(a) (1) Commencing July 1, 2022, the division shall begin requiring each operator of an oil or gas well to submit a report to the supervisor that demonstrates the operator’s total liability to plug and abandon all wells and to decommission all attendant production facilities, including any needed site remediation, pursuant to Section 3208 and Article 4.2 (commencing with Section 3250), as applicable, on a schedule determined by the supervisor.

(2) For purposes of paragraph (1), the supervisor shall set the schedule in a manner that staggers the initial reports by operators to ensure that some reporting commences on July 1, 2022, that at least one-half of required operators will have submitted their initial report by July 1, 2024, that all initial reporting is completed by July 1, 2026, and that followup reporting is required for each operator on a continual basis that is no less frequent than every five years after the initial report.

(b) The division shall develop criteria to be used by operators for estimating costs to plug and abandon wells and decommission attendant production facilities, including site remediation. The criteria shall include, but not be limited to, all of the following requirements:

(1) Operators shall calculate the estimated cost to plug and abandon each well and decommission attendant production facilities of the operator using the criteria developed by the division pursuant to this subdivision.

(2) For the site of each well, attendant production facility, or lease, the operator shall calculate the estimated cost of full site remediation using criteria developed by the division pursuant to this subdivision.

(3) Calculations of estimated costs under this subdivision shall be determined in accordance with generally accepted accounting principles issued by the Financial Accounting Standards Board.

(c) In preparing each report for the supervisor pursuant to subdivision (a), the operator shall do both of the following:

(1) Calculate cost estimates to plug and abandon wells and decommission attendant production facilities, including site remediation, using the criteria developed by the division pursuant to subdivision (b).

(2) Exclude from each initial report due on or before July 1, 2026, all offshore wells and facilities of the operator evaluated pursuant to Section 3205.6. Include in each followup report due after July 1, 2026, all offshore wells and facilities of the operator.

(d) If the supervisor determines that the operator has failed to use the requisite criteria or has otherwise provided estimates in the report that are neither credible nor accurate, the supervisor may request the operator to submit revised estimates for review and approval on a timely schedule to be determined by the supervisor. Failure to comply with this requirement or a request pursuant to this section is a violation of this chapter and is subject to any penalty provided by law, including, but not limited to, Sections 3236 and 3236.5.

(Amended by Stats. 2020, Ch. 370, Sec. 236. (SB 1371) Effective January 1, 2021.)