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U.S. District Judge Dena Coggins rejected a U.S. Department of Justice motion for a preliminary injunction against enforcement of SB 1137, a 2022 law that implements a 3,200-foot buffer zone, known as a setback, between oil wells and schools, homes, and playgrounds.

The ruling preserves one of California’s most consequential oil and gas restrictions and is a setback for the Trump administration’s broader effort to challenge state-level environmental restrictions on fossil fuel development.

SB 1137 prohibits the approval of new wells and restricts the reworking of existing wells within designated health protection zones surrounding residential areas, schools, and other sensitive sites. The oil industry has also challenged the law since it was passed, including initial efforts around a voter referendum on the law and lawsuits from oil producers and mineral owners.

Trump Administration Challenge

The challenge to the law is part of President Donald Trump’s policy, outlined in an April 2025 executive order, to stop the “overreach” from “burdensome and ideologically motivated ‘climate change’ or energy policies that threaten American energy dominance and our economic and national security.”

The Trump administration filed suit against the law in January 2026, arguing that the Mineral Leasing Act and the Federal Land and Policy Management Act preempts the law. The administration said the law would “knock out about one-third of all federally authorized oil and gas leases in California.”

The court found that the federal government had not demonstrated a likelihood of success on the merits of its preemption claim. The court concluded that SB 1137 is “a reasonable environmental regulation that does not preclude alternative methods of accessing the oil and gas within those locations and the vast majority of federal leased lands are not within 3,200 feet of sensitive receptors…”

The decision found that the law regulates development rather than land use. The court cited the U.S. Supreme Court’s decision in California Coastal Commission v. Granite Rock Co. to distinguish between permissible environmental regulation and impermissible land-use control. The court noted that conflict preemption occurs when “it is impossible to comply with both state and federal law.”

The court also rejected the federal government’s characterization of the law as a “de facto ban” on drilling. The court said this “characterization would apply to the 79 leases out of 616 (12.8%) that are located entirely within HPZ [health protection zone.” Those operators “are not prohibited from continuing to operate existing wells.”

The court further noted that the law does not prohibit access to oil and gas resources within those zones. Operators may still use alternative methods to reach subsurface reserves.

In addition, the ruling clarified that certain infrastructure, including production facilities, may still be permitted within buffer zones if approved through California’s regulatory process, including authorization from the state’s Geologic Energy Management Division (CalGEM).

The Justice Department argued that SB 1137 would reduce federal revenue by deterring leasing activity. The court found that argument unpersuasive, noting that the federal government had already paused its leasing program in California for roughly a decade and had not issued new leases during that period.

The court also found no evidence of irreparable harm that would justify emergency relief, a key requirement for granting a preliminary injunction.

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SB 982 would authorize the attorney general to bring a civil action against a party responsible for “climate-attributable damage” to pursue recovery of defined categories of climate-related losses. These include California FAIR Plan Association costs, certain state and local borrowing expenses, and insurance-related impacts on policyholders, where those costs are attributed to a past climate disaster. Money recovered from the suits would be deposited into a newly created “Climate Disaster Fund,” which would be used for specific uses.

The bill defines a “responsible party” as a firm with at least $500 million in market capitalization or annual worldwide revenue engaged in extracting, producing, or selling fossil fuel products with sufficient contacts in California.

SB 982 states that “climate disasters” have caused “destruction of homes and property, loss of wages, escalating insurance and rental costs, depletion of public resources, and injuries to Californians’ health, safety, and livelihoods.” The bill would hold a “responsible party” as “strictly liable” for financial harms caused by climate disasters, supplementing existing legal remedies.

The oil industry came out against the bill, with the Western States Petroleum Association (WSPA) releasing a statement:

“At a time when Governor Newsom, the California Energy Commission and the actual serious legislators are trying to retain the refineries remaining in California to protect consumers, Senator Scott Wiener’s proposal would wipe out all the hard work everyone has done collectively. This is a political stunt that will kill jobs and increase costs for consumers. If these legislators are serious about this issue, they should practice what they preach and walk between Sacramento and their districts.”

SB 982 differs from last year’s bill in that it narrows the potential parties subject to liability and revises the liability framework in response to concerns about retroactivity and causation.

Similar bills allowing state attorneys general to sue fossil fuel companies for damages from climate disasters have been introduced in Hawaii and New York.

