Budget Update: Legislature Restores CalGEM Enforcement Positions

by | Jun 29, 2020

In last week’s final budget, the Legislature restored key cuts for the Department of Conservation’s Geologic Energy Management (CalGEM) division, which regulates the drilling, operation, and permanent closure of energy resource wells.  CalGEM will now receive 25 positions costing $7.2 million in the following categories:

  • 10 positions to assess companies’ financial liability for idled and orphaned wells, an implementation of SB 551 (Jackson);
  • Four positions to strengthen companies’ financial assurance requirements for those wells, an implementation of AB 1057 (Limón);
  • Two positions to improve companies’ transparency surrounding natural gas leaks, an implementation of SB 463 (Stern);
  • Five positions tied to regulatory compliance and oversight;
  • Two positions tied to public outreach and data transparency;
  • Two positions tied to enforcement.
  • The cost of those 25 positions is $7.2 million in the 2020-21 budget year, the source said, followed by $4.5 million in 2021-22 and ongoing.

In January Newsom proposed to send, an extra 128 positions and $24.3 million to implement AB 1057 and other reforms over a three-year period.

But in a reversal last month, Newsom entirely withdrew the proposal — even though that boost wouldn’t have impacted the general fund as the state tries to dig itself out of a $54 billion deficit. The plan would have instead drawn from the Oil, Gas and Geothermal Administrative Fund that’s sourced from industry fees.

Despite Newsom’s reversal, the Legislature proposed going forward with his original plan, which would have provided 53 extra positions costing $13.9 million in the 2020-21 fiscal year.  In final negotiations, 25 positions were restored at a cost of  $7.2 million in the 2020-21 budget year, followed by $4.5 million in 2021-22 and ongoing, according to budget documents.

 

Jesus Arredondo

Jesus Arredondo

Jesus Arredondo is an Energy Industry Analyst and former State of California official.
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