Public lands: oil, gas, and mineral leases.
The bill brings into effect several key changes related to the liability of lessees, assignees, and operators of leased lands. From January 1, 2020, those who assume control over a lease are held responsible for obligations including the plugging and abandonment of wells and the decommissioning of production facilities. These obligations include submitting a notarized affidavit of liability for decommissioning activities and starting the decommissioning process within a specified timeframe after lease termination. Failure to comply with these regulations introduces substantial penalties, highlighting the serious legal ramifications that accompany the management of these leases.
Assembly Bill No. 585, approved on July 30, 2019, amends certain sections of the Public Resources Code in relation to the management of public lands concerning oil, gas, and mineral leases. The bill introduces significant changes to the processes of assignment, transfer, and subletting of these leases by mandating that any such actions must be recorded with the county recorder. This new requirement aims to enhance the transparency of lease dealings and ensure that the State Lands Commission can monitor compliance effectively.
The sentiment surrounding AB 585 appears to be largely focused on improving regulatory compliance and environmental safeguards. Proponents argue that the stringent measures enforced by the bill are necessary for safeguarding public health and the environment by ensuring that decommissioning of oil and gas facilities is handled responsibly. Critics, however, may view the increased liability requirements as burdensome, particularly for smaller operators who may struggle to meet compliance demands.
One of the notable points of contention surrounding AB 585 relates to the implications of its provisions on existing leases and the responsibilities imposed on lessees. Stakeholders in the oil and gas sectors have expressed concerns about the potential financial impact of extending liability for decommissioning activities to new leaseholders, which could deter investment. Moreover, the imposition of criminal penalties for non-compliance raises questions about the balance between regulation and operational feasibility for energy producers.