Decommissioning Oil and Gas infrastructure in California
The transition to renewable energy will entail closing thousands of oil and gas extraction facilities. Learn more about this process here.
Decommissioning Defined
Why Decommission?
Decommissioning is a process that involves ending production, dealing with the extractive infrastructure, cleaning up the site, and managing its possible futures.
Fossil fuel infrastructure can stop producing for several reasons. Sometimes wells run dry. Over time well infrastructure may deteriorate leading to catastrophic malfunctions as key mechanical elements reach the end of their useful lifespan. Today, some wells are intentionally closed in response to community demands or new policies to abandon fossil fuels.
Wells must be properly decommissioned by plugging the drill site and dismantling the well. The abandonment of wells has been ongoing ever since the first oil well in California was drilled in 1865. Nonetheless, the decommissioning process has only recently become more standardized but there remain thousands of idle and orphaned wells in California.
In California, the following terms are commonly used to classify oil and gas wells...
Plugged:
a well that has been permanently sealed and shut down is classified as "Plugged." For our purposes, plugged wells are considered to be decommissioned. California's decommissioned wells are shown as clusters on this map.
Plugging a well involves sealing the wellbore with cement at multiple intervals within the hole that accesses oil deposits beneath the well. Sealing wells in this way is intended to prevent leakage of oil, methane, and toxic waste into underground rock layers and aquifers.
California law requires that a well must be properly plugged when the operator reports it is no longer productive or when inspections of the infrastructure identify potential hazards to the community or the environment.
Idle:
a gas or oil well that has not produced for at least two years. The clusters on the map show wells that are classified as idle or as "plugged only," meaning a well that has been sealed but not decommissioned and could theoretically be reactivated.
California law requires well operators to submit an Idle Well Management Plan detailing how and when each idle well owned by an operator will be plugged. If no plan is submitted, the operator is assessed an Idle Well Fee, paid annually for each idle well. Assessed fees for the idle wells in California in 2021 reached a total of US$17.5 million. When an operator fails to pay the fee the State will order the decommissioning of the well.
As of January 1, 2022 there were approximately 36,000 idle wells in California.
Active:
a gas or oil well that is currently extracting oil. Shown here are wells in California classified as either "active" or "new" by the Department of Conservation (CalGEM). Wells typically remain productive for 20-40 years. This map shows clusters of active and new wells.
New oil drilling sites must adhere to specific regulations in terms of their proximity to communities. Often times these regulations limit exposure to toxins and aim to limit pollution. However in some cases new drilling sites may be approved without being fully scrutinized.
Orphan:
a well that has no known responsible or financially viable operator capable of plugging and decommissioning it. Orphan wells left unplugged can leak toxic chemicals into groundwater and methane into the atmosphere. While there are over 5,000 orphan wells in California, there are likely millions of orphan wells nation-wide .
In 2019 California established standards of oil and gas well compliance. Although this initiative resulted in the plugging of numerous non-viable wells, many "legacy" wells remain open. These so-called orphan wells may have remained idle for decades or in some cases the locations were lost over time.
In 2022 California Geologic Energy Management Division ( CalGEM ) developed a plan to deal with the 5,287 orphan wells whose locations are known (the locations of an additional 44 orphan wells are unknown). The plan outlines three prioritization scenarios to rank well decommissioning priority.
This map shows the Scenario 1 classifications of orphan wells, which prioritizes the decommissioning of wells that are within disadvantaged communities and may present risks to those communities if left unplugged. Highest priority wells (Tier 1) are shown as red dots and the lowest priority wells (Tier 5) are shown as blue dots.
California's Oil and Gas Wells Today
There are over 214,000 oil and gas wells in California. Roughly half of those wells have been permanently decommissioned, or plugged. This map shows California counties symbolized according to the ratio of decommissioned to total wells in each county. Click on a county to see the percentages of active, plugged, and idle wells.
Why Track Decommissioning?
