Activists see remediation work as key to ‘just transition’ away from local oil production | News
Gov. Gavin Newsom and other proponents of “managing the decline” of California’s Kern-centric oil industry have publicly acknowledged the process must be accompanied by a transition to new jobs comparable in number, pay and opportunity to oilfield employment — no small feat considering the field’s relatively high wages and overall low educational requirements.
A host of efforts is underway to identify a solution but so far no formal plan has come forward. Meanwhile, the burgeoning biofuels industry has demonstrated interest in stepping up, including in Kern, but environmental groups are divided on whether to support local production of fuels such as biodiesel and biomethane that can be carbon-negative but still produce emissions.
Its double impact is part of what environmental and environmental-justice groups like most about oilfield remediation and the more narrow field of well-plugging. Besides supporting employment — up to 9,000 jobs over a period of 10 years, by one estimate — these activities can prevent potential leaks from idle wells.
Another benefit is that it puts local oilfield skills to good use, which is something other renewable-energy jobs, many of them construction-related, don’t do.
State regulators have supported the idea of greater investment in well abandonments, and they note such activity is on the rise, but they say picking up the pace would require additional taxpayer money.
The industry’s view is multi-faceted: Well remediation is an obligation that puts people to work, but it’s also generally funded by ongoing oil production elsewhere. Also, it does nothing to make up for oil’s large property-tax contributions to the Kern County’s budget.
HARD TO DO
Although some oil producers have tried to position themselves to receive more well-mediation contracts from the state, there is a general resistance in the industry to cooperating with plans to wind down in-state oil production.
“It’s an easy thing to say but actually quite challenging to do,” Erik Bartsch, the president and CEO of Bakersfield-based oil producer Aera Energy LLC, said of calls for a “just transition” including well-remediation work.
Environmental and environmental-justice groups see the transition expanding beyond remediation work to also involve employment in renewable energy, which in Kern has tended to be construction-heavy.
Ingrid Brostrom, who has advocated for greater well-plugging work as assistant director of the Center for Race, Poverty & the Environment, said the community needs to move away from its perception of being dependent on oil production and instead prepare for the industry’s inevitable decline.
Because of price fluctuations, oil is not a dependable contributor of tax revenues anyway, she said by email.
NO ‘MAGIC BULLET’
“Oil well remediation is not the magic bullet to solve all of Kern County’s workforce and economic diversification needs,” she wrote. “It, however, can provide some immediate replacement jobs for fossil fuel workers that have (been) impacted by the state’s declining oil production.”
Brostrom also rejected the idea that biofuels could help replace lost oilfield employment, saying Kern shouldn’t invest in “yet another industry that is on its way out.” She also supported the Newsom administration’s proposal to spend $300 million on brownfield remediation, including of oilfields, that she asserted might open opportunities for affordable housing and workforce training.
A study released five years ago addressed the challenges of transitioning oil-intensive communities like Kern to a less carbon-intensive future.
Produced jointly by the Maryland-based Institute for Energy and Environmental Research and the Labor Network for Sustainability, also based in Maryland, the study concluded many workers in oil and gas will become unemployed, and their communities will be disrupted by the loss of tax revenues, unless preparations are made prior to the transition.
A community and worker-protection fund should be established ahead of time, it said, along with investments in job creation.
Gov. Newsom, during a visit to Kern in July 2019, spoke of the need to carry out a thoughtful transition away from petroleum production that “respects as well” the communities where oil is produced. He also set aside $1.5 million that year for a study on how to manage the decline of petroleum “in a way that is economically responsible and sustainable.” The multiagency report is expected to be released this summer.
The need for more well abandonment has been a topic in Sacramento for more than a decade. State oil regulators have insisted oil producers do more to address idle wells that, over time, raise the risk of leaking petroleum into water sources.
State Oil & Gas Supervisor Uduak-Joe Ntuk said by email the state’s primary oil-regulating agency, the California Geologic Energy Management Division, continues to seek opportunities for permanently abandoning deserted and orphan wells. He noted money to fund such work is key.
“Since 2015, CalGEM has expended nearly all its authorized funds for state abandonments,” Ntuk wrote. “As this work continues and more idle and orphan wells are identified, there will be demand for workers to complete this well work.” He added that the agency has identified about 5,000 deserted wells needing attention statewide.
CalGEM explained wells as “plugged” when cement or mechanical plugs are placed in a well and concrete is placed at different intervals within a well to protect petroleum reservoirs as well as public health and safety.
Oilfield remediation, it said, refers to cleaning up an entire production site, potentially involving plugging wells but also including things like removal of pipelines and soil cleanup.
Oil companies are required to post bonds guaranteeing their financial commitment to cleaning up wells that have reached the end of their productive life. But some environmental groups such as the Sierra Club say the industry’s bond requirements should be raised to ensure idle wells don’t sit too long.
A point sometimes made by California’s oil industry is that well-abandonment work is temporary and there’s already enough people doing that kind of work now. Trade groups say that, ultimately, well-abandonment won’t work financially if the industry is forced to wind down.
“The economics do not pencil out,” the California Independent Petroleum Association said by email.
“Where is the money to pay workers for putting a business out of business?”
Catherine Reheis-Boyd, president and CEO of the Western States Petroleum Association trade group, said by email the fact is that the oil industry will be around for decades to come.
“Policies that (would) permanently ban the lifelong careers people in our industry have earned and replace them with jobs that others in the community already have is not a ‘just transition,’” she wrote.
Gustavo Aguirre Jr., a Kern County project coordinator with the Central California Environmental Justice Network, said he doesn’t know exactly what the transition will look like but that the industry must reinvest capital to clean up the mess it has made and a financial model must be put forward.
“It really has to be something that is creative, that is innovative and somehow offsets (oil companies’) shareholders but is a better legacy environment for this community,” he said, adding that biofuels including renewable methane might be part of that.
Aguirre referred to stakeholder conversations taking place in Kern to build consensus on how to diversify or otherwise strengthen the county’s economy as oil’s profile fades as a dependable job engine.
One of these efforts is called Better Bakersfield & Boundless Kern (“B3K”); it’s a broad-based collaboration aimed at uncovering new economic opportunities that maximize existing local assets. Another effort with similar goals was recently funded that will involve Brostrom’s group, CRPE, and Bakersfield College working with other organizations to identify new potential job-generators.
Aguirre said the B3K, in particular, is promoting conversations and collaboration on the challenge ahead, “and that’s exactly where we need to be.”
Bartsch, the Aera executive, had a similar take. He said any “just transition” would need to be fair to all parties.
“We need rational voices to come together,” he said.
State Sen. Scott Wiener, D-San Francisco, was the co-author of a bill introduced this month, Senate Bill 467, that proposed to ban popular oilfield techniques and establish a new buffer zone between oil operations and sensitive sites like homes. It would also direct CalGEM to offer incentives to well-remediation contractors that prioritize hiring of laid-off oilfield workers.
Speaking during a webinar Tuesday about how the “just transition” might proceed, Wiener told participants it’s important that California as a liberal bastion not leave oil-reliant communities behind.
“It’s the message we send” that’s important, he said. “What happens in California eventually happens elsewhere.”
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