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Rep. Lowenthal (CA-47) introduces legislation to increase cost of oil and gas drilling on public land

Congressman Alan Lowenthal (CA-47), chairman of the House Natural Resources Committee’s Energy and Mineral Resources subcommittee, today introduced H.R.4346, the Bonding Reform and Taxpayer Protection Act of 2019, legislation that will significantly increase the amount of bond that oil and gas developers must post before being allowed to drill on public land leased from the federal government.

The bonds, required from companies before being allowed to develop leased public land, are held by the federal government as a guarantee that all wells are cleaned up (reclaimed) when no longer in use. The bonds are also used to clean up orphaned wells in the case of a development company going out of business before cleaning up operating wells.

The amount of bond required for different public land oil and gas leases has not been adjusted since the 1950s and 1960s. H.R.4346 will increase the bond amount for a single lease from $10,000 to $50,000; the amount for a set of leases in a single state from $25,000 to $250,000; and, the amount for multiple leases across multiple states from $150,000 to $1 million.

The updated levels reflect proposed new bond levels contained in a General Accounting Office report on the oil and gas bonding issue that is expected to be released to the public on Wednesday.

“Much to the pleasure of the oil and gas industry, bond amounts have been ignored for decades, resulting in levels today that are woefully inadequate to cover cleaning up the oil and gas wells they are supposed to cover,” Congressman Lowenthal said. “Inadequate bonds result in un-reclaimed wells, which can in turn lead to methane and other pollutants contaminating the air, soil, and water—which often have to be cleaned up on the taxpayer dime. The Bonding Reform and Taxpayer Protection Act will ensure that oil and gas companies, not taxpayers, pay for these reclamation costs.”

In addition to increased bonding levels, H.R.4346 also requires companies to develop and present a highly detailed reclamation plan to the Bureau of Land Management (BLM) before any development can occur on leased public land.

Congressman Alan Lowenthal represents the cities of Long Beach, Lakewood, Signal Hill, Avalon, Los Alamitos, Rossmoor, Cypress, Westminster, Garden Grove, Buena Park, Anaheim, Midway City and Stanton in California’s 47th Congressional District. The article above was released by Congressman Alan Lowenthal.