The Paris Agreement is a legally binding international treaty on climate change that was adopted in December 2015 by 196 countries. Three years after announcing its withdrawl, the U.S. formally pulled out of the agreement in November 2020. Meanwhile, California, along with 24 other states have vowed to collectively cut emissions 26 to 28 percent by 2025, compared to 2005 levels in the U.S. Climate Alliance . Decommissioning of fossil fuel infrastructure in California contributes to global carbon neutrality goals but is also important at local scales.
Accountability
Almost daily we read in the news reports of oil, gas or coal facilities shutting down. In October 2022, for example, LA County approved an ordinance to phase out wells within 20 years! Oil is a century-old industry in this area, and activists have campaigned for almost as long to shut it down because of its ill-effects on local health and ecosystems. At every step, accountability is needed to verify that facilities are being shut, to check who pays, and to ensure that the health and the desires of those who live next to these sites are respected. This site offers tools for accountability in the decommissioning process.
Environmental Justice
Fossil fuels are incredibly toxic and dirty for humans, animals, plant life and ecosystems. Even after they stop producing, wells and infrastructure can leak gasses or brines that seep into the air, soil or water. Former oil and gas sites are often too polluted for regular uses, like residences or retail – although in California many times housing, shopping centers, golf courses and the like have been built on top of where oil wells once sat . Attention to environmental justice demands that the communities that live, work and play where decommissioning is happening participate in the process and are empowered to protect their health and wellbeing.
Emissions
Every year the UN Environmental Program tracks the gap between each national government’s pledges to reduce fossil fuels and what is needed to keep global warming under the 1.5 degrees Celsius – the limit agreed to in Paris 2015. In 2022 the UN found that only “urgent system-wide transformation can deliver the enormous cuts needed to limit greenhouse gas emissions by 2030” . Decommissioning is obligatory to these efforts, and it must be done quickly, safely and effectively.
Only urgent system-wide transformation can deliver the enormous cuts needed to limit greenhouse gas emissions by 2030
Tracking New Wells
New oil and gas well drilling sites continue to be proposed. Historically legislation aiming to restrict environmental impacts of the fossil fuel industry and hold big oil companies accountable have followed major oil-related catastrophes. For example, public pressure for action followed a major off-shore oil spill in Santa Barbara in 1969, and in 1970 Congress passed the National Environmental Protection Act.
A similar series of events occurred 20 years later beginning with the Exxon-Valdez spill in 1989. Less than a year later the American Trader spill occurred in February 1990. Congress soon passed the Oil Pollution Act while California passed the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act. These sets of legislation aimed to hold companies liable for cleanup and to ensure equipment is in good working order.
The map on the left shows oil and gas wells that began drilling from 1970-2022.
20th Century Coastal Oil and Gas Development
Since the first oil well was drilled in California in 1896, extraction wells, refineries, storage and disposal facilities have become an ubiquitous element of the state's land- and seascapes. From various viewpoints in California, the prolificacy of the oil and gas extraction industry can be seen. In 1898 Summerland became the world's first offshore oil well platform. The pier seen in the leftmost image extended 1300 feet into the Pacific Ocean and is known as Treadwell Wharf and hosted numerous oil wells. Compare the 1898 view of Summerland Beach to how it looks today from Ortega Hill.
Oil and Gas Landscape Transformations
Environmental engineers work to restore the natural landscape when wells are decommissioned but often times infrastructural legacies remain. Use the slider to compare views of Summerland Beach from Ortega Hill in 1930 and 2022.
Wells in Residential Areas
Many of today's cities such as Los Angeles were built around the extraction, refinement, and commoditization of oil and gas. However, some of the earliest wells built in California were never properly decommissioned. Such wells may have been deconstructed but never plugged, and eventually their locations forgotten. Urban sprawl can lead to homes built on old oil fields. As a result, some communities may be impacted by contaminated ground water or exposed to other toxins.
The map on the left shows wells overlaid on an aerial photo taken over Inglewood in 1936 and Inglewood today. Move the slider to see how new homes were built on former oil fields. (Symbol colors: Green = Active Well, Yellow = Idle Well, Orange = Plugged Well)
Who Foots the Bill for Decommissioning?
