It could cost $21B to clean up California’s oil sites, study finds

https://www.propublica.org/article/cost-of-california-oil-cleanup-exceeds-industry-profits

by hedora • 3 years ago

155 156 3 years ago

propublica.org

ouid• 3 years ago

Seize their operations elsewhere?

gruez• 3 years ago

Getting a court ruling enforced in a foreign country is going to be very difficult.

toomuchtodo4• 3 years ago

Most global finance happens in NYC. California could also seize wells via eminent domain now to start remediating early, instead of allowing continued extraction and profit, with the end result still being leaving taxpayers on the hook after shareholders throw the carcass on the public tab.

They’re the fifth largest global economy, they can afford to litigate challenges until the heat death of O&G. Kill the businesses with forced liability for the costs to clean up their assets.

ckemere• 3 years ago

I'm sure each well is an LLC. Limiting liability through corporations is imhop the biggest problem with the current world....

thx-2718• 3 years ago

"Taxpayers will likely have to cover much of the difference to ensure wells are plugged and not left to leak brine, toxic chemicals and climate-warming methane."

Sounds like they've solved the problem already.

dclowd99013• 3 years ago

As it’s always been.

I cannot for the life of me figure out how we don’t have an amendment on the books that says “if you produce something in or from this country, you must see to its entire lifecycle”.

Just kidding, I know exactly why we don’t have such an amendment.

whitemary• 3 years ago

I know exactly why we don’t have such an amendment.

Why?

dopa42365• 3 years ago

amendment
a minor change or addition designed to improve a text, piece of legislation, etc.

What went wrong in the USA for that word to become a synonym for "fundamental right"?

Georgelemental• 3 years ago

Because such a rule would be far too vague (is, easy to subvert by special interests). Sometimes you have to do things the hard way, with long and detailed laws passed by legislatures and updated to account for technological developments.

vharuck• 3 years ago

When it comes to oil wells, Pennsylvania has a law for that: The Oil and Gas Act of 1984. A lot of wells are still just abandoned¹ by companies (in the usual ways companies shirk responsibility).

¹ https://stateimpact.npr.org/pennsylvania/2021/10/18/orphaned...

GolfPopper• 3 years ago

I'm starting to think this may be the Great Filter.

Get a system rolling that allows real costs to be ignored, then combine that with technological advancement that allows for planetary-scale damage and maybe it becomes inevitable that nascent Type I civilizations go back to banging rocks together, at best. It's the same result you get from an uncontrolled paper-clip maximizer, just with a lot more moving parts and flourishes.

thephyber2• 3 years ago

“allows real costs to be ignored” Economists call these negative externalities.

There are a handful of movies that involve the biggest tort litigations in the US: Erin Brockovich, Dark Water, A Civil Affair, the Rainmaker. It’s not clear that most of these businesses would exist if the actual cost of negative externalities was displayed on the accounting ledger with a dollar value.

brutusborn2• 3 years ago

I wonder if this is the reason for philosophical/religious shifts in history. Eg axial age ideas of loving your neighbour/all being one reduced conflict which allowed the social cohesion needed for large complex societies to be stable enough to survive.

I think we will need a similar shift in the modern age. Some religious/philosophical movement with a morality which makes waste and pollution sinful/shameful for environmental protection. I also think a ‘liturgical’ epistemological system is needed to reframe ‘truth’ and the value in reason. In this way absurd situations like ignoring externalities could be considered sinful rather than the status quo where most people do not care that these things don’t make sense.

This is kind of a reaction to hyper-individualism and cynicism, which I think is the reason for most modern problems. When people do not see themselves as part of a whole, they become their own god and stop caring about the commons. Apathy becomes the default.

TLDR: we need a cultural shift where people have greater respect for the environmental/intellectual commons

badnotation• 3 years ago

The great filter is birth rate. If we can't solve that, big trouble.

johnchristopher• 3 years ago

I'm starting to think this may be the Great Filter.

Oooh, nice ! I wish Baxter had added this idea in Manifold (hard scifi novels about "why are we alone in the universe ?" and other things.

For those who wonder what's an uncontrolled paper-clip maximizer https://en.wikipedia.org/wiki/Instrumental_convergence it's a thought experiment that illustrates instrumental convergence:

Instrumental convergence is the hypothetical tendency for most sufficiently intelligent beings (human and non-human) to pursue similar sub-goals, even if their ultimate goals are quite different.[1] More precisely, agents (beings with agency) may pursue instrumental goals—goals which are made in pursuit of some particular end, but are not the end goals themselves—without ceasing, provided that their ultimate (intrinsic) goals may never be fully satisfied.
Instrumental convergence posits that an intelligent agent with unbounded but apparently harmless goals can act in surprisingly harmful ways. For example, a computer with the sole, unconstrained goal of solving a difficult mathematics problem like the Riemann hypothesis could attempt to turn the entire Earth into one giant computer in an effort to increase its computational power so that it can succeed in its calculations.

https://en.wikipedia.org/wiki/Instrumental_convergence#Paper...

