State Will Now Pick Up Tab for Capping Leaking, Abandoned Oil Wells

SACRAMENTO —  Gov. George Deukmejian on Tuesday signed a bill authorizing the state to pay cleanup costs incurred when old, abandoned oil wells leak fluid or gases.

The bill, by state Sen. Marian Bergeson (R-Newport Beach), will mostly affect the cities of Newport Beach and Huntington Beach, both of which have many abandoned wells. Costs have been projected at about $40,000 annually, state officials said.

The legislation is in direct response to an explosion of an abandoned well in Newport Beach two years ago. The well had been capped for decades, and the operator was no longer around to assume responsibility for the cleanup.

“There was nobody to help out with the costs, and the city eventually had to spend almost $500,000,” said Robert Dixon, deputy utilities director for the city.

The bill stipulates that the oil and gas division of the state Conservation Department will assume any cleanup costs from leaking wells that have been abandoned at least 15 years, or if a leak is caused by anyone other than the well’s operator.

However, for wells that have been capped less than 15 years, the operator still would be responsible.

The legislation also requires developers or property owners to ask state officials to determine whether an abandoned well must be recapped before construction is allowed on the property.

If that is not done and the well later leaks or disperses gaseous fumes, the developer would be liable to pay for recapping costs.

An analysis submitted by the oil and gas division estimates that about two oil wells will need to be recapped each year at a cost of about $20,000 a well.

“This can get costly, and we’re very happy that the legislation was approved,” Dixon said.

Bergeson’s bill also establishes a $500,000 grant program that will aid cities in venting methane gas pockets, a problem that resulted in a fiery explosion in Los Angeles’ Wilshire district about two years ago. The explosion and the potential for others has since forced authorities to reconsider building the underground Metro Rail project through that area.

In order to quality for grant money, cities would be required to institute a zoning ordinance for areas that are susceptible to methane gas hazards, and also develop impact studies on any new construction in those areas.

Dixon said Newport Beach and Huntington Beach “have a big problem” with such pockets of marsh gas. He said Newport Beach currently is developing a project to install perforated pipe in the pockets to collect the gases and eventually burn off the excess.

“The old oil wells and the methane gas pockets pose a problem to both cities,” Dixon said. “The methane gases are low in concentration, but they cover a wide area and that’s a problem.”

Huntington Beach Fire Chief Ray Picard also said the phasing out of old wells had posed serious problems in his city over the past two decades. “This legislation will assist us tremendously, particularly with the abandoned oil projects in the area.”

Picard said Huntington Beach and Newport Beach are awaiting a report from a private company to determine the number, location and intensity of gas pockets in the two cities to “give us a better definition of the problem before we start any projects.”

Deukmejian on Tuesday also signed a bill in which the state will allocate a $110-million block grant to help California’s 58 counties augment their costs for state-mandated programs. Orange County is slated to receive $6.1 million of that grant.

The funds, which may be used at the county’s discretion, will be distributed by Nov. 30. A county’s share is determined by population and the amount it spends on state-mandated programs.

The legislation was sponsored by Sen. Jim Nielsen (R-Rohnert Park). Bergeson was among three Senate members who co-sponsored the bill in the upper house.

Deukmejian has until midnight today to sign or veto legislation enacted by the Legislature. The bills he does not sign will become law automatically.