Fossil fuel industry drops California ballot measure that aimed to undo drilling regulations

LOS ANGELES, CA-SEPTEMBER 27, 2023:An active drilling oil field on Rockwood St. is located near Alliance Ted K. Tajima High School in Los Angeles. Assembly member Wendy Carillo is urging Gov. Gavin Newsom to sign a bill the would require oil and gas companies to put more money aside to ensure wells are plugged near the end of their productive life. The bill, AB1167, already passed the senate and assembly, but there is concern that Newsom will veto it because his Department of Finance has opposed the bill, arguing the measure's added financial obligations could create more orphaned oil wells. (Mel Melcon / Los Angeles Times)
A student walks past an active oil field near Alliance Ted K. Tajima High School in L.A.'s Westlake neighborhood last year. (Mel Melcon / Los Angeles Times)

After dedicating more than $25 million toward canvassing and political ads, California's oil and gas industry announced it will withdraw a hotly contested referendum from the November ballot that sought to remove restrictions on drilling near homes and schools.

The California Independent Petroleum Assn. announced this week that its members will abandon their expensive push to overturn Senate Bill 1137, a 2022 state law that would prevent drilling new oil and gas wells within 3,200 feet of homes, schools, parks and hospitals. Not long after its passage, oil and gas companies organized an effort to collect enough signatures to put the state law up for a vote in the Nov. 5 general election.

In recent months, however, the Petroleum Assn. acknowledged the referendum had not garnered sufficient levels of public support, according to its polling. It had also encountered a groundswell of resistance from a well-funded countercampaign that featured appearances from Gov. Gavin Newsom, former Gov. Arnold Schwarzenegger and Hollywood icon Jane Fonda.

And, in perhaps one of the final attempts to broker a compromise, Assemblyman Isaac Bryan (D-Los Angeles) said he recently took part in negotiations with the fossil fuel interests, declaring he would limit financial penalties in a separate bill if they pulled their ballot initiative.

The oil industry's decision to retract the proposition marks an unanticipated end to one of the state's most expensive political contests. In a state filled with more than 100,000 unplugged oil and gas wells, environmental advocates say that defending the setbacks law is essential to eventually phase out planet-warming fossil fuels and protect residents who live near the toxic fumes released by drill sites.

Nearly one-third of these wells are within 3,200 feet of homes, schools and other sensitive areas, exposing nearly 3 million people to cancer-causing pollution. In addition to restricting new drilling, the law would prohibit maintenance and redrilling, ensuring that old wells remain closed.

"It's a massive and historic win," said Kassie Siegel, senior counsel for the Center for Biological Diversity. "Victories like this don't come every day. The oil industry just backed down in total defeat."

Siegel painted the development as a last gasp for oil and gas production.

"This is an industry that's going away anyway," she said. "What the state needs to do is oversee this ongoing decline in a way that minimizes the additional damage that this dying industry does on its way out the door."

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But the state Petroleum Assn. didn't concede defeat — it vowed to fight California's well-capping law and similar legislation in court.

"Californians do not want to further increase our dependence on expensive foreign crude when California workers can create the energy locally under the strictest regulations in the world," said Jonathan Gregory, chairman of the California Independent Petroleum Assn. He added: "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."

Although the oil industry called the 3,200-foot setbacks "arbitrary," the distance was established by a 15-member panel of health experts convened by the Newsom administration. The panel concluded there was a strong association with higher rates of asthma, heart disease and adverse birth outcomes for people who live within that radius of oil and gas developments.

The law is expected to reap tremendous health benefits in Southern California, where some of the largest oil fields border densely populated communities. Enshrining those protections was critical to Bryan, whose district includes the Inglewood oilfield — the nation's largest urban oilfield that lies beneath Baldwin Hills, Culver City, Inglewood and Ladera Heights.

"I see that particular oil field completely being phased out over the next decade and a half," Bryan said. "And I think the health impacts for communities around it are going to be immeasurable — longer life expectancies, lower rates of heart conditions, lower rates of childhood asthma and the opportunity to live and thrive without the toxicity of these wells right next to homes."

To that end, Bryan said he leveraged Assembly Bill 2716 in negotiations with the oil and gas interests. The bill he co-authored would charge a $10,000 penalty for operating low-producing wells within 3,200 feet of sensitive sites. In negotiations, Bryan said that if the ballot measure was withdrawn he would revise AB 2716 so that the daily penalty would apply only to the Inglewood oil field.

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This story originally appeared in Los Angeles Times.