California’s Energy Transition from Oil State to Fossil Free: Introduction Part Three—Offshore Drilling

Part three of the introduction discusses California’s opposition to the Trump administration’s plan to promote offshore drilling.

California’s longstanding opposition to offshore drilling took on renewed urgency with the Trump administration’s plan to increase oil production on federal lands and in federal waters.  The plan would open the California coast to new drilling and with it reopen perhaps the most controversial issue in California’s history with oil since the Santa Barbara oil spill in 1969.

In March 2017, Trump issued Executive Order 13783, which directed federal agencies to ease regulations that “potentially burden the development or use of domestically produced energy resources” on federal lands.  A month later, Trump issued Executive Order 13795, which stated that it would be U.S. policy to encourage energy exploration and production on the Outer Continental Shelf, the areas of U.S. continental shelf beyond the jurisdictions of individual states.  The following year, the administration proposed a new five-year plan for drilling in the Outer Continental Shelf that proposed leases in the Pacific, Arctic, and Atlantic oceans.  Coastal states opposed the plan, and a court decision ruling that only Congress, and not the administration, can repeal a ban on drilling in the Arctic Ocean put the broader five-year plan on hold.  Although the prospect of new offshore drilling was diminished, the plan prompted new efforts at both the federal and state levels to ban offshore drilling in California waters.

On the day he took office, President Biden revoked both Trump’s executive orders on drilling, and the Department of the Interior suspended all new federal oil and gas leases for 60 days.  On January 27, 2021, Biden issued Executive Order 14008, which ordered a pause in new oil and gas leases on federal lands, including offshore.  California Senator Dianne Feinstein then introduced the West Coast Ocean Protection Act, which would ban new oil and gas leases in federal waters off the coast of California, Oregon, and Washington.  The bill, however, has not advanced out of the Senate Committee on Energy and Natural Resources.  In another attempt to slow offshore oil drilling, in May 2021, Democrats introduced federal legislation to prohibit new leasing for oil or gas exploration, development, or production offshore from San Diego to the northern border of San Luis Obispo County.  The bill has also not advanced out of committee.

While legislation has proven politically difficult, Biden’s moratorium also faces obstacles through several legal challenges. In June 2021, a U.S. District Court judge in Louisiana issued a preliminary injunction to block the suspension of new oil and gas leases on federal land and water, agreeing with the 13 states that challenged the suspension that the administration did not abide by the required administrative procedures in pausing the leases.  Similar to the case that put the Trump administration plan on hold, the ruling stated that only Congress has the authority to suspend oil and gas leasing.  The conflict over the legality of the suspension remains unresolved.

In November 2021, the Department of the Interior offered 80 million acres in the Gulf of Mexico and auctioned off more than 1.7 million acres in what was the largest offshore oil and gas lease sale in the U.S. history.  In defending the decision to offer the leases, Biden administration officials said they could have been held in contempt of court if they did not hold the auction.  In January 2022, before the leases became effective, a federal judge invalidated them based on a Trump administration environmental-impact determination that miscalculated greenhouse gas emissions from future oil and gas drilling in the Gulf of Mexico.

In February 2022, the Interior Department delayed future federal oil and gas lease sales after a federal judge in Louisiana prohibited the administration from using its “social cost of carbon” value in determining the impact of climate change on federal decision-making on permitting and regulatory issues.  The Biden administration had valued the social cost of carbon at $50 per ton of greenhouse gases, the value that was used during the Obama administration and that was higher than the $10 per ton value used by the Trump administration.  In March 2022, a court ruling temporarily restored the use of the measure, and the Biden administration said it would resume plans for oil and gas development on federal lands.  The Interior Department then said it would open roughly 144,000 acres up for lease on federal land at higher royalties.  The acreage was 80% lower than the original plan. In May 2022, the Biden administration canceled the planned auction of offshore drilling rights in two regions in the Gulf of Mexico and one in coast of Alaska.  The administration announced that it will propose a new five-year plan for offshore lease sales by June 30, 2022, when the current plan expires.

In June 2022, the U.S. 9th Circuit Court of Appeals ruled that the federal government must complete a full environmental review before approving permits for offshore oil drilling platforms. The decision prevents the Interior Department and other federal agencies from issuing permits for “well stimulation” through hydraulic fracturing until a complete environmental impact statement is issued “rather than the inadequate [environmental assessment] on which they had relied.” The decision is from a 2016 lawsuit brought by California, the California Coastal Commission, and environmental groups alleging that “federal agencies violated environmental laws when they authorized unconventional oil drilling methods on offshore platforms in the Pacific Outer Continental Shelf off the coast of California.”

While federal action faces difficulty, there has been more progress at the state level. In September 2018, Governor Jerry Brown signed into law SB 834 and AB 1775 to prohibit new construction of infrastructure related to oil and gas off the coast of California. Brown also signed AB 2864, which requires the California Coastal Commission or the San Francisco Bay Conservation and Development Commission to participate in damage assessment after an oil spill. In early 2022, California state senator Dave Min introduced SB 953, which would end all drilling in California state waters, including under existing leases.  The bill, introduced in response to the 2021 Orange County oil spill in which almost 25,000 gallons of crude oil leaked from a pipeline off the coast of Huntington Beach, passed out of the state Senate Committee on Natural Resources and Water in April 2022. It then failed to advance out of the Senate Appropriations Committee in May 2022 amid opposition from the oil industry and trade unions as well as concerns over the financial liability from terminating oil leases.

Part four of the introduction will discuss California’s recent battle with the Trump administration over the regulation of auto emissions.