Suppose we have an AI whose only goal is to make as many paper clips as possible. The AI will realize quickly that it would be much better if there were no humans because humans might decide to switch it off. Because if humans do so, there would be fewer paper clips. Also, human bodies contain a lot of atoms that could be made into paper clips. The future that the AI would be trying to gear towards would be one in which there were a lot of paper clips but no humans.

Though I disagree: the AI in this analogy is mindless, it's up to the controlling entity with agency to stop it or program it to stop at some point. Just like we humans have agency and could decide to stop exploiting our planet's resources until we can do it without destroying it. How that decision is made and implemented is another debate.

kortilla3• 3 years ago

How accurate are these costs? This was commissioned by an anti-fossil fuel policy organization and despite taking some feedback from industry, they have a huge bias that perfectly aligns the incentives for them to grossly exaggerate the figures.

bcrosby95• 3 years ago

If you want to do it right, you probably want to take their figure and double it.

The gov will likely let them skate by though so yeah it'll cost them a buck fifty or something.

hedora5• 3 years ago

As journalists go, Propublica (and their data science team) is the gold standard for verifying such things before going to press.

readams2• 3 years ago

ProPublica definitely has a viewpoint though and I would not recommend treating them as neutral.

unmole2• 3 years ago

The same Propublica that decided to treat unrealized gains as income and then ran a plainly ludicrous story about how the rich were paying a true tax rate of 0.1%?

civilized3• 3 years ago

I used to think so, but they badly embarrassed themselves on a COVID origin story a few months ago. They relied on a single source who claimed to have unique expertise in translating ambiguous Chinese Communist Party language. Most commentators with knowledge of Chinese language and politics criticized his interpretations heavily. A decent review of the events is here: https://www.semafor.com/article/10/31/2022/pro-publica-scram...

This review is also very helpful for understanding the specific mistakes, and perhaps even bad faith misrepresentations, that their source made: https://fallows.substack.com/p/on-that-propublica-chinese-la...

In one particularly disturbing case, their translator stopped midway through a sentence, omitting the remaining half of the sentence which completely changes the interpretation.

ProPublica's editor note on the criticism said they asked for independent translations, but contains no support for their article except that the translators found their translation "plausible". The lack of detail is to me pretty telling. https://www.propublica.org/article/editors-note-a-review-of-...

kortilla3• 3 years ago

How would propublica verify this though without reproducing the research themselves?

All propublica would do (which is sadly “the gold standard”) is check that the research is sound based on what the researchers chose to publish.

Journalists very rarely catch lies by omission, especially when it’s a report that aligns with their preexisting biases.

hristov• 3 years ago

Of course they have an anti-fossil fuel industry bias because they write an article against the fossil fuel industry. One should listen to an unbiased source, i.e., a source that never writes anything against the fuel industry.

It would be great if we could hire an unbiased source to study the issue and determine what the cleanup costs of California oil production will be. But there is a danger that that unbiased source will determine that the cleanup costs will indeed be high and then they will immediately become a biased source, not to be believed ever again. And we will have wasted our money.

'That's some catch, that Catch-22,' he observed. 'It's the best there is,' Doc Daneeka agreed.

hef198985• 3 years ago

Oh, even better. Find a source with a strong pro-fossil fuel bias. And see what happens if their results show the same thing. Case in point, global warming and those oil industry internal reports showing global warming to be true, and man made, since the 70s.

coding123• 3 years ago

If that's the case then it was never worth doing it in the first place. However we would not be arguing about it on an internet if we hadn't. But the real question is where do we go from here.

tedunangst2• 3 years ago

No, there will always come a point where the cost to shutdown exceeds future profits. At some point, it will cost more to tear down a windmill than its future profits. Because that ignores all the profits before that point, which is why we're still building new ones.

throw0101b• 3 years ago

Old/orphaned wells are also a concern in Alberta ('the Texas of Canada'):

* https://www.cbc.ca/news/canada/calgary/andrew-leach-scotiaba...

* https://www.ctvnews.ca/business/documents-reveal-inside-look...

* https://macleans.ca/news/canada/bankrupt-oil-companies-are-s...

* https://en.wikipedia.org/wiki/Orphan_wells_in_Alberta,_Canad...

notjulianjaynes2• 3 years ago

They're also a concern in 'the Canada of Mexico'.

https://grist.org/abandoned-oil-gas-wells-permian-texas-new-...

katbyte3• 3 years ago

and the government that already subsidizes oil, is not subsidizing the cleanup by paying for it

MaxHoppersGhost3• 3 years ago

In the US? Please list some oil subsidies. The only real subsidies oil companies get are the ability to write off certain costs, mostly the capex related to drilling unproductive wells (“dry hole costs”). Hardly a subsidy.

1letterunixname2• 3 years ago

Superfund is supposed to cover pollution industry abandons. It has a track record of recouping 70% of costs.

