Gov. Newsom’s Welcome Announcement on Oil Drilling Setbacks

UPDATE: In a stunning development, fueled by massive grassroots support countering oil industry opposition, SB 1137 passed the California Legislature on the last day of session.  The Senate vote was an overwhelming 25 to 10.  The bill will now advance to Governor Newsom's desk.  

Generally speaking, the last thing one expects during the frantic sausage-making at the close of a legislative session is a bold and sensible new proposal to rally behind.  But that is exactly what we have in Governor Newsom’s unexpected but welcome call for a bill establishing a 3,200-foot health and safety setback around both new and reworked existing wells. That bill, SB 1137,  now being introduced by Senators Limon and Gonzales.

To back up a little, community and environmental advocates for years decried, rightfully, California’s complete lack of any state law requiring that oil well drilling be kept at a distance from places where people live, work, and go to school.  While there were sometimes local zoning regulations in place, as far as state law is concerned, you can pretty much drill your oil well next to a day care center fence, and let the toxic air contaminants waft right on over.  While other oil producing states’ setbacks were generally not adequate to protect public health, they certainly put to lie the oil industry’s constant swooning onto the fainting couch about how California supposedly has the strictest regulation of oil drilling in the world.

So we were pretty happy back in October of last year when the California Energy Management Division (CalGEM) issued a draft regulation that would establish a setback of 3,200 feet, based on the recommendation of its team of health science consultants. It was exciting to see, since it was a deeper setback than the 2,500 feet we had been asking for as a minimum, and exceeded Colorado’s 2,000 feet – currently the largest statewide setback in the country.   

But there was one big problem we pointed out – which is that CalGEM’s proposed setback applied only to the drilling of new wells. A huge fraction of drilling permits that CalGEM issues, however, are for what is called “reworking” of wells – that is, redrilling on the site of existing well pads to enhance production or enable it to continue. So while the setback for new wells represented a good start, it would not help the millions of Californians living near existing drilling – which is being relentlessly prolonged and expanded through reworks. 

And that is the long story behind why we were so excited to see the Governor’s call for ambitious climate legislation and the draft version of proposed legislation, which calls for a halt on new and rework drilling within the 3,200-foot setback.  Specifically, SB 1137 states that commencing January 1, 2023, CalGEM “shall not approve any notice of intention” (loosely meaning a drilling application) within the 3,200-foot zone.  Full stop.  Any notice of intention, not just for new wells.    

The draft does allow CalGEM to authorize drilling if a court expressly orders it (for instance, in response to a lawsuit successfully alleging the withholding a permit for a particular authorization is an unconstitutional Fifth Amendment “taking” of property).  However, in such instance, the well driller will need to post a bond that actually covers the full cost of plugging the well and decommissioning attendant facilities, as opposed to the tiny and inadequate bonding amounts that well drillers can currently get away with posting.

The Governor’s proposal is already shaking up some politics as usual in Sacramento. While ordinarily the building trade unions (closely allied with the oil industry) march in lockstep in opposition to curbs on oil drilling, this time around there are cracks of daylight emerging between them.  The building trades’ collective lobby came out with an unsurprising hard no on the Governor’s whole package, but several individual unions (representing electrical, utility, pipe trades, and sheet metal workers) came out in favor of the package as a whole, even while characterizing the 3,200-foot setback as a bitter pill they would have to swallow to get it. The breakaway unions are simply recognizing the reality that climate action, handled right, can be an employment boon. 

We hope that with the governor’s urging, and the support of NRDC and numerous community and frontline groups throughout the state, the legislature will finally institute setbacks and protect Californians from the health risks of oil drilling.