a diluted bitumen spill, describe how they would detect and recover sunken oil, provide samples and information about the type of oil spilled to emergency officials, and publicly report the annual volumes and types of crude oil that pass through each pipeline.
Require the Pipeline and Hazardous Materials Safety Administration (PHMSA), the federal agency that regulates pipelines in the United States, to review spill response plans in coordination with the U.S. Environmental Protection Agency and U.S. Coast Guard to determine if the plans are capable of responding to diluted bitumen spills.
Develop methods to detect, contain, and recover oil that sinks to the bottom of water bodies.
Require government agencies at the federal, state, and local level to use industry-standard names for crude oils when planning spill responses.
Revise oil classifications used by the U.S. Coast Guard to indicate that diluted bitumen can sink in water.
Collect data to improve modeling of diluted bitumen oil spills.
Improve coordination between federal agencies and state and local governments when planning and practicing oil spill response exercises.
Develop a standard method for determining the adhesion –a measure of how sticky the oil is–of diluted bitumen in the event of a spill.
After the study’s release, PHMSA said it would develop a bulletin advising pipeline operators about the recommendations and urge voluntary improvements to their spill response plans. The agency also plans to hold a workshop next spring to hear public input on how to implement the recommendations, coordinate with other federal organizations to “advance the recommendations”, and work with industry representatives to improve spill response planning.
“We appreciate the work the National Academy of Sciences has done over the last few years in analyzing the risks of transporting diluted bitumen, including its effects on transmission pipelines, the environment and oil spill response activities,” Artealia Gilliard, PHMSA spokesperson and director for governmental, international and public affairs, said in a statement. “All pipelines transporting crude oil or any other hazardous liquid are required to meet strict federal safety regulations that work to prevent pipeline failures and to mitigate the consequences of pipeline failures when they occur.”
Codi Yeager-Kozacek is a news correspondent for Circle of Blue based out of Hawaii. She co-writes The Stream, Circle of Blue’s daily digest of international water news trends. Her interests include food security, ecology and the Great Lakes.