American Oil and Gas Reporter - October 2020 - 18

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IndustryDigest
provide additional financial assurance,
based on BOEM's analysis of their
credit ratings, the financial strength of
co-owners, the value of the reserves
and other factors.
Further, BOEM says, under the
proposed rule BSEE would revise its
process for issuing decommissioning
orders to predecessor lessees and grant
holders when current lessees and grant
holders failed to fulfill their
decommissioning obligations.
BSEE says it would issue orders to
predecessors in reverse chronological
order unless certain circumstances
warranted pursuing all predecessors
simultaneously. The proposed rule also
would codify decommissioning
practices for right-of-use and easement
grant holders, and would require that a
party appealing any final
decommissioning decision or order
provide a surety bond, BSEE says.
The proposed rule may be found at
https://www.boem.gov/oil-gasenergy/risk-management/proposed-fina
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California Governor
Issues EO Taking Aim At
Production; Consumption
SACRAMENTO, CA.-The
California Independent Petroleum
Association is criticizing an executive
order issued by Governor Gavin
Newsome that goes after both the state's
oil supply and demand. According to
CIPA President Rock Zierman, EO N79-20 will hurt the state's economy,
consumers and environment.
"Let us be clear," Zierman said
shortly after Newsome signed the EO
on Sept. 23, "today's announcement to
curb in-state production of energy will
put thousands of workers in the
Central Valley, Los Angeles Basin and
Central Coast on the state's
overloaded unemployment program,
drive up energy costs when consumers
can least afford it, and hurt
California's fight to lower global
greenhouse gas emissions."
Citing climate change mitigation,

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18 THE AMERICAN OIL & GAS REPORTER

efforts to accelerate its transition to a
carbon-neutral future, and the health
and safety of California's
communities, the directives in EO N79-20 include a goal that all in-state
sales of new passenger cars, trucks
and off-road vehicles will be zeroemission by 2035, and set the same
goal for medium- and heavy-duty
vehicles by 2045.
Moreover, the EO says that, "To
support the transition away from fossil
fuels consistent with the goals
established in this order and California's
goal to achieve carbon neutrality by no
later than 2045, the California
Environmental Protection Agency and
the California Natural Resources
Agency, in consultation with other state,
local and federal agencies, shall
expedite regulatory processes to
repurpose and transition upstream and
downstream oil production facilities,
while supporting community
participation, labor standards, and
protection of public health, safety and
the environment. The agencies shall
report on progress and provide an action
plan, including necessary changes in
regulations, laws or resources, by July
15, 2021."
Among its other provisions, the EO
says the Department of Conservation's
Geologic Energy Management Division
is to:
· Propose a significantly
strengthened, science-based health and
safety draft rule that protects
communities and workers from the
impacts of oil extraction activities by
Dec. 31, 2020, and
· Post on its website a draft rule at
least 60 days before submitting it to the
Office of Administrative Law.
Zierman points out that California's
oil production has been declining for
years, while its volume of crude imports
has skyrocketed. As a result, he says,
Californians buy more oil produced in
places without the state's strict
environmental standards.
"Our member companies embrace
new and traditional energy sources
working together. A state as large as
California needs an all-of-the-above
energy portfolio," Zierman contends.
"Our industry is uniquely poised to
invest in technology such as carbon
capture and sequestration, which unlike
any other form of energy, can remove
carbon from the atmosphere and
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American Oil and Gas Reporter - October 2020

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