SACRAMENTO, Calif.— The California Assembly Natural Resources Committee today approved a bill that would push companies to clean up their old oil and gas wells instead of leaving taxpayers on the hook for cleanup costs.

The Oil Well Cleanup Accountability Act (A.B. 2461), introduced by Assemblymember Gregg Hart (D-Santa Barbara), would require any company that acquires control of an oil well to submit a bond or other financial assurance to cover the cost of cleanup. That way the state can rely on the bond instead of taxpayer funds to plug the well if the operator fails to honor its cleanup obligations. The bill advanced through the committee after a 10-4 vote.

“This commonsense bill is a win for the environment, public health and taxpayers. Californians have paid enough. It’s time for oil companies to clean up their own toxic mess,” said Hollin Kretzmann, a senior attorney at the Center for Biological Diversity’s Climate Law Institute. “Our tax dollars should be used to improve our quality of life, not subsidize the oil industry.”

Oil and gas wells need to be promptly cleaned up when they are no longer productive. When left unplugged, idle wells can leak methane and toxic chemicals like benzene and toluene into the air and water. Oil companies are legally obligated to plug their wells, but many sell them off to under-resourced companies who avoid well cleanup and could declare bankruptcy at a moments’ notice, or desert them once they are no longer profitable. The state is then forced to pay to clean them up.

“Oil companies have spent years shirking their cleanup responsibilities while maximizing their profits and leaving Californians with toxic air, dirty water, and a cleanup bill they never asked for,” said Victoria Rome, California government affairs director at Natural Resources Defense Council. “A.B. 2461 makes clear that the industry is responsible for its own mess.”

In 2023 the legislature sought to protect taxpayers by passing A.B. 1167, which requires oil companies that buy wells to submit bonds or other financial assurances to cover the full cost of well cleanup. Despite lawmakers’ objections, A.B.1167 has been applied narrowly, allowing oil companies to avoid the bonding requirements by using stock transfers. This exposed California taxpayers to billions in liabilities if the company fails to plug the wells.

The Oil Well Cleanup Accountability Act would require companies to submit a bond to cover end-of-life cleanup costs for all wells that transfer ownership, including through stock swaps. It would also eliminate A.B. 1167’s exemption for wells producing 15 barrels or 60,000 cubic feet of gas, per day. Most wells in California produce less than that, further evidence of the industry’s 40-year decline.

“Over 80,000 oil wells in California threaten our state’s precious groundwater; and methane, the most potent of all greenhouse gases, leaks from idle oil wells when they aren’t cleaned up,” said Laura Deehan, director at Environment California. “We can’t afford this pollution threat to our health, the environment or state coffers any longer.”

According to CalGEM, it can cost between $220,000 to $900,000 to plug and abandon a single well. California has more than 87,000 oil and gas wells that will eventually need to be cleaned up. The total cost of cleanup has been estimated at $21.5 billion. Yet oil and gas companies have only provided bonding for about $156 million — less than 1% of the cleanup costs.

Since 2023 California has spent $100 million in public funds to clean up wells deserted by oil and gas companies. Roughly $50 million came from the General Fund, money that should have been invested in other needs, such as education, public health, or other environmental protection. Another $165 million is expected from the federal government.

Wells that stay unplugged and idle can leach harmful, cancer-causing chemicals into the air and water. By one estimate, about two-thirds of idle unplugged oil and gas wells in California are also leaking methane, an explosive super-pollutant over 80 times more climate-heating than carbon dioxide over a 20 year period. At least 4,449 wells that are currently idle are near a school, childcare facility, eldercare center, park, playground or hospital, according to a Center for Biological Diversity analysis, putting California’s most vulnerable populations at risk.

The bill is sponsored by the Center for Biological Diversity, Environment California and NRDC, and is endorsed by more than 60 environmental and public health and labor organizations. It next goes to the Assembly Appropriations Committee and then to the full Assembly before moving on to the Senate.