Oil giants sell thousands of California wells, raising worries about future liability for contamination.
In August, ExxonMobil’s annual meeting was overshadowed by news of its $50 billion California operations. Two months earlier, oil giant Chevron had announced a $1.2 billion expansion of its facilities in Santa Barbara and Ventura counties, about 20 miles south of Los Angeles. Since then, Exxon, Chevron, and other companies have announced plans to spend nearly $10 billion on new oil and gas wells in Ventura and San Diego counties.
Their plans have turned attention back to the question of how oil and gas companies should manage operations in California. What regulators should do to ensure the safety of the state’s water supply? How should they compensate the state if they are negligent? How should companies that do business in California and make major oil- and gas-related investments behave? How should the public health, social, and environmental consequences of oil and gas operations in California be addressed?
With no single industry or region producing more oil and gas in the United States, the answers to these questions can involve many players. Yet in recent years, a chorus of voices in both business and government have emphasized that oil and gas has to take on new responsibilities as California faces the twin challenges of energy independence and climate change.
In a state like California, where the industry is concentrated in just a few places and where some companies are already in the midst of large-scale projects in other states, this is a particularly challenging task. But it is an enormous one. Oil and gas are California’s lifeblood and, in recent years, are also its most visible and controversial industries.
In an unusual twist, environmentalists in California say they’re often the most vocal when it comes to issues related to oil companies’ handling of their operations in the state. They want to see the oil and gas industry be required to reduce its greenhouse gas emissions and to help compensate for the harms it endures as it grows and expands. They say it is their duty to ensure the safety of the state’s water supply and to ensure that local communities are not harmed by its impact on the environment.
The response from most oil and gas companies has been to dismiss these concerns. In California, the