Oil and gas companies in California will soon have to comply with stringent restrictions on drilling wells near homes, parks and many businesses, under a bill that won final passage.
California's Senate voted 25-10 this week in support of final passage of SB-1137 despite opposition from the state's oil and gas sector. It will now head to governor Gavin Newsom (D) to sign the bill, which will create first-time statewide setbacks for oil and gas operations that will become the most stringent in the US.
Newsom endorsed the drilling setbacks just weeks ago, as part of an effort to pass climate and environmental laws before California's legislature adjourns for the year. The state's legislature this week also voted to approve new clean electricity targets and a goal for the state to become carbon-neutral by 2045.
The setback bill will largely prohibit California regulators from approving applications to drill new wells and rework existing wells within 3,200 feet (1km) of "sensitive" areas such as schools, parks and homes starting on 1 January 2023. The buffer zone will be larger than a 2,000-foot setback that Colorado regulators approved nearly two years ago.
California oil industry groups fought the measure, which they said would cost jobs and further raise state gasoline prices that hit a record $6.27/USG for regular grade in June, according to the US Energy Information Administration. Oil industry groups say they have supported local setbacks based on science and data, but said SB-1137 went too far.
"A one-size-fits-all political mandate for the entire state does little to protect health and safety," the Western States Petroleum Association said.
California crude production averaged 369,000 b/d last year, down more than 30pc from a decade earlier. California refineries last year received 56pc of their crude supply from foreign sources, up from 29pc in 2001, according to the California Energy Commission.
The setbacks bill includes some exceptions. Oil and gas operators can drill within the 3,200-foot zone if a court finds being unable to do so would be an unconstitutional "taking" of property, but operators will have to post a bond to cover decommissioning costs. There is also an exception for plugging and cleaning up existing wells.
Oil and gas wells already inside the 3,200 buffer zone will have to follow new limits on sound, light, air emissions and leak detection starting on 1 January 2025. Operators of existing wells will also have to disclose new data on their facilities to state regulators starting on 1 January 2027.
Environmental groups said the setbacks will protect children and other vulnerable groups from hazardous air emissions and other risks posed by oil and gas facilities. The bill will also go further than a recent draft rule from California regulators that would create a 3,200-foot setback for new wells. That rule would not have applied to the "huge fraction of drilling permits" that go to reworking existing wells, whereas SB-1137 applies to new and existing wells, Natural Resources Defense Council senior attorney Ann Alexander said last week.
The bill will also go further than a recent draft rule from California regulators that would have created a 3,200-foot setback for new wells but not apply to the "huge fraction of drilling permits" that go to reworking existing wells, Natural Resources Defense Council senior attorney Ann Alexander said last week.
By Chris Knight
