CA SJR12

Urges the President and U.S. Congress to modify federal bankruptcy rules so that plug and abandonment and restoration obligations for oil and gas leases are treated as nondischargeable obligations.

Requests that bankruptcy rules prioritize environmental plug and abandonment and restoration obligations over all secured creditor claims in Chapter 7 and Chapter 11 liquidations and terminations of oil and gas leases.

Cites cases of Rincon Island Limited Partnership (2016) and Venoco, LLC (2017) where lessees avoided decommissioning obligations through bankruptcy, leaving California taxpayers responsible for over $150,000,000 in cleanup costs.

Notes that California has over 35,000 idle oil wells, many owned by companies that could use bankruptcy to avoid environmental remediation responsibilities.

References a 2019 Canadian Supreme Court decision that required bankruptcy debtors to comply with oil and gas abandonment obligations before distributing assets to creditors.