Decommissioning is expensive, and costs can be higher if the wells are remote or in delicate terrain, or if the wells have been idle or abandoned for a long time.The cost of decommissioning a single well is estimated at US$68,000, but it can rise to as much as US$391,000. The California Council on Science and Technology (CCST) further estimated that the total cost of plugging all active and idle wells in the state is $9 billion, with $500 million needed to plug just wells most likely to soon be decommissioned. Additionally, operators must pay an annual fee of US$150 for each well that has been idle for 3-8 years increasing to US$300 for each well idle for more than eight years and US$1,500 for wells that have remained idle for more than 20 years.
Historically the state imposed on each operator a different bond in exchange for their operating license. These bonds are like a decommissioning fund the state can use to plug each well; but the CCST estimates that “in almost all cases these [bonds] are substantially lower than the predicted costs”. Moreover, if the operator goes bankrupt, the state is liable. Recently, state legislatures have taken steps to increase and standardize bond amounts. And this information covers only gas and oil wells, not other necessary infrastructure like pipelines and refineries which are subject to different regulations and processes.
How Big Oil Escapes Liability
Idle and active oil wells have serious health implications for communities living nearby. While operators are responsible for paying fees for idle wells, those fees may be much less than the cost of decommissioning a single well. In 2020 more than 350,000 Californians were living within 600 feet of an unplugged oil well. Oil companies face both financial liabilities and have an ethical obligation to deal with orphaned wells.
Companies have given the state only $110 million to clean up the state's onshore oil and gas wells, the [CCST] found. In actuality, it could cost roughly $6 billion for that cleanup.
California Crude Oil First Purchase Price 1980-2022
In 2022 the price of oil reached a 10-year high , suggesting that now is perhaps the most lucrative time to drill for oil. However, the financial liabilities associated with existing infrastructure has prompted some oil companies like Shell and ExxonMobil to sell subsidiaries that operate oil wells in California. The sell-off of oil subsidiaries releases big oil companies from liability while making no tangible progress towards decommissioning.
Decommissioning In Action
Rincon Island
Rincon Island is a platform at the end of a wooden pier off the central California coast. It hosted about 30 wells, drilled between the mid-1950s and 1970s. In its heyday 2,000 barrels of oil were pumped from Rincon daily.
But by the 2000s, production had fallen to less than 200 barrels per day, and the costs of upkeep didn’t justify production. Even replacing the wooden pier was too expensive for this operation.
Decommissioning advanced well by well: bleeding them to reduce pressure, updating pieces that are old and rusty so they can withstand the work, then layering fluids and concrete to plug each well.
Ironically, each well needs to be renovated to be almost production-ready to ensure it can be safely plugged; any residual pressure could cause an explosion. Special rigs and other equipment had to be brought in for this work.
Ownership of Rincon changed multiple times, and after the final bankruptcy the State of California took charge. It may have to pay as much as half the cost of decommissioning Rincon because a bond of only US$10 million existed for this platform and because of the bankruptcy.
Students of petroleum engineering usually don’t have courses on well decommissioning because they are trained to expand production, not reduce it. Experience in decommissioning is dispersed. For example, some of the professionals who worked to decommission Rincon had, in the 1990s, participated in closing four other offshore platforms.
The State Lands Commission spent three years plugging the wells and in fall 2022 got to work on environmental studies to evaluate what to do next with this former oil site.
Assessments and debates continue, with many local residents making a case for reusing the leftover infrastructure rather than removing it or transforming it into a reef for marine life.
Further Reading
Historic Imagery
You can view additional historic photos made available by TESSA Digital Collections of the Los Angeles Public Library
California Oil History
Click here to learn more about the development of California's oil industry. [under construction]
Oil Spills
Major oil spills make the headlines but a lot of smaller-scale spills that are no less catastrophic are quickly forgotten. Click here to learn more about spills in California. [under construction]