Law to Limit Coastal Development of Oil and Gas Enacted

Law further limits oil and gas development along the California coast and authorizes the state’s coastal authority to seek scientific advice on offshore wind.

Governor Gavin Newsom signed into law SB 704, which further limits oil and gas development, refineries, and petrochemical facilities along the California coast by eliminating the “industrial override” provision in the California Coastal Act of 1976. The law also authorizes the California Coastal Commission to seek scientific advice on offshore wind.

Coastal Development and the “Industrial Override”

The California Coastal Act of 1976, which regulates development along the state’s coast, requires that coastal-dependent industrial facilities be encouraged to locate or expand within existing sites and be permitted reasonable long-term growth where consistent with the act. The Coastal Act includes an industrial “override” provision to authorize industrial development that is inconsistent with Coastal Act protections as long as certain basic requirements are met, including that any alternative location is infeasible or more environmentally damaging, to do otherwise would adversely affect the public welfare, and adverse environmental effects are mitigated to the maximum extent feasible.

This “industrial override” provision had the effect of permitting oil and gas development and new or expanded refineries or petrochemical facilities in the coastal zone, as oil and gas resources are primarily located in and adjacent to some of the state’s beaches and coastline and large refineries largely predate the Coastal Act.

SB 704 updates the law to require the Coastal Commission to review new oil and gas wells, refineries, and petrochemical facilities using the same Coastal Act development policies as other projects proposed in the coastal zone. Existing permits will remain in effect, and repair and maintenance of existing developments and facilities will remain part of the override.

Limiting Oil and Gas Development

SB 704 prohibits new or expanded oil and gas development from being considered a coastal-dependent industrial facility. It permits those developments only if they are found to be consistent with all applicable provisions of the California Coastal Act and certain conditions are met. The bill also authorizes the repair and maintenance of existing oil and gas facilities to be permitted in accordance with the requirements for coastal-dependent industrial facilities, but only if the repair or maintenance does not result in expansion of capacity of the facility, and if the existing statutory conditions are met.

The act also modifies the existing requirements for new or expanded oil                 facilities if all oilfield brines is reinjected into oil-producing zones unless the Geologic Energy Management Division of the Department of Conservation determines to do so would adversely affect production of the reservoirs and unless injection into other subsurface zones will reduce environmental risks. All oil produced offshore California must also be transported onshore by pipeline only.

Limiting Refineries or Petrochemical Facilities

SB 704 prohibits new or expanded refineries or petrochemical facilities from being permitted as coastal-dependent industrial facilities. It authorizes the permitting of those facilities only if they are found to be consistent with all applicable provisions of the act. The permitting of new or expanded refineries or petrochemical facilities not otherwise consistent with the act is allowed only if not permitting the development would adversely affect the public welfare.

The bill authorizes the repair and maintenance of existing refineries or petrochemical facilities as coastal-dependent industrial facilities only if specified conditions are met, including that there would be no expansion of capacity. The bill also authorizes the development of facilities for the purpose of producing low-carbon fuels at an existing refinery or petrochemical facility in accordance with the requirements for permitting coastal-dependent industrial facilities.

Offshore Wind

For offshore wind, SB 704 revises the legislative findings and declarations under the California Coastal Act to include provisions relating to offshore wind development and offshore wind energy generation facilities. More specifically, it finds and declares that existing ports, including the Humboldt Bay Harbor, Recreation, and Conservation District, should be encouraged to pursue development that contributes to the construction and deployment of offshore wind energy generation facilities.