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The Draft Supplemental Environmental Impact Statement (DSEIS) from the Bakersfield Field Office concluded that emissions from oil and gas development are “minor and are not expected to significantly affect regional air quality or public health.” The statement states that drilling will have minimal impacts on the area’s biological resources, soil, and water.

In June 2025, the BLM proposed the expanded oil and gas leasing and development and released a notice of intent to prepare a Draft Supplemental Environmental Impact Statement. The proposed area would include federal land in eastern Fresno, western Kern, Kings, Madera, San Luis Obispo, Santa Barbara, Tulare, and Ventura counties.

The proposed development expansion is part of President Donald Trump’s policy to “encourage energy production and exploration on federal lands and waters, including on the Outer Continental Shelf.”

The Bakersfield planning area encompasses approximately 400,000 acres of public land and 1.2 million acres of federal mineral estate across eight counties: Fresno, Kern, Kings, Madera, San Luis Obispo, Santa Barbara, Tulare, and Ventura. The office estimates that the Planning Area could see up to 400 new wells per year.

The office prepared the 2025 DSEIS in response to litigation challenging the adequacy of the 2019 Hydraulic Fracturing Final Supplemental EIS (FSEIS) and the 2020 Lease Sale Environmental Assessment (EA). Environmental groups argued that BLM did not adequately consider environmental harms.

In 2022, the U.S. District Courts for the Central and Eastern Districts of California approved stipulated settlement agreements. These agreements require BLM to prepare a new supplemental EIS and reconsider the 2014 Resource Management Plan’s (RMP) fluid minerals decisions, as well as to supplement the 2020 Lease Sale EA.

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SB 1137 implements a 3,200-foot buffer zone, known as a setback, between oil wells and schools, homes, and playgrounds. The buffer zone prevents new wells and the reworking and maintenance of existing wells. The legislation passed the law in 2022 and it took effect in June 2024.

The administration’s challenge to SB 1137 is part of President Donald Trump’s policy, outlined in an April 2025 executive order, to stop the “overreach” from “burdensome and ideologically motivated ‘climate change’ or energy policies that threaten American energy dominance and our economic and national security.”

Oil producers have fought against the law since its passage. A voter referendum on the law qualified for the November 2024 ballot, but the California Independent Petroleum Association (CIPA) withdrew the referendum to pursue legal challenges against the law instead.

In 2025, oil producers and mineral owners filed two lawsuits against SB 1137, arguing, among other issues, that it is an illegal public taking of private property without just compensation. These lawsuits are still proceeding in Los Angeles County Superior Court.

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The complaint states that 157 of the 581 unplugged wells in the Inglewood Oil Field are “idle” and 70 other wells are “exhausted.” These wells, the complaint alleges, “continue to emit toxins into the surrounding community and environment and to otherwise inflict the harms set forth in this Complaint.”

An idle well is one that has not been used for at least two years and has not yet been plugged and abandoned in a process that permanently seals the well. An exhausted well is an oil well that yields an average daily production equal to or less than two barrels of oil over the prior two years.

The complaint alleges that these companies have “profited from its oil and gas operations” without paying to retire the wells. “Defendants have left hundreds of unplugged, exhausted wells that harm the environment and the health of people living nearby and threaten to saddle taxpayers with an environmental cleanup bill that could total hundreds of millions of dollars,” the county alleges.

These companies “have unfairly and unjustly enriched themselves by refusing to properly decommission their exhausted wells, prioritizing their profits over responsibly operating” the oil field.

The county seeks injunctive relief to require Sentinel to plug the wells and pay for the harms caused by the pollution from the wells. It also seeks civil penalties of up to $2,500 per day for each well that is in violation of the law.

California’s Policy on Idle Wells

According to the California Geologic Energy Management Division (CalGEM), there are more than 37,000 known idle wells in California. These wells can leak hydrocarbons or other contaminants into underground drinking water or to the surface.

In addition to environmental and health concerns, idle wells pose a financial risk to the state if they are deserted by an insolvent operator. In this case, an idle well becomes an “orphan well,” and the state often takes the responsibilities and costs for decommissioning the well.

