Bill To End Oil, Gas Drilling Off Coast of California Blocked in Senate Appropriations Cmte

A bill that would have ended oil and gas drilling off the coast of California later this decade was blocked in the Senate Appropriations Committee before a vote on Thursday, ending the effort the stop offshore drilling off California’s coast for at least another session.

Senate Bill 953, authored by Senator David Min (D-Costa Mesa), would have required the state to do an amortization study of oil and gas leases in state waters to determine both the market value of the leases and provide recommendations on how to phase off drilling offshore. SB 953 would have had that study completed by the end of 2023 and would have also immediately begun negotiations with oil and gas drilling leaseholders for an agreement to end their leases, and with it, their production. If no agreements were made by the end of 2024, SB 953 would have had the state terminate the leases and give the prices come up with during the study, similar to eminent domain payouts.

Senator Min wrote the bill in response to the number of environmental issues and incidents offshore drillers and lessees have been a part of in recent years, with the largest incident being the Orange County oil spill that occurred in October of last year. Since February, the Senator has continually defended SB 953. While he has espoused the environmental protection points, such as protecting the coast line and noting the high cost of oil spill cleanup, he has also been sure to note that ending off shore production would not contribute to any large rise in the price of oil.

“Those rigs are an omnipresent threat to what we all agree is a valuable, cherished coastline,” said Senator Min of his bill. “The bill would impact three oil rigs and won’t halt any oil drilling for at least a year and a half. We’re talking about a very, very small amount of oil. You can get rid of it, and it won’t affect oil prices even a cent.”

Environmental groups also quickly backed the bill, hoping to end oil spills and preserve California’s coastline.

“The only way to prevent more oil-related disasters like the one we experienced in October of 2021 is to transition off of fossil fuels as quickly as possible,” said Natural Resources Defense Council director of California Government Affairs Victoria Rome last month. “SB 953 allows for negotiations with the industry on how to voluntarily relinquish their state leases. If an agreement can’t be reached, the bill requires termination of those leases with fair compensation provided to the leaseholders.”

SB 953 blocked before Senate Appropriations Committee vote

However, many labor groups, oil and gas companies, and others worried about a loss of jobs and believing that the end of production would contribute to higher gas prices in California, as well as the decimation of a large industry in Southern California, brought significant opposition to the bill. Many fellow Democrats and Governor Newsom even remained silent on the bill due to the legal issues surrounding such a ban and the lack of any monetary figures tied to the bill.

“There were a lot of problems with SB 953,” explained Casey Seagram, a lawyer who monitors legal and political action surrounding offshore drilling, to the Globe on Thursday. “Those platforms and what is under them has a wildly different value to, say, an oil company than to the state. So prices alone would have been a legal headache for everyone involved. And that’s not getting into the nitty gritty. So it’s really a surprise that this wasn’t struck down sooner in the state legislature.”

While SB 953 passed the Senate Natural Resources and Water Committee last month, it proved to be a polarizing vote. It passed 5-2, but with 2 Senators abstaining. Earlier this month, it was placed on the suspension file in anticipation of a vote on the 19th. The continued concern, as well as an inflating projected price tag going into the billions of dollars and the bill refusing to go into what the final price could possibly be, scared many away, causing it to be held o the day of the vote.

“SB 953 was held because it didn’t work. It was going to cost the state billions of dollars for a symbolic victory,” explained president of the State Building and Construction Trades Council of California Andrew Meredith in a statement on Thursday. “The California Senate is rightfully more concerned with actually improving the plight of workers and our environment than chasing headlines.”

Senator Min, while upset at the loss, said that he was proud that a dialogue had been created and expressed hope for a ban in future sessions.

“I’m proud of the fact that SB 953 has jump-started an important and much-needed dialogue about how California can and must transition away from offshore oil extraction,” said Min. “The aging infrastructure of these offshore platforms means they are ticking time bombs. Another oil spill, and all of the associated environmental and economic damage, is inevitable unless we act now.”

If it had passed, SB 953 was widely expected to face a difficult vote in the Senate.