Oil and gas: bonding requirements.
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Majority
Fiscal committee
No
Appropriation
No
Current location
Appropriations
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill changes California’s rules for oil and gas wells to require stronger financial guarantees, specifically indemnity bonds, for companies that acquire or control wells. Currently, an exemption existed for wells producing over a certain amount of oil or gas. This bill eliminates that exemption, meaning all companies acquiring or controlling wells must now provide a bond to cover the costs of plugging, decommissioning, and site restoration. The bill also clarifies the definition of ‘acquiring a right to operate or control’ to include various transactions like stock sales and liquidations.
Key provisions
- Eliminates the exemption for wells with high production levels (15 barrels of oil or 60,000 cubic feet of natural gas).
- Requires all companies acquiring or controlling wells to file an indemnity bond to cover plugging, decommissioning, and site restoration costs.
- Expands the definition of ‘acquiring a right to operate or control’ to include stock sales, liquidations, and other transactions involving operators.
- Allows for blanket indemnity bonds for operators with multiple wells.
- Provides alternative financial assurances beyond bonds, such as irrevocable letters of credit or trust funds.
- Requires operators to notify the supervisor of any changes in well ownership or control.
- Mandates records of well transfers be maintained and made publicly available.
- Creates a new misdemeanor for violating bonding requirements.
Who is affected
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Sponsors
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1 on record
Primary sponsor
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