"The deal would place 40 percent of California’s idle wells in the hands of one operator. Campaigners warn this poses an “immense” risk to the state — which new rules could help to mitigate, depending on how regulators act."
"Last month, the California Resources Corporation (CRC), already the largest gas producer in the Golden State, announced a plan to get even bigger: It would acquire competitor Aera Energy, California’s second-largest oil producer behind Chevron. Both companies already operate thousands of extraction sites in California, and their successful merger would make CRC the state’s largest oil and gas producer by an overwhelming margin.
At a time when the U.S. oil and gas industry is rapidly consolidating in an effort to unlock new economies of scale, investors took the merger’s announcement as a positive development and CRC’s stock price jumped. But what has received much less attention so far is the fact that this merger likely will put to the test a new state law that aims to hold oil and gas producers accountable for idle wells, sites that haven’t been used for production for 24 consecutive months.
If successful, the merger would make CRC by far the state’s largest holder of idle oil and gas wells, which can pose ongoing environmental hazards, often continuing to leak methane and other pollutants like benzene and lead. Today, CRC and Aera are responsible for more than 15,000 of the state’s roughly 40,000 idle wells, according to data from California’s Geologic Energy Management Division (CalGEM). The merger would put California in uncharted territory, placing 40 percent of the state’s idle wells under the control of a single entity."
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