California lawmakers kill plans to ban oil drilling in state-controlled waters

SACRAMENTO —  Facing fierce opposition from California’s powerful oil industry and trade unions, legislation to close down operations on three offshore oil rigs off the Orange County coast failed Thursday to win passage in a state Senate committee, seven months after a major spill fouled the beaches and wetlands around Huntington Beach.

Senate Bill 953 would have allowed the State Lands Commission to terminate offshore oil leases by the end of 2024 if the agency was unable to negotiate voluntary buyouts with the petroleum companies operating the oil platforms. The legislation focused solely on the three oil leases in state waters adjacent to Orange County, not the 23 oil rigs in federal waters along the rest of California’s coastline.

The measure was introduced by state Sen. Dave Min (D-Irvine) after an October oil spill off Huntington Beach dumped an estimated 25,000 gallons into the ocean. Investigators suspect it was caused by a cargo ship anchor that snagged a 17-mile-long pipeline stretching from an oil platform that operates in federal waters to the Port of Long Beach.

Min called offshore oil production a serious threat to California’s $44-billion-a-year coastal economy, as the October spill proved. Not only were beaches closed, hurting local restaurants and other businesses, but the spill forced the cancelation of the final day of a popular air show.

Min’s bill died Wednesday in the Senate Appropriations Committee, a gatekeeper panel that sifts through hundreds of bills and decides whether legislation with a fiscal cost to the state will advance to the full Senate. Min’s bill did not come up for a vote which, in effect, killed the measure the day before the deadline by which bills must move forward.

Afterward, Min said that he was “disappointed” with the outcome but will not give up.

“I will continue to explore all mechanisms and pathways to try to remove oil rigs off the coast of California,” Min said in a statement. “The aging infrastructure of these offshore platforms means they are ticking time bombs. Another oil spill — and all of the associated environmental and economic damage — is inevitable unless we act now.”

Min knew the bill faced serious perils, even in a Legislature dominated by Democrats and at a time with California as a national leader in pushing for a transition to a renewable energy-based economy and reducing the reliance on oil and gas.

A number of Senate Democrats earlier expressed concern about the potential financial liability the state faced if the oil leases were terminated, a price tag that could run into the hundreds of millions of dollars. Ending those leases also would likely be considered in the courts as a “taking” by the state, since the oil leases in question were legally obtained, and the matter could turn into an expensive battle in court.

State Sen. Susan Talamantes Eggman (D-Stockton) voted for the bill when it came before the Senate Natural Resources and Water Committee in April but at the time warned she might rescind her support if those issues were not resolved. She also balked at handing the task to the State Lands Commission, saying in her experience that “big bureaucracies don’t solve our problems.”

Environmental advocates said they will continue their efforts to eradicate offshore oil production from California’s coastline.

“Ending oil and gas lease sales is complicated but necessary,” said Victoria Rome, director of California government affairs for the Natural Resources Defense Council. “The current budget surplus gives us an opportunity to address this issue now while holding the polluters accountable. NRDC will continue to work to protect our coastline and marine ecosystems.”

Assemblymember Al Muratsuchi, a South Bay Democrat, blamed politically powerful trade worker unions for being one of the biggest impediments to the passage of critically needed health and safety restrictions on California’s billion-dollar oil industry. He said unions used their influence with Democratic lawmakers in 2020 to kill his bill that would have required setback distances between oil and gas wells and residential areas — and that the labor groups did the same years before with his bill to require the area’s major oil refineries to end the use of hazardous hydrofluoric acid.

“Labor is perhaps the biggest supporter of the Democratic Party and Democratic candidates,” Muratsuchi said in an interview in late April. “The public needs to know ... Why is it that deep blue state like California can’t pass more policies, more bills, to phase out fossil fuels?”

Opponents of SB 953 argued that ending the oil leases would not only have burdened California taxpayers but decreased California’s local oil supply at a time when gasoline prices are at record highs. Reducing local oil production also would require the state to import more oil by tanker ship and train, which also pose environmental risks.

“SB 953 was held because it didn’t work — it was going to cost the state billions of dollars for a symbolic victory,” said Andrew Meredith, president of the State Building and Construction Trades Council of California, a prominent labor organization that represents oil workers. “The California Senate is rightfully more concerned with actually improving the plight of workers and our environment than chasing headlines.”

Meredith said Muratsuchi’s criticisms were misguided.

“I can assure Mr. Muratsuchi that the strict environmental regulations and worker protections in California far exceed those in Saudi Arabia, the Amazon rainforest and even Russia — where he’d prefer California buy the oil and gas California is dependent on to power its 30 million cars and trucks, “ he said.

Min’s bill would have required the State Lands Commission to conduct an amortization study of the three oil and gas leases in state waters. The study would have included an estimate of the expected revenue from the leases and the expected costs the oil companies face in decommissioning the oil rigs — a requirement in the existing leases — including removing all structures, plugging wells and restoring the ocean floor.

There are 11 active oil and gas leases in state waters along the California coast, all of which were granted drilling rights between 1938 and 1968. During legislative hearings earlier this year on the Orange County oil spill, Jennifer Lucchesi, executive director of the State Lands Commission, said those leases have no end date and will continue as long as it is “economical” for the oil companies to continue production.