Newsom Administration Takes On Big Oil For Real This Time

The California Geologic Energy Management Division, it seems, is no longer kidding around.  After years of bold pronouncements followed by tepid action, the Division finally put its foot down for real on Friday and denied 21 fracking permits that drilling behemoth Aera Energy had applied for.  

In the advocacy community, we’ve become conditioned to a bit of skepticism toward the administration’s proclamations about how it’s going to rein in California’s oil industry, and Really Mean It This Time.  In 2019, we were told that CalGEM would be promulgating a comprehensive public health rulemaking; as well as auditing its fracking permit program and putting a moratorium on high-pressure cyclic steaming to address a spate of spills. Well, we’re still waiting for that rulemaking, the cyclic steaming spills continue with spotty enforcement, and – until Friday – fracking permits continued to roll out the door at a fast clip.  Last year, Governor Newsom called on the legislature to ban fracking, but then did not engage to try to prevent the oil lobby from killing the ban in committee. The tough talk, until very recently, has not been fully matched by action.

So it’s a welcome turn of events that the administration is, at least on the fracking issue, now getting serious. A couple months after the defeat of the fracking ban bill, SB 467, administration officials are taking matters into their own hands.  The governor announced in April that CalGEM would ban fracking by 2024, with the announcement followed swiftly by a draft rule in May.  The happy shocker on Friday, though, is that the administration is not going to wait until 2024 to do what needs to be done – it is acting now, not later, to start to shut down the flow of these fracking permits.  No excuses, no delays, no dithering, it is simply taking action.

The action comes not a moment too soon.  We’ve known for quite awhile that fracking can contaminate the state’s dwindling groundwater reserves, not something we really want to be doing during a massive drought. And in recent years, studies have been rapidly rolling in with a resounding scientific consensus that living near fracking and other drilling operations poses a deadly risk to communities – prompting the ongoing call for the state to establish a setback buffer. 

The Governor has poked the oil industry bear, and the bear is not happy.  Aera’s statement on Friday went beyond the usual scare-nonsense about foreign oil dependence (news flash: the state is already mostly dependent on oil imports, and can solve that problem through California’s policies to cut consumption). This time around, there were rumblings about how the company is evaluating its legal options “to ensure the preservation of the [fracking] process as currently allowed by state law.”  The company is lashing out on the heels of already grim business news, with word having leaked recently that Shell is pulling out of Aera, which had been a partnership with Exxon Mobil.

If it turns out to be game on in the legal arena, someone will surely bring up the fact that the Governor made an offhand comment at a news conference last year that he didn’t have the authority to ban fracking. But in denying the permits, CalGEM pointed to the authority it does have for its decision, some of it put into place recently.  In the denial letter, CalGEM supervisor Uduak-Joe Ntuk pointed to both the statutory authority the Division has had since the 1970s to take whatever steps are necessary “to prevent, as far as possible, damage to life, health, property, and natural resources,” and to authority put in place by Senator Limon’s AB 1057 in 2019, defining the Division’s mission as including “protecting public health and safety and environmental quality, including reduction and mitigation of greenhouse gas emissions” associated with drilling.  Certainly, the fact that California’s crude oil is some of the most carbon intense in the world will help CalGEM to make its case if things come to that. 

Putting the kibosh on fracking permits is a great first step toward curbing the health damage being wrought by the state’s oil industry, as well as the damage to our climate efforts.  But as the Governor has recognized, more is needed – which is why when calling for the fracking ban back in April, he also instructed the California Air Resources Board to evaluate how phasing out all oil production in California as part of our state’s path to economy-wide carbon neutrality. Fracking is risky, and curbing it is important; but it is less prevalent in California than enhanced oil recovery practices such as cyclic steaming, which are hugely problematic in terms of both local impacts and carbon intensity. 

CalGEM’s moves to ban fracking are, in the largest sense, in the same bucket with Culver City’s welcome decision last month to phase out oil production in the Inglewood oil field.  For years, our state has been tiptoeing around the oil industry, talking timidly about maybe perhaps reforming it, but unwilling to actually take the bull by the horns and phase it out as we shift to a cleaner transportation system. The administration is heeding calls from communities and environmental advocates to get real about breaking up with oil, and we are glad of it.