Chevron made billions last year. In 2023, Chevron reported profits of more than $21 billion and $26.3 billion in cash for shareholders, 18 percent higher than in 2022. “In 2023, we returned more cash to shareholders and produced more oil and natural gas than any year in the company’s history,” said Mike Wirth, Chevron’s chairman and chief executive officer.
But wait, there is a problem with Chevron. Chevron USA Inc., a subsidiary of Chevron Corp., currently operates 26,243 unplugged wells in California, the most of any oil company in the state. A total of 8,886 are idle, according to a Fractraker Alliance report. Chevron has the second-highest count of idle wells in California. The company reports “record profits” but ignores its obligations to plug and remediate idle wells in the state. Chevron claims to have plugged over 2,000 wells in 2022. but state records do not support the claim.
In 2022, Chevron only produced an average of about 3.1 barrels of oil per day (BOE/D) per well for their entire portfolio of unplugged wells in California, ranking them 78th among the 261 oil and gas companies operating in California. The company’s daily per-well production averages were around 15 percent lower than Aera Energy (ranked 68th) when Shell and Exxon sold Aera to divest from California oil and gas operations.
Chevron’s California operations perform at lower levels than those in other states. A good example is the acquisition of Denver-based Noble Energy in 2020 for $13 billion, which had a per-well production average volume of 14 BOE/D.
Zachary Norris, Greenpeace USA’s California Climate Campaign Director, pointed out that Chevron “drains our wallets, drills in our neighborhoods, and poisons our air” while contributing to climate change. “Chevron, headquartered in California, has contributed to a $10 billion mess of idle wells across the state, many in Black, Brown, Indigenous, immigrant, and low-income communities,” he said.
“Chevron needs to face its destructive legacy: stop drilling, start paying to clean up their mess, and fund the transition to a clean energy economy,” Norris said.
The Decline of California’s Oil Industry
A report by Carbon Tracker paints a dim future for the California oil and gas industry. For almost four decades, California’s oil and gas resources have declined. Onshore oil production in the state has decreased by 42 percent since 2014. California contributes only 2.7 percent of US crude oil and 0.4 percent of global production.
Around 39 percent of unplugged wells are idle, and the state’s reports show that almost half of those have been idle for over 15 years. The remaining wells produce near the point where they cannot operate profitably. New drilling has slowed, and the amount of actively producing wells decreased. Those unused wells need decommissioning, and while funds exist for that, the total is nowhere near enough. The report in 2023 indicated that only two drilling rigs were active in California.
“By nature, non-renewable resources deplete and eventually end, and these turn of events show that the time has arrived to plan for decommissioning in California.” Carbon Tracker
