Despite objections from some in his administration, California’s governor decided. Gavin Newsom signed legislation requiring oil and gas companies to allocate more money to plug wells that are nearing the end of production.

Under the new law, any company acquiring a gas or oil field in California must now secure a bond, a financial guarantee similar to insurance that covers the full cost of shutting in inactive or low-yielding wells.

As oil production continues to decline in California, the measure was intended to ensure that unproductive wells are properly sealed, preventing the release of dangerous chemicals and planet-warming gas.

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It. The new financial obligations were intended to provide a safety net for taxpayers in the event that oil and gas companies became insolvent and could not pay to plug wells.

But the bill, authored by Wendy Carrillo, met unexpected opposition from Newsom’s Treasury Department, which argued that the new bond requirements were too burdensome and could cause more energy companies to go bankrupt.

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Environmental advocates, including some who feared Newsom would veto the bill, applauded the governor’s decision to sign it into law as yet another crucial step toward holding oil companies accountable for more than a century of drilling and pollution.

This critical reform sends a clear message to the oil and gas industry: you must cover the costs of cleaning up and closing your old wells,” said Katelyn Roedner Sutter, California state director at the Environmental Defense Fund. “By updating oil industry laws For nearly a century, the bill will help protect taxpayers from the costs of cleaning up orphan wells while paving the way for a more just transition away from fossil fuels.”

The right-of-way bill was part of a litany of new environmental legislation that Newsom signed this weekend in hopes of protecting gated communities and moving California closer to its lofty climate goals.

Chief among these was SB 253, the landmark bill that would require major U.S. companies doing business in the Golden State to disclose their annual greenhouse gas emissions. This makes this the first requirement in the country.

The Climate Corporate Data Accountability Act, introduced by Senator Scott Wiener (D-San Francisco), will, among other things, require the California Air Resources Board to develop and adopt rules by 2025 that require companies operating in California with more than $1 billion of revenue annual revenue to reveal their carbon footprint across three scopes.

The requirements would apply to an estimated 5,400 companies, including Walmart, Apple, ExxonMobil and Chevron.

California lawmakers pass landmark greenhouse gas emissions disclosure law

This important policy once again demonstrates California’s continued leadership in bold responses to the climate crisis, turning information transparency into climate action, Newsom said in his signing message.

However, the governor added that the implementation deadlines were likely unattainable and the reporting protocols could result in inconsistent reporting between companies. To address these issues, he said his government will work with the authors of the bills and the legislature next year.

He also expressed concern about the financial impact on businesses and said he will direct the Air Resources Board to monitor cost impacts and make suggestions to streamline the program.

Supporters of SB 253 hope the bill will reach beyond state lines by forcing some of the world’s largest companies to disclose their emissions and encouraging other states to pass similar climate laws.

“Today marks a historic moment for corporate transparency, risk management and responsible investing,” Mindy Lubber, CEO and president of the nonprofit Ceres, said in a statement. A dangerously warming climate poses enormous risks to the economy and the well-being of both people. and the planet.

“Representing the fifth largest economy in the world, California policymakers have taken this challenge to heart,” continued Lubber, whose organization co-sponsored the bill. By adopting its new climate disclosure framework, the state will provide unprecedented, actionable, and economy-wide information to stakeholders across the country and around the world.

The law defines Scope 1 emissions as the direct greenhouse gas emissions of a company and its facilities. Scope 2 includes indirect emissions, such as electricity purchased by the company. Scope 3 covers emissions from the company’s supply chain, including waste, water use, business travel and employee commuting; it is responsible for around 75% of a company’s greenhouse gas emissions in many sectors

Other notable ones

environmental bills that Newsom signed into law:

AB 631 establishes new financial penalties for oil and gas companies that violate state law and allows state regulators to refer certain violations for prosecution.

SB 261 requires companies operating in California with annual revenues greater than $500 million to report on their climate-related financial risks every two years beginning in 2026. The law is expected to apply to more than 10,000 companies.

SB 272 will require local governments in coastal areas to develop and implement plans and adaptations for sea level rise over the next decade.

AB 579 sets a statewide goal to require all new school buses leased or purchased after 2035 to be zero-emission.

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SB 306 requires regular updates to the Extreme Heat Action Plan and better monitoring of progress toward its goals.