Newsom Signs Bill Giving Localities Right to Regulate Oil Operations
Governor Gavin Newsom signed into law AB 3233, which gives local governments control over oil and gas operations, including the authority to limit or ban oil production. The bill will allow counties to ban fracking or other extractive operations through ballot measures.
The law authorizes local governments to regulate, limit, or prohibit oil and gas operations or development in their jurisdictions. The limits or prohibitions can cover methods of oil and gas operations or development and the locations of oil and gas operations or development. The regulations or limits can also be stricter than state laws or regulations.
The Geologic Energy Management Division (CalGEM) has jurisdiction over oil and gas development in California and up to three miles offshore. The jurisdictional powers of a local government vary, and some jurisdictions have passed ordinances or local ballot measures to confirm their authority.
California State Law and Supreme Court Decision
The bill overrides a Supreme Court ruling and state law prohibiting localities from regulating oil activities in their jurisdictions. In August 2023, in Chevron U.S.A. Inc. v. County of Monterey, the California Supreme Court held that Monterey County cannot enforce its voter initiative that bans new oil and gas drilling and certain extraction methods. The Court affirmed a court of appeals ruling that the state’s authority to regulate oil and gas drilling preempts the two parts of the measure that were challenged. (see California Supreme Court Strikes Ban on Oil and Gas Wells.)
The Court held that the measure’s total ban on certain oil production methods in the county “nullifies — and therefore contradicts” Public Resources Code section 3106, which requires the state to “supervise oil operation in a way that permits well operators to “utilize all methods and practices” that the supervisor has approved.
In addition to Monterey, San Benito and Los Angeles attempted to limit oil activities in their jurisdictions through ballot measures. Los Angeles County and the City of Los Angeles both passed ordinances to ban new oil wells as part of a plan to phase out existing oil production. Culver City has also banned oil drilling and phased out oil production by negotiating an agreement to ban oil drilling in the city’s portion of the Inglewood Oil Field by 2026.
Opponents of the law state that it will replace consistent statewide regulations with a patchwork of local rules.