Alarmed by damage caused by a major oil spill off the coast of Huntington Beach in October, an Orange County legislature introduced legislation on Wednesday to end offshore oil production from oil rigs in California waters by 2024, a proposal which is sure to encounter fierce resistance and potential Legal challenges from the petroleum industry.
The legislation would affect 11 oil leases, all off the coasts of Orange and Ventura counties. It would also allow the State Lands Commission, the agency overseeing these contracts, to negotiate voluntary abandonment of leases by oil companies before the state takes action. The cost of buying out or rescinding those leases is unclear, although the size of the industry suggests the price could potentially cost the state tens of dollars if not hundreds of millions of dollars.
State Senator Dave Min (D-Irvine) said the measure was necessary to protect the California coast from another catastrophic oil spill similar to October’s that caused widespread environmental damage and led to beach closures that impacted the economy of Orange County coast communities . Offshore oil rigs and their aging infrastructure continue to pose a serious threat to the California coast, he said.
“I realize, and I think anyone looking at the status of these rigs realizes that this is a ticking time bomb,” Min said Wednesday. “They are asking for more and more spills, and we know this is just terrible for our coasts, for our coastal tourism economies and for our marine ecosystems.”
Miyoko Sakashita, ocean director at the Center for Biological Diversity, a nonprofit organization that works to protect endangered species, said in a statement Wednesday that “offshore drilling has polluted our beaches, poisoned our ocean and killed our wildlife.”
“It’s time to ban this dirty, dangerous and absolutely ruthless industry from our coastal waters,” she said.
Kevin Slagle, a spokesman for Western States Petroleum Assn., said the proposal would reduce California’s local oil supply and weigh on California taxpayers. Getting rid of the oil leases would amount to a government “cash” that would require compensation from those companies, he said.
“Elimination of existing offshore production will result in us importing even more energy from overseas sources and exposing California to significant claims-harvesting risk,” Slagle said.
Rich Venn, communications director for California Resources Corporation, which operates an offshore platform in state waters, said the oil and natural gas company was reviewing the proposed legislation, but noted that “the operation is profitable and early termination would require compensation.” .
“CRC is committed to producing energy in a safe and responsible manner to support and improve the quality of life for Californians and the local communities in which we live and operate,” said Venn.
The president of the State Building and Constructions Trades Council of California, a union representing oil workers and wielding enormous influence in Sacramento, also expressed concern about the potential impact of the legislation. Reducing local oil production could force the state to import more oil via tankers, putting even more strain on California’s already congested ports, Council President Andrew Meredith said.
“There is a constant barrage to shut down oil and gas production in California without a corresponding responsible plan to power our state,” he said. “Almost half of the oil coming out of the Amazon already comes to California. Should we really be tanking more oil to California and ramping up CO2 emissions while hundreds of tankers are idling in our ports waiting to be unloaded?”
Min vowed to introduce the law shortly after a submerged oil pipeline dumped an estimated 25,000 gallons into the ocean off Huntington Beach in October. The cause of the spill is still under investigation, but authorities believe a container ship’s anchor swept away and damaged the pipeline.
Min’s bill would not affect the 23 oil platforms in federal waters located beyond a three-mile buffer from shore, nor the pipelines that lead from those facilities to shore. These include the oil platform and pipeline involved in the recent oil spill. Oil wells operating on the man-made islands off Long Beach’s coast, which are owned by the city, would also not be affected by the legislation.
Min said his legislation would actually only affect three active oil rigs offshore Orange County operated by two lessees, California Resources Corp. and oil companies DCOR.
If passed, the law would require the State Lands Commission to terminate all existing oil and gas leases in state waters by December 31, 2023. Since this would be considered a government takeover since they are legal government leases, it would oblige the government to compensate the oil companies for the value of those holdings.
Those companies would still have to bear the costs of decommissioning those rigs, including covering all the wells, Min said.
Min did not provide an estimate of the cost to the state of shutting down those oil operations, saying they are still being evaluated, but he believes they would range from $25 million to $50 million per rig. He said that given the state’s projected budget surplus of $31 billion and an appropriate use of taxpayers’ money, given the threat offshore rigs pose to California’s $44 billion coastal economies, that’s a manageable cost.
During the recent Orange County oil spill legislative hearings, Jennifer Lucchesi, executive director of the State Lands Commission, said the 11 oil and gas leases in state waters were issued between 1938 and 1968. These leases have no end date and will continue for as long as it is “economic” for oil companies to continue production, she said.
Min and other lawmakers have raised concerns that the current operators of these offshore rigs could eventually abandon the platforms once the oil deposits are gone. If they do so and then file for bankruptcy protection, state taxpayers may have to bear the cost of removing the rigs, they said.
https://www.latimes.com/socal/daily-pilot/news/story/2022-02-09/huntington-beach-oil-spill-inspires-legislation-to-ban-california-offshore-drilling New laws would ban offshore drilling in California