The State of California has an substantial inventory of orphaned oil wells, and in some cases, these abandoned wells are causing obstacles for developers. The recent California Assembly bill 2729 is now imposing new requirements operators of these wells regarding the management and elimination of long-term idle wells. To find out more about this issue, we sat down with Steve Farkas, a principal in the energy, land Use and environmental law practice groups at Meyers Nave, to talk about the state's inventory of idle oil wells, how it is impacting developers and how the new assembly bill will have an impact.

GlobeSt.com: Set the stage for me a little bit here by telling me about the state's inventory of abandoned wells.

Steve Farkas: Oil production in California has been ongoing for over 100 years. In that time, hundreds of thousands of oil wells have been drilled by various types of well owners and/or operators, from individual homeowners to multinational corporations. Oil wells in California are classified into four categories; (1) An active well is currently producing product; (2) An idle well is currently not producing, but can theoretically restart production at any time; (3) An abandoned well is no longer in use and has undergone a procedure that plugs the well with cement, which is intended to serve as permanent closure of the well; and (4) An orphan well, whether idle or abandoned, is one for which there is no identified entity that has legal or financial responsibility for the status of the well.. Oil wells in California are regulated by the Division of Oil Gas and Geothermal Resources of the California Department of Conservation (DOGGR). According to DOGGR, there are records for about 250,000 wells in California, including 50,000 currently in production and 50,000 considered idle. In addition to regulatory oversight, DOGGR is responsible for the costs of properly abandoning orphan wells. Since 1977, DOGGR has plugged more than 1350 orphan wells at a cost of $27 million. Until recent legislative changes, discussed below, DOGGR was only authorized to spend $1 million a year on orphan well abandonments.