California Independent Petroleum Association (CIPA) and CalGEM held their monthly meeting on October 17, 2024, to discuss critical industry issues. CalGEM staff, including Oil and Gas Supervisor Doug Ito, alongside CIPA representatives and members, attended the meeting. Topics ranged from staffing and permitting to drone oversight, bonding, and regulations concerning idle wells.
Staffing and Supplemental Assessments
CIPA raised objections to CalGEM’s Notice to Operators (NTO) on their supplemental assessment to implement SB 1137, the 3,200-foot setback. The assessment will fund the hiring of 93 new staff, mostly at CalGEM, to oversee permitting within the setback. CIPA questioned the need for 93 additional people to perform less permitting. CalGEM agreed that sharing their priorities and administrative plans through a future presentation would enhance transparency. CalGEM announced the new Supplemental Assessment notice would be available through WellStar on October 25, with a 90-day deadline for operators to pay it.
CIPA noted that it would appreciate discussing CalGEM’s financial reconciliation process for end-of-year funding into the following year.
Drone Program Oversight
CIPA expressed appreciation for CalGEM’s new drone program protocol that would give operators two weeks to respond to CalGEM’s findings before notices are sent to sister agencies. CalGEM’s drone flyovers have produced a false-positive rate exceeding 90%. This new process will prevent false readings from being sent to other agencies. The protocol is a result of CIPA’s Drone subcommittee which has been meeting regularly with CalGEM staff regarding the program.
Permitting, IWMP, and Well Plugging
CIPA and CalGEM discussed regulatory developments around well plugging and abandonment (P&A), specifically addressing the complexities of transferring old waiver plans to the Idle Well Management Plan (IWMP).
CIPA’s P&A subcommittee had further discussions with CalGEM staff regarding what constitutes diligent effort to remove obstructions in idle wells being plugged as well as the definition of zonal isolation of oil barring zones.
CalGEM noted that inaccessible idle wells are exempt from fees under the IWMP. An NTO on the issue will be published soon. CalGEM will share the general tenants of the program and CIPA will be able to share its input with the department.
Witnessing and Bonding Issues
CalGEM updated CIPA on improvements for remote witnessing for well operations. While certain tests, like blowout preventer (BOP) inspections, require in-person witnessing, efforts are underway to expand remote witnessing options when appropriate. CalGEM also reported progress with bonding requirements, with two companies finalized and more nearing completion. The remaining companies that have not yet been contacted should expect to be in the first half of next year. CIPA has worked with CalGEM on methods of self-insurance such as asset retirement plans and securitization through valuable surface real estate in lieu of increased bonding which is not commercially available and does not lead to P&Aing idle wells.
CalGEM and CIPA also agreed to meet to discuss after-hours witnessing. There have been instances where CalGEM staff is unavailable and rigs have been left idle at well sites for entire weekends.