Oil Drilling Measures Rise to the Surface Again

William Fulton on
Mar 21, 2015

A couple of weeks ago, CP&DR reported on two land use measures on local ballots in California related to oil drilling one in Hermosa Beach that would have allowed it, which failed, and one in La Habra Heights that would have restricted it, which also failed.

We dutifully recorded it as a split decision, but I think the biggest news isn't how these ballot measures turned out. The biggest news is that oil drilling is back on the ballot in California at all.

The Santa Barbara oil spill was the event that birthed the modern environmental movement. But it's been 30 years since we've seen much ballot activity related to oil. 

Now that the fracking boom has hit California, local anti-oil activists are increasingly pushing to get fracking bans passed and place broader oil-related measures on local ballots. And it's clear that the oil industry is willing to spend enormous sums of money to try to influence these local elections.

The oil industry spent $400,000 on the La Habra Heights measure in an election that drew 1,800 voters. Last fall, the oil industry spent $7 million to successfully defeat a fracking ban in Santa Barbara County. (Bans in San Benito and Mendocino Counties passed.) In Hermosa Beach, pro-oil groups spent 10 times as much as anti-oil groups, even though the anti-oil side won. 

It's sometimes easy to forget that much of California's early wealth was based on oil. The state was the No. 1 oil-producing state in the nation, off and on, between 1900 and 1930. The state pumped 30% of the nation's oil in the 1920, setting up a speculation boom documented entertainingly in The Great Los Angeles Oil Swindle, written by San Francisco State historian Julies Tygiel. Los Angeles in particular was dotted with oil wells throughout the entire first half of the 20th Century. California oil fortunes have served as the basis for any number of books and movies; the Doheny oil fortune was fictionalized, for example, in both Raymond Chandler's novel The Big Sleep (Chandler worked in the oil industry during the "oil swindle" days depicted by Tygiel) and Paul Thomas Anderson's movie There Will Be Blood

Offshore oil production in the Santa Barbara Channel didn't begin until the 1950s, and only 15 years later the Santa Barbara oil spill triggered the modern environmental movement. No single event was more instrumental in the stimulating passage of CEQA.  

And it wasn't long before CEQA began to affect oil production in California. One of the earliest and most important CEQA cases cited in an appellate ruling I read today was No Oil Inc v. City of Los Angeles, 13 Cal.3d 68, decided in 1974. In a California Supreme Court ruling written by legendary Justice Matthew Tobriner, the No Oil case established two important principles under CEQA:

First, that a lead agency must make a determination under CEQA about a project's environmental impact before the agency can approve the project. No Oil's ruling in this regard was invoked as recently as February, when the Third District Court of Appeal ruled that the City of Sacramento did not violate this rule in approving a new downtown basketball arena. 

And second, it lowered the bar for when an environmental impact report should be prepared specifically, it established that an EIR should be prepared when there is "some substantial evidence that the project may have a significant effect". The court rejected the trial court's conclusion that an EIR should be prepared only when "there is a reasonable possibility that the project will have a momentous or important effect of a permanent or long enduring nature".

No Oil also helped launch the careers of a number of important environmental lawyers in California who worked on the case, including Mary Nichols (currently the chair of the Air Resources Board), Carlyle Hall, and Jan Chatten (now Jan Chatten-Brown). On the other side of the case, representing Occidential Petroleum, the team included Bela Lugosi Jr. 

California oil protection peaked in 1983 and declined steadily until last year, when it was up for the first time in 30 years. Subsequently public support for oil drilling in the state waned and environmental laws made it more expensive. Drilling continued apace in Kern County and, while tough regulation made it more expensive to build new oil facilities, the oil companies nevertheless found it worthwhile to expand and update the rigs and support facilities in the Santa Barbara Channel.

This increased interest in Channel drilling and the increased shipment of oil into California from other locations -- led to the next set of land-use ballot measures dealing with oil. In the 1980s, several coastal jurisdictions passed initiatives that banned the construction of onshore oil facilities, including San Francisco and Morro Bay. These measures were widely reported as part of the boom in ballot-box zoning at the time I'd provide a link to CP&DR's coverage back then but none of it is online and the courts blocked attempts by local jurisdictions to ban drilling in the neighboring waters. But the oil ballot measures died after about 1986 until last year.

The price of oil has dropped from $100 to $40 since last summer, so it's not clear whether California's latest oil boom will continue much longer. But given the fact that because of fracking and other reasons the United States is again the world's leading energy producer, it's likely that oil companies will continue to ramp up drilling in California. And given the fact that the state's policies are strongly anti-fossil fuel witness both the push to reduce greenhouse gas emissions and increase the use of alternative energy -- it's likely that localities around the state will continue to resist.