Legislation threatening state oil and gas development operations and employment in related industries has been added to the job killer list.
SB 1137 (Lena Gonzalez; D-Long Beach), as amended on August 24, threatens to eliminate thousands of high-paying California jobs and force California to import even more foreign oil by politicizing and undermining the California Geologic Energy Management (CalGEM) Division’s ongoing regulatory process regarding new requirements near oil and gas extraction sites by predisposing what setback requirements should be before the agency even begins its analysis.
The bill proposes a 3,200-foot minimum setback, prohibiting oil and gas activities within a specified proximity of homes, schools, and parks, and pollution controls surrounding active oil wells. This policy completely undermines the Governor’s own three-year process to enact rules for health and safety around oil and gas extraction facilities.
SB 1137 threatens approximately 8,000 jobs, including 3,000 high-paying jobs in the oil and gas industry, and another 5,000 jobs in supplying industries such as construction and trades.
“The approach offered in SB 1137 will do nothing to reduce California’s oil and gas energy demands,” said CalChamber President and CEO Jennifer Barrera. “Instead, it will drive production out of California and force the state to rely on even more foreign oil imports that are produced in locations with less environmental protections than California.”
Arbitrary minimum setback requirements and pollution controls prescribed in the bill would affect 15,338 active and idle wells in California located within 3,200 feet of specified receptors in California. According to an Assembly Appropriations Committee analysis of a previous setback bill (also a job killer — AB 345; Muratsuchi; D-Torrance), the bill’s requirements could cost up to $4 billion in lost state revenue and subject the state to significant risk of legal liability under the takings clause of the U.S. Constitution.
AB 345 was similar to SB 1137 and was stopped by the Legislature in 2020.
According to the California Energy Commission, California is relying more on foreign oil than at any time since the agency started tracking it in 1982. In 2018, California imported 370 million barrels, or 57% of the state’s crude oil supply, from foreign nations like Saudi Arabia (37%), Colombia (13%), and Iraq (8%). By comparison, in 1992, California imported 33 million barrels, or just 5% of its supply.
Banning in-state oil and gas production naturally increases the state’s dependence on foreign oil regimes with abysmal environmental and human-rights records. This approach would have no effect on greenhouse gas (GHG) emissions, because it merely trades a reduction in California GHGs for GHGs emitted in less-environmentally protective foreign regimes.
CalGEM has a current process underway — where they have conducted seven local and virtual workshops across the State and received 45,000 public comments. The Governor and CalGEM have repeatedly said they want to rely on the best available science to determine any potential setback and ensure all stakeholders have input into the process.
This bill forces CalGEM to adopt arbitrary setback requirements, with very little legislative input, at the detriment of good jobs and California’s energy needs.
