State legislators debate giving oil companies through 2031 to monitor wells for leaks 

California in 2022 enacted a law that banned new oil drilling within 3,200 feet of residential areas and required safety measures at existing wells, including leak detection and noise controls. The oil industry then launched a campaign to overturn it by collecting signatures to create a ballot measure. The industry, however, abruptly withdrew the ballot measure in June.

That meant the law must be enforced by state officials. But the Newsom administration on Wednesday proposed amendments to a budget trailer bill that would delay oil industry deadlines for various parts of the regulations, ranging from 12 to 54 months.

Stephen Benson, an assistant program budget manager with the state Department of Finance, told members of the Assembly Budget Committee on Thursday that agencies responsible for regulating oil operations as well as air pollution and water quality said they need more money and more staff to implement the new rules.

Benson said the proposed delays “were not being made for the benefit” of oil companies.

Some legislators aren’t happy with the proposal, SB 178, including the original law’s author, Lena A. Gonzalez, a Democrat from Long Beach, who said she would not vote for the bill in its current form.

“It is very frustrating,” she said. “There has been so much work put into this. We owe it to these communities to stick to our word.”

Gonzalez said the bill came as a surprise, adding that even if state agencies are understaffed, there was “plenty of time to figure this out.”

Assemblymember Rick Chavez Zbur, a Democrat from Los Angeles, also said “I’m not comfortable with the delay. It does seem like a benefit to the industry and a detriment to the public.”

Zbur and others on the budget committee questioned why changes to such a consequential energy policy were tacked on to a budget bill near the end of the legislative session. Zbur told CalMatters that the agencies had not yet made “a convincing case” they needed the extra time.

“This is an important bill that was a high priority for a lot of us,” Zbur said during the hearing. “The fact that it’s being delayed up to 54 months and goes through a budget trailer bill just seems inappropriate. These delays are about delays to the public health of people in our community.”

This year’s legislative session ends Aug. 31.

The law’s convoluted path has contributed to the fits and starts of its implementation. It has been fiercely opposed by the oil industry, which spent $20 million to gather signatures for the ballot measure.

Oil company executives say the setback law will eliminate jobs, drive up gas prices and increase California’s dependence on imported oil. Complying with the law will cost them about $40 million over the first two years, the industry estimates.

One of the law’s most critical mandates -- a plan to require companies to detect and fix leaks -- is supposed to be fully implemented on Jan. 1, 2027, under the law. The new deadline would be July 1, 2031.

“This is a major change -- doubling the amount of time industry has to comply with major health implications. It’s not just an adjustment,” said Kassie Siegel, director of the Climate Law Institute for the nonprofit environmental group Center for Biological Diversity.

“It’s indefensible. It is a huge gift to big oil, and we need our agencies to protect the public rather than big oil.”

The health risks of oil operations have been at the heart of a decades-long campaign to shield families, schoolchildren and the elderly from the impacts of drilling. Many air and water pollutants are linked to drilling and oil production, including fine airborne particles that can trigger heart and asthma attacks and volatile organic compounds like benzene, which is a carcinogen.

Growth of the oil and gas industry in many regions predated California’s sprawling growth, so it is not uncommon to find wells across the street from urban neighborhoods, including in Long Beach, Signal Hill, Los Angeles and Kern County.

The state regulatory agency, California Geologic Energy Management Division, known as CalGEM, has jurisdiction over more than 242,000 oil and gas wells, not all of them located within the buffer zones.

Benson from the finance department told the committee that the need for more time became clear after state agencies examined staffing and budget needs to implement the complex new rules. Requesting money through the normal budget process was not allowed for the 18 months the ballot proposition was still in play, he said.

The California Air Resources Board, for example, must conduct its own air sampling to identify pollutants and choose the best monitoring equipment.

“If (the air board) doesn’t have the time to do the rulemaking process correctly, then we are not going to get the right regulations,” Benson said.

Rock Zierman, chief executive officer of the California Independent Petroleum Association, said the delays made sense because the ballot proposition process paused the implementation, so a new starting point is necessary.

He pointed out that the law’s main focus, developing the setback requirement and prohibiting new wells or work on existing wells within the buffer zone, is already in place.

The law gave the state energy management agency the emergency rulemaking authority to protect public health while the full suite of new regulations were being devised and put in place. The agency immediately used that authority to require oil operators to provide an inventory of their operations and maps, which were to be completed by this time last year.

The agency subsequently gave operators a six-month extension; the proposed bill delays that again, to July 2025.

Siegel said it’s straightforward information that should be readily available to oil operators and shouldn’t require years to compile.

The state agency, CalGEM, referred questions about the bill to the Finance Department.

One new deadline in the bill is for curbing noise, light and pollution at oil and gas facilities. The law set a Jan. 1 2025 deadline; the budget bill would extend that 18 months to July of 2026.

“Those are relatively modest protections, but they are protections that people don’t have right now,” Siegel said.