California's new law requires oil companies to secure funds to plug wells before acquiring them, but California Resources Corporation's merger with Aera Energy raises concerns about compliance.
Aaron Cantú reports for Capital & Main.
In short:
- California Resources Corporation plans to acquire Aera Energy but hasn't confirmed compliance with a law mandating funds to plug oil wells.
- The merger could leave taxpayers responsible for billions in cleanup costs if the law isn't enforced.
- California Resources Corporation previously filed for bankruptcy, raising concerns about its financial stability.
Key quote:
“It’s quite frustrating to those of us who have worked very hard to try and help California dig out of the colossal mess that it is in.”
— Ann Alexander, director of Energy Solutions, Nature, NRDC
Why this matters:
Unplugged wells can release toxic chemicals and greenhouse gases, contributing to air and water pollution and climate change. By ensuring that companies have the financial resources to plug these wells, California is attempting to safeguard its environment and public health. However, the sheer scale of the CRC-Aera merger complicates matters. Both companies have extensive portfolios of aging wells, and the financial burden of plugging them could be substantial.