Edit: Superfind site finder https://www.epa.gov/superfund/search-superfund-sites-where-y...

ftxbro• 3 years ago

is this what they mean when i hear about privatized profits and socialized costs

ars• 3 years ago

Serious question: Is it actually necessary to cap the wells? If you leave the machinery sitting on top of the well unused - does it leak anything?

Can you just leave it like that?

iancmceachern3• 3 years ago

Yes, many of these wells are under extremely high pressures and have more than oil in them (natural gas, methane, co2, etc). It's why you see the cliche scene of pil gushing out the top of a rig when they strike oil. It's not like a water well.

refurb3• 3 years ago

Most of the LA wells were tapped out long ago. None of them are gushing oil.

engineer_22• 3 years ago

It Will Cost More Than Total Future Production to Clean Up California Oil Sites

Title is misleading. Please change title to original.

Article says the cost to cleanup will be greater than the profit. This is not the total value to the economy, it is the rent extracted by the miners.

Since we all benefit from petroleum fuels, maybe it's wiser to compare cleanup vs total value instead of profit.

bombcar• 3 years ago

This is an important distinction, $1t in oil could be extracted, with only $10b profit, and the cleanup costs $15b. But the country received the benefit of $1t-15b.

ThrustVectoring• 3 years ago

The country also had to pay the $1t in your example. The actual proper analysis is to measure the difference in consumer surplus between the different points on the supply-and-demand curve hit with versus without the additional production.

imtringued6• 3 years ago

So you are saying oil companies are an arm of the government?

I don't know why but a lot of "blind capitalism" reeks of socialism with double standards. After all, if we followed this idea to its conclusion then the US should nationalize the oil industry. Except that isn't capitalism.

gsk222• 3 years ago

If you include the costs of pollution and climate change, I'm sure the "total value" of the extracted oil is well in the negative.

Either way, there is no reason to let companies off the hook for their negative impacts just because the product they produce has some societal benefit.

MaxHoppersGhost3• 3 years ago

If you include the costs of pollution and climate change, I'm sure the "total value" of the extracted oil is well in the negative.

This is absolutely not true. Oil and gas has lifted billions out of poverty and increased everyone’s quality of life hugely. Especially in “third world” countries where there are no affordable alternative energy sources.

hedora5• 3 years ago

I agree. I would also prefer the original, but I couldn’t make it fit.

dang• 3 years ago

Thanks, we've put the original title up there now.

Submitters: "Please use the original title, unless it is misleading or linkbait; don't editorialize." - https://news.ycombinator.com/newsguidelines.html

If you want to say what you think is important about an article, that's fine, but do it by adding a comment to the thread. Then your view will be on a level playing field with everyone else's: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...

imtringued6• 3 years ago

If the benefit of burning carbon exceeds the costs associated with burning carbon then people will burn CO2 and society will get wealthier.

If the costs exceed the benefits, then society will get wealthier simply from stopping self destructive behaviour.

Amazing right?

Except we don't charge the full cost of the negative externalities so oil companies cause a lot of damage because they are under the mistaken impression that their current extraction rates are useful to society.

The reason why we care about the negative externalities of fossil fuels is that they are most likely permanent but the benefit is temporary. So the cost benefit analysis tells us we are burning too much and this ends up harming us actually and it is just that we haven't experienced most of the harm yet.

friend_and_foe• 3 years ago

A "first of it's kind study" alongside a thumbnail tailor made to appeal to NIMBYs, literally an oil well across the street from a cookie cutter mcmansion. Do these publications even value their credibility anymore.

If it costs more to clean up it will probably be due to the nepotism and corruption with which such contracts are handed out. Maybe let the fossil fuels run from the wells long enough to cover the cost?

1letterunixname2• 3 years ago

There were and are oil pumpjacks right smack in the middle of some of LA's and Bakersfield's residential areas.

Placentia, Signal Hill, Arvin, Mid-Wilshire, Pico-Robertson, and on and on.

There's even a pump jack under "The Tower of Hope" at Beverly Hills High operating until 2017.

imgabe2• 3 years ago

Why compare the cost to the future profits of wells that are just about dried up?

How much profit have they generated up to this point and how does the profit it generated in the past compare to the future cleanup cost.

Obviously if the well is just about dry and about to be capped and cleaned up its future profit will be very little. Most of the profit will be in the past.

yencabulator2• 3 years ago

Why compare the cost to the future profits of wells that are just about dried up?

If future profits were more than the cost of cleanup, the company might even do the cleanup. Right now, it's pretty much guaranteed they won't (and nobody will go to jail for the this-should-be-a-crime, either).

imgabe2• 3 years ago

Just require the company to pay for it anyway, they can pay with the profits from the past 100 years of drilling oil, or levy a tax on the owners or use some of the taxes California collected over the past 100 years that the oil industry has boosted their economy.

It could cost $21B to clean up California’s oil sites, study finds

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