Unplugged Californian Oil Wells Pose Risk to Canadian Pensioners

US-based environmental organisation Sierra Club’s new report has found oil and gas giants including Chevron, Exxon and Shell are failing to use their profits to close unused wells. According to the report, it would only cost the oil giants just 5% of 2022 profits to close inactive wells. Closing these inactive wells could create more than 24,000 jobs across the state, which Sierra Club said would benefit “communities of colour”. According to California state data, approximately 40% of the more than 100,000 onshore oil wells in the state are no longer productive. Aera Energy owns over 24% of California’s idle oil wells and could be responsible for up to US$1.8 billion for costs of clean-up and remediation. The company has been owned by ExxonMobil and Shell for a quarter of a century, but in February the Canada Pension Plan Investment Board (CPPIB) purchased a 49% stake. If California switched to a policy similar to states like West Virginia and Pennsylvania – where companies only have one year to keep their wells idle – Canadian pensioners could be on the hook for a large share of the costs of cleaning up Aera’s inventory, said Canadian charitable initiative Shift. CPPIB, which holds C$6 billion of investments in Alberta’s oil and gas industry, was recently criticised by Shift, after it said “blanket divestment” from investors in oil and gas was “counterproductive to achieving global net zero goals”. Adam Scott, Director at Shift, branded the post “tone-deaf” and “anti-science”. 

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