California postpones regulations for oil drilling

The California legislature is debating a last-minute proposal that would delay by more than four years the passage of new regulations requiring oil companies to monitor oil and gas wells near homes and schools for leaks.

More than 2.5 million Californians live within 3,200 feet of an oil or gas well, predominantly in low-income communities of color. Research has linked a number of health effects to proximity to wells, including higher rates of premature births and low birth weight babies.

California passed a law in 2022 that banned new oil drilling within 3,200 feet of residential areas and required safety measures at existing wells, including leak detection and noise abatement. The oil industry then launched a campaign to overturn the law by collecting signatures for a ballot bill. However, in June, the industry abruptly withdrew the ballot bill.

That means the law must be enforced by state authorities. But the Senate on Wednesday proposed extending deadlines for the oil industry for various parts of the regulations by 12 to 54 months.

Stephen Benson, deputy program budget manager at the California Department of Finance, told members of the Assembly Budget Committee on Thursday that agencies responsible for regulating oil production and air pollution and water quality said they need more money and more staff to implement the new rules.

Benson said the proposed delays would not be made to the benefit of the oil companies.

Some lawmakers are unhappy with SB 178. That includes the author of the original bill, Lena A. Gonzalez, a Democrat from Long Beach. She said she would not support the bill in its current form.

“It's very frustrating,” she said. “So much work has gone into this. We owe it to these communities to keep our word.”

Gonzalez said the bill came as a surprise, adding that even if state agencies were understaffed, they had “enough time to find a solution.”

Rep. Rick Chavez Zbur, a Democrat from Los Angeles, also said: “I am not happy with the delay. It seems to be an advantage for the industry and a disadvantage for the public.”

Zbur and other members of the Budget Committee questioned why changes to such an important energy policy were tacked on to a budget proposal so close to the end of the legislative session. Zbur told CalMatters that agencies had not yet made a “compelling case” that they needed the extra time.

“This is an important bill that has been a high priority for many of us,” Zbur said during the hearing. “The fact that it is being delayed for up to 54 months and going through a budget trailer bill just seems unreasonable. These delays are about delays with regard to the public health of the people in our community.”

This year's legislative period ends on August 31.

The bill's complicated path has contributed to its slow implementation. The oil industry has fought it fiercely, spending $20 million to collect signatures for the ballot bill.

Oil executives say the law will destroy jobs, drive up gasoline prices and increase California's dependence on imported oil. The industry estimates that complying with the law will cost them about $40 million in the first two years.

One of the law's key provisions – a plan requiring companies to identify and fix leaks – is set to be fully implemented by January 1, 2027, according to the law. The new deadline would be July 1, 2031.

“This is a big change – it doubles the time industry has to consider the serious health consequences. It's not just an adjustment,” said Kassie Siegel, director of the Climate Law Institute at the environmental nonprofit Center for Biological Diversity.

“This is indefensible. It is a huge gift to the oil industry and our authorities must protect the public, not the oil industry.”

The health risks of oil production have been the focus of a campaign for decades to protect families, schoolchildren and the elderly from the effects of drilling. Many air and water pollutants are associated with drilling and oil production, including fine air particles that can trigger heart and asthma attacks, and volatile organic compounds such as benzene, which is a carcinogen.

The growth of the oil and gas industry began in many regions before California's rapid growth, so it's not uncommon to see wells located across the street from urban neighborhoods, such as in Long Beach, Signal Hill, Los Angeles and Kern County.

The state regulator, the California Geologic Energy Management Division, known as CalGEM, is responsible for more than 242,000 oil and gas wells, not all of which lie within the buffer zones.

Treasury's Benson told the committee that the need for more time became clear after state agencies reviewed the staffing and budgetary needs to implement the complex new rules. During the 18 months that the ballot proposal is still under discussion, requests for money through the normal budget process will not be allowed, he said.

The California Air Resources Board, for example, must take its own air samples to identify pollutants and select the best monitoring equipment.

“If (the aviation authority) doesn't have the time to do the legislative process properly, then we're not going to get the right regulations,” Benson said.

Rock Zierman, board chairman of the California Independent Petroleum Association, said the delays made sense because implementation had been interrupted by the voting process and therefore a new starting point was needed.

He pointed out that the main focus of the law, namely the further development of distance rules and the prohibition of new wells or work on existing wells within the buffer zone, is already in place.

The law gave the State Energy Management Agency was given the authority to issue emergency regulations to protect public health while the full range of new regulations were drafted and implemented. The agency immediately used this authority to require oil operators to submit inventories of their operations and maps, which were supposed to be ready by this time last year.

The authority then granted the operators a six-month extension; the draft law postpones this deadline again, to July 2025.

Siegel said it is straightforward information that should be easily accessible to oil operators and should not take years to compile.

The state agency CalGEM referred questions about the bill to the Ministry of Finance.

A new deadline in the bill concerns the curbing of noise, light and pollution at oil and gas facilities. The bill set a deadline of January 1, 2025; the budget bill would extend that deadline by 18 months to July 2026.

“These are relatively modest protective measures, but they are protective measures that people do not currently have,” Siegel said.