In 2023, Governor Gavin Newsom signed into law AB 1167, which requires individuals or companies to take greater upfront financial responsibility for plugging and abandoning wells. Under the law, the full cost of plugging and abandoning wells must be financially assured before CalGEM can approve the transfer of a well.

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“California has the most severe restrictions regulating the oil, refining, and fuels industries in the world,” the report states. The state’s energy policies and regulations “have led to the closure of two major refineries which now threaten essential pipelines that provide crude oil and fuel supplies to California’s surviving refineries, civilian markets, and military installations, as well as those in Arizona and Nevada,” it states.

The report argues that a “pending gasoline and aviation fuels crisis” comes as a result of “government policies and regulatory actions, as well as years of politicians demonizing refiners and producers as ‘price gougers’ without economic proof…”

Dependence on Foreign Imports

The report notes that California produces less than 23% of its own in-state petroleum needs and imports over 65% of its crude oil from foreign sources. “Rather than investing in its state’s resources and employment, California’s policies necessitate paying petrostates, such as Iraq and Saudi Arabia, over $60 million a day for crude oil imports,” the report states.

California will also be buying “non-U.S. foreign gasoline, some of which may be made from Iranian and Russian oil.” The report states that “as a direct result of its political and regulatory policies, California will be knowingly financing and, perhaps to some extent, aiding and abetting America’s potentially most menacing adversaries.”

Fuel for Military Installations

California has more than 50 military installations, the report notes, and supplies fuel to military bases in Nevada and Arizona, as those states are largely dependent on California gasoline.

The report concludes that the state, “through its history of legislative actions and the consequential implications leading to the loss of in-state oil production, pipeline capacities, and refinery losses, has demonstrated its incapability to recognize and inability to preserve the national security interests of the nation, as well as the economic interests of neighboring states, with respect to energy production.”

Call for Federal Intervention

The report outlines policy options “to mitigate the actions of California and protect the security interests of the U.S. as related to California as related to petroleum and refinery assets.”

These include the president declaring “California oil production pipelines, terminals, ports, refineries, and all related infrastructure as essential assets…” under the Defense Protection Act (DPA). The president could also provide temporary relief to California producers, operators, and refiners under the national Emergencies Act. Lastly, the report states that the president “may have constitutional powers for protecting California gasoline production and other petroleum assets, potentially through operation of the Supremacy Clause of the U.S. Constitution.”

The report concludes that “California and the nation can ill afford a self-engineered and created California gasoline and aviation fuel crisis. Both the economic and national security interests are profoundly influenced, and sadly, compromised by California’s political sentiment and legislative actions related to refinery operations and oil production.”

While the Santa Barbara County staff estimates that implementing the plan will take approximately three years, the actual transition period to phase out oil operations could take many years.

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Ordinance to Prohibit Drilling

In approving the first part of the phase out, the supervisors authorized county staff to develop an ordinance to prohibit drilling of new oil and gas wells. This would amend the Land Use Development Code (LUDC), Petroleum Code, and the Coastal Zoning Ordinance (CZO). The staff estimates that these amendments could be approved and adopted within six months. The California Coastal Commission, however, would need to review the amendments before they could become effective in the coastal zone. This review process could take an additional 9-15 months, according to county staff.

Phase Out Existing Operations

Additionally, the supervisors voted to authorize the county staff to begin sourcing an amortization study to determine an appropriate period to phase out existing oil and gas facilities and operations. The study will estimate how long it will take oil revenues to offset the investment by oil companies and their expected returns on investment.

After the amortization study is completed, county staff would develop the second ordinance amendments based on the findings of the study. The ordinances would include a timeline to shut down existing oil and gas facilities and operations as well as plugging and abandonment of these operations.

The staff estimates that the phaseout ordinance could be adopted within three years. This would include the amortization study, which would take approximately 9-12 months, as well as the ordinance amendments, environmental reviews, and public review and hearings.

Increasing Local Control

The move to end oil operations in Santa Barbara County comes after the September 2024 passage of AB 3233, which gave local governments control over oil and gas operations. The law authorizes local governments to regulate, limit, or prohibit oil and gas operations or development in their jurisdictions.

