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With California Oil Production at Risk, Referendum Gives Voters a Say

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Oil industry officials warn that, if enacted, it could hinder production and force California to look elsewhere for its supply. (Shutterstock)
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Next year, California voters will have a chance to decide whether new oil drilling regulations should take effect. Oil industry officials warn that, if enacted, it could hinder production and force California to look elsewhere for its supply.


Rock Zierman
Special to CalMatters

In 2024, Californians will vote on whether the state should continue producing oil under the world’s strongest environmental, health and labor laws or if California should increase its reliance on imported oil, which could come from other oil-rich countries.

The “Stop the Energy Shutdown” referendum collected nearly 1 million signatures in record time because many Californians don’t want to send their hard-earned money to foreign dictators who don’t share our values.

The Debate Over New Oil Drilling Regulations in California

We got to this point because Senate Bill 1137 was gutted and amended five days before the end of the 2022 legislative session. The new language instituted a prohibition of new or reworked oil wells within 3,200-feet from “sensitive receptors,” or structures. In most cases, the oil wells were operational long before the structures were built.

Legislators had already rejected a similar bill earlier in the session and a regulatory process on the issue was also underway.

The legislative process is there for a reason. It provides for public hearings so that experts and impacted groups can provide testimony, ask questions and offer solutions in a public forum. For example, an exhaustive review of government studies on the question of setbacks conducted by the city of Los Angeles concluded that there was “a lack of empirical evidence correlating oil and gas operations within the City of Los Angeles to widespread negative health impacts.”

The Impacts of Shutting Down Existing Oil Wells

California Independent Petroleum Association engineers found that SB 1137 would threaten 15,500 existing wells and prevent planned, new, in-state production. Yet, in the five-day legislative rush job, there wasn’t real discussion on gas price impacts, the loss of revenue for local communities, the financial impact to the 55,000 high-paid workers in the oil industry, or the additional oil tankers it would take, coming from overseas to meet current oil demand.

Last-minute gut-and-amend bills in the final hours aren’t the way to make good policy. When politicians jam through legislation like SB 1137, the people of California have the right to respond.

California already has oil well setbacks rules, and more than 20 local, county, state and federal agencies oversee every aspect of oil production in California.

California-produced oil is also the only crude in the world compliant with the state’s climate regulations. Our oil producers must follow the state’s greenhouse gas reduction programs and account for all emissions, but oil imports are entirely exempt from these regulations. Foreign countries don’t pay local taxes that fund police, fire, roads and schools, nor do they support local projects like affordable housing and higher education scholarships.

How much will gas prices increase if 15,500 existing California wells are shut down and the supply shifts to imported oil?

Nearly half of all electric cars in America are sold in California, yet petroleum demand has steadily increased over the past decade. In 2012, California’s petroleum demand was 598 million barrels. In 2019, it was 659 million.

How will we meet oil demand for the foreseeable future?

Even if California grounded every airplane and banned every combustion engine, we would still rely on every drop of in-state oil to produce the more than 6,000 petroleum-based everyday products our residents depend on.

How can Californians drive their electric vehicles without the petroleum-based tires, car body shell, batteries or asphalt to drive on?

These critical questions should have been discussed when considering legislation of this magnitude.

Californians’ last barrel of oil should come from California, not from foreign dictators or countries who do not reflect our values. Voters will get to decide this question in November 2024, which is the very definition of democracy.

For years, activists have sought to restrict where oil production can take place in California, citing the health and environmental harm that disproportionately affects disadvantaged communities. The oil industry quickly responded after Gov. Gavin Newsom signed SB 1137 into law, collecting enough signatures to put a referendum on the 2024 ballot. Oil industry opponents argue that the law is not only popular and a growing practice among local governments, but Newsom has the power to act much sooner.

About the Author

Rock Zierman is the CEO of the California Independent Petroleum Association. CalMatters is a nonprofit, nonpartisan newsroom committed to explaining California policy and politics.

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