California’s oil industry has shifted its game plan to overturn a new state law banning new oil and gas wells near homes and schools, opting not to put an initiative on the fall ballot but instead pursuing a path to challenge the law in court.
The California Independent Petroleum Association (CIPA) had initiated a campaign to collect nearly 1 million signatures to place a referendum to counter Senate Bill 1137 on the November ballot. SB 1137 bars energy companies from drilling new oil or gas wells within 3,200 feet, or about 1 kilometer, from what the law’s supporters say are environmentally sensitive areas.
Jonathan Gregory, the CIPA chairman and CEO of RMX Resources, said in a statement emailed to the Southern California Record that during an initiative campaign, supporters of what he calls the state’s “energy shutdown” would be able to make questionable claims in the media and through paid advertisements.
Jonathan Gregory, CIPA chairman and CEO of RMX Resources
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“That’s why we are pivoting from the referendum to a legal strategy since it is a violation of the U.S. Constitution for the government to illegally take private property, particularly operations that were duly permitted by the government and all impacts mitigated,” Gregory said.
The new law, according to the CIPA, not only prevents new wells that are within 3,200 feet of residential areas and school campuses but also bars maintenance of existing energy projects. So the law may affect 15,000 wells across the state, according to the association.
Supporters of the new law argue that scientific studies have shown elevated risks of respiratory ailments and heart disease occur within about 1 kilometer of such wells, but CIPA challenges that contention.
“The state has not produced actual scientific studies that prove causation in California,” a CIPA news release states. “Instead, the state used a ‘Science Advisor Panel (SAP)’ that conducted a survey of studies, nearly all of which are from other states, most examine hydraulic fracturing which is not permitted in California, and not a single one calls for a 3,200-foot setback.”
In a typical initiative campaign, a measure needs to start out with more than 65% favorability in order to come out on top in a bruising political campaign, according to the CIPA. But a CIPA poll found SB 1137 with relatively strong public support – 49%.
“While CIPA is confident in its ability to be successful at the ballot box, we also recognize the likelihood of the Legislature simply introducing other similar bills, driven by the same unfounded narratives and lack of sound science,” the CIPA said in its June 26 news release. “Therefore, judicial intervention is necessary to truly resolve this matter.”
SB 1137 opponents also point to a state Appropriations Committee analysis of a previous setback bill showing it could cost up to $4 billion in lost state revenue and lead to legal challenge based on the takings clause of the U.S. Constitution.
CIPA points to polling data indicating that Californians favor highly regulated energy produced within the state over imported foreign oil.
“Polling has consistently shown that Californians would rather produce their energy locally under California’s strict environmental rules and regulations than increase our already troubling reliance on imported foreign crude from Saudi Arabia, Iraq and Ecuador,” the CIPA reported.
Current drilling projects in the state are subject to permitting, California Environmental Quality Act reviews and regular monitoring and inspections by the state Department of Conservation.
Gov. Gavin Newsom, however, defends the additional safety measures imposed by SB 1137.
“Big Oil knows that California is moving beyond fossil fuels, so on their way out these corporations are doing everything they can to squeeze out profits as they pollute our communities,” Newsom said last year. “We’re not standing for it.”