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While the impact of increased in-state oil production on refinery closures or gas prices is uncertain, the environmental opposition is based on incomplete accounting. Any discussion over expanding oil drilling in California must consider the state’s dependence on imported oil that is produced under weak environmental protections, contributes to the destruction of the Amazon Rainforest, and is shipped thousands of miles across the ocean. Oil from California’s main suppliers is produced with environmental protections that are weaker than California’s standards and total greenhouse gas (GHG) emissions that are higher than those associated with oil produced in the state. Increasing in-state oil drilling would reduce this dependence and lessen California’s global environmental impact.

California’s Dependance on Imported Oil

California’s in-state oil production has declined steadily since the 1980s, from a high of 393 million barrels in 1985 to 104 million barrels in 2024. Oil demand, while falling from a high of 708 million barrels in 1988, has been steady at more than 500 million barrels per year since 2021. Imports of foreign oil have made up the difference and have provided an increasing share of California’s oil supply to refineries, growing from below 10% in the early 1980s and mid-1990s to 56% in 2021, 59% in 2022, 61% in 2023, and 64% in 2024.

California’s oil imports come from nine countries, according to the California Energy Commission. The top sources in 2024 were Iraq at 21%, Brazil at 20%, Guyana at 16%, and Ecuador at 14%. None of these countries is known as a steward of the environment. Iraq ranks third in the world—behind Russia and Iran—in flaring natural gas, a process in which excess gas is burned during oil extraction. California’s other leading oil suppliers produce oil in the Amazon region, where deforestation from the exploitation of natural resources is a significant contributor to climate change.

Ecuador has a long history of Amazon oil production and related environmental degradation. Guyana, meanwhile, looks to become a growing producer in offshore oil in the Atlantic Ocean, along the so-called “Amazon coast.” Brazil, which currently produces oil in the Amazon, recently approved exploratory drilling near the mouth of the Amazon River.

Oil production in the Amazon looks to increase, as almost 20% of global reserves discovered during 2022 and 2024 are in the region. California, for its part, is the top consumer of crude oil from the region, as approximately 50% of all oil exported from the Amazon goes to California refineries, according to a California State Senate resolution.

The production process is only a part of the environmental impact from California’s dependance on oil imports. After extraction, the oil is shipped to the state by tanker, traveling thousands of miles for more than two weeks. Oil tankers produce a significant amount of GHG emission through the burning of heavy fuel oil and marine diesel, but the emissions from the journey are not tracked. The California Air Resources Board (CARB) tracks and reports emissions from ocean-going vessels within 100 nautical miles of its coastline only. The total emissions from shipping are significantly underestimated.

The California legislature has resisted efforts to account for the emissions and environmental impact of imported oil. State Senator Shannon Grove has repeatedly introduced legislation to monitor crude oil imports into California and publicly identify countries that have documented human rights abuses or environmental standards for oil production that are lower than California standards. The bills would also require CARB to publish an annual assessment of the GHG emissions associated with the transportation of oil from the point of origin to its point of destination in California. This would include both imported oil and oil produced in the state. Grove has been unable to advance these bills.

A More Comprehensive Approach

A more serious energy policy would require an accounting of the emissions and environmental impact of imported oil. It would recognize that, while demand might be falling, California will need a substantial supply of oil for a long time to come. Oil not produced in the state will be produced in foreign countries under weaker environmental standards and with much greater GHG emissions.

A serious energy transition policy would also recognize the need for the state to reduce exposure to oil-related geopolitical shocks on its economy and the need to maintain political support for its energy transition policies by making energy more affordable. It would also recognize the potential for tax revenue from oil production to fund energy infrastructure and the benefit of keeping a highly skilled oil workforce in the state.

Beyond simply increasing oil production in Kern County, SB 237 provides state leaders with an opportunity to take a holistic approach to energy policy, recognizing the continued need for oil and honestly assessing the global environmental impact of its overall oil policy. This approach, rather than pursuing international climate partnerships, would do more to fulfill California’s claims to be a global climate leader.

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The Kern County Board of Supervisors voted unanimously on June 26, 2025 to approve the third revi…

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The resolution, advanced on July 8, 2025, would commit the Senate to “investigating the impact of California’s role in the consumption of…

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The 2012 Memorandum of Understanding (MOU) between the Bureau of Land Management (BLM) and the California Geologic Energy Manage…

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The ordinance…

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The complaint, filed February 5, 2025, challenges the December 2024 approval of an additional 25 permit…

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