But divesting late-life assets can be extremely risky. From Australia, Canada, NZ, Nigeria, Thailand, UK, US, these are egs of systemic failure. And they underscore the urgent need for stronger regulation – like financial assurance – to ensure O&G companies meet their legal clean-up obligations.

In many places around the world, oil and gas companies are legally required to decommission their assets when production ends. But few are required to save enough funds to pay for it. This can result in companies trying to offload their old assets, rather than paying for clean-up.

This net shortfall has risen by $3.2 billion in just three years, after it was last estimated at $15.2 billion in 2023. Refinery rent-seeking is costing Californians about $6bn each year ($59bn over the past decade) in higher gas prices, compared to other states.

Most companies are operating near/below their profitable limit, with only $2.1bn of future cash flow available to pay off all liabilities. Industry’s estimated future cash flows have halved in just 3 years, resulting in a net shortfall of $18.4bn assuming all future profit is spent on clean-up.

Rising decom costs and rapidly dwindling cash flows means taxpayers face a growing bill to clean up what the industry can’t afford to itself. Importantly, our research shows that the decline of CA's O&G is due to geology and economics, not state policy decisions - as has previously been asserted.