7 On Your Side Investigation reveals massive price tag, challenges to plug LA County's zombie wells

LOS ANGELES (KABC) -- Southern California's long relationship with oil is starting to bubble to the surface once again as the state legislature and Governor move to strengthen local crackdowns on oil fields here.

Last month Gov. Gavin Newsom, standing with the Inglewood Oil Field in the background, signed legislation that promises to end drilling at that operation -- the largest urban oil field in the nation -- by the year 2030.

Newsom also signed bills that require oil companies to pay for properly plugging wells and that give California communities the authority to phase out oil drilling on their own.

That is good news for the Los Angeles City Council, which recently lost a court battle in trying to phase out drilling over a 20-year span. Los Angeles County was facing a similar court challenge, but California's new laws should allow both the city and county to move forward with their drilling phase-out plans.

Studies show how abandoned wells pose health risks

Several local studies have shown that oil wells can leak toxic chemicals into the air and water, which can be a problem when thousands of wells are mixed in with more than 12 million people.

"We have both methane, which is a greenhouse gas, as well as hydrogen sulfide, which is an odorant compound so it smells like rotten eggs and can irritate the respiratory system," said Dr. Jill Johnston, Associate Professor of Public Health at USC. "There's also benzene or toluene and we know these are both carcinogenic chemicals that can increase your risk for cancer."

Johnston is a key researcher in a study that took a look at the preponderance of health issues found in communities surrounding oil and gas drill sites. It's one of a slew of studies done over the past 10 years focusing on the wells in Southern California.

Johnston and her team set up a network of about 20 air monitors outside homes that surround drill sites. What they found is enough to take your breath away.

"Living closer to the site diminishes both your lung size and your lung capacity," she said.

The findings show that people who live in the areas nearest to oil wells are more likely to have a higher risk of suffering from heart and lung ailments.

And there are many wells in Southern California. Los Angeles County alone has an estimated 22,000 wells, about 3,700 considered to be idle. But even if they're not up and pumping, Johnston says they still could be leaking those dangerous chemicals. Her studies have also found that historically under-represented neighborhoods bare the brunt of oil well pollution.

"We see this narrative again and again in communities particularly in working-class and communities of color, where many facilities are allowed to pollute with very minimal oversight," she told Eyewitness News.

But identifying the wells is not easy.

Many of them don't sport the typical machinery; instead they look like a collection of pipes and tanks, often underground, hidden behind walls or disguised.

"There is an island off of Long Beach that has hundreds and hundreds of wells, and is designed to look like a resort from shore," said Adam Peltz of the Environmental Defense Fund. "They get calls every week asking how you can book a room there."

Too often the location of wells near densely populated neighborhoods is the result of poor government oversight, Johnston said.

"I think it's money and it's really land-use decisions that allow for these toxic operations to operate near schools and near homes with limited oversight. And that kind of dynamic can really put folks in harm's way," said Johnston.

But properly plugging the wells so that they no longer pose a health risk is expensive and has only been done to a fraction of idle wells.

WATCH: How much would it cost to plug California wells? Experts explain

That multibillion-dollar estimate would just be for plugging the wells. A Sierra Club study found that if the removal of infrastructure and buildings from each site is added to the cost, the price skyrockets.

Daunting financial cost to plug wells

"The issue of oil and gas will be with us forever because those wells will never go away," said Dan Dudak, a former executive for CalGEM, California's primary oil and gas regulator.

Dudak is now an environmental consultant along with former CalGEM inspector Chris McCullough. Plugging a well on average in California costs about $180,000, according to Dudak and McCullough, but can be prohibitively expensive in urban and offshore locations.

"We spent $1.2 million for two wells and they were only thousand-foot wells. They were very shallow," said McCullough.

How a well becomes orphaned

But don't expect the oil industry to foot the bill in many cases, environmental energy activists say because thousands of wells across California have no solvent owner who can be forced to pay for plugging and clean-up. They are what the industry calls "orphaned wells."

"There's around a million orphaned oil and gas wells across the United States," said Peltz.

As Dudak explained, wells end up deserted when they near being dry, are no longer turning a profit, and oil companies move them off their books by dumping them on smaller companies, which then dump them on even smaller companies.

"Until you get to a point where the smallest operator operating a particular lease who doesn't have a lot of capital will then essentially go bankrupt," he said.

And in most cases, that leaves taxpayers holding the bag.

"Experts have estimated that the cost of plugging wells -- just the cost of plugging -- could be $9 billion in the state of California," said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis.

That $9 billion estimate would just be for plugging the wells. A Sierra Club study found that if the removal of infrastructure and buildings from each site is added to the cost, the price skyrockets to $23 billion.

Williams-Derry points the finger at state regulators and elected officials, who he says for years have failed to make Big Oil set aside reasonable reserves for well cleanup before they can sell them off.

"Oil and gas companies should set aside money from the outset to pay for cleanup," Williams-Derry said. "For many companies, it's cheaper to delay... so they kick the can down the road and they keep kicking the can down the road. Eventually, sometimes they run out of road."

A spokesperson for the American Petroleum Institute, which represents the U.S. oil and gas industry, wrote in a prepared statement:

"The proper sealing of oil and natural gas wells is paramount to ensure safety, sustainability and environmental protection, and API and our member companies are committed to responsible development of our nation's energy resources from start to finish. API has established strong industry standards to advance the permanent closure and remediation of historic wells in accordance with applicable federal and state laws, and we support a sound policy framework for bonding and financial assurance to ensure operators can meet their decommissioning obligations."