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Industry Prepares to Sue the State over Illegal Setback Law

In the last five days of session in 2022, the California Legislature hastily pushed through Senate Bill 1137 (SB 1137), which imposes an arbitrary 3,200-foot setback for oil operations. This new law not only prevents drilling new wells but also prevents the maintenance of existing ones, potentially impacting more than 15,000 wells across California. In response, the California Independent Petroleum Association (CIPA) launched a successful campaign to collect nearly one million voter signatures in just 65 days to place a referendum on the 2024 ballot.

Polling has consistently shown that Californians would rather produce their energy locally under California’s strict environmental rules and regulations than increase our already troubling reliance on imported foreign crude from Saudi Arabia, Iraq, and Ecuador.

Supporters of SB 1137 say the science is clear on health impacts living near an oil well. The state, however, has not produced actual scientific studies that prove causation in California. Instead, the state used a “Science Advisor Panel (SAP)” that conducted a survey of studies, nearly all of which are from other states, most examine hydraulic fracturing which is not permitted in California, and not a single one calls for a 3,200-foot setback (see document). The survey also ignored several scientific studies conducted in California that show production can be done safely. 

CIPA recognizes the likelihood of the Legislature simply introducing other similar bills, driven by the same unfounded narratives and lack of sound science. Therefore, judicial intervention is necessary to truly resolve this matter.

CIPA and other opponents of the energy shutdown effort are pivoting from pursuing the referendum to instead pursuing a legal path to demonstrate that SB 1137, and any future legislation of its kind, is not legally sound. The in-state energy sources being shut down by SB 1137 have all been duly permitted both by local and state entities and have undergone environmental reviews. Additionally, the California Environmental Quality Act (CEQA) requires all impacts be mitigated, and current California law mandates monitoring and inspection of facilities to ensure no emissions.

Shutting down these permitted assets, into which companies have invested millions of dollars without any proven environmental harm, constitutes an illegal taking under Article 5 of the US Constitution. It also violates due process and equal protection given that entities with much higher proven emissions that exist in the setback zones such as landfills, ports, water treatment and other industrial facilities, are not shut down by this or any other law. Instead of unfounded claims, the state will have to prove their case in a court of law where statements must be factual and backed by evidence. 

The state has also not answered whether it would permit any housing or other development within 3,200 feet of an existing oil well. If in fact the science has demonstrated harmful effects, why would the state or local governments permit new sensitive receptors from being built in the “Health Protection Zones (HPZ)? The state’s own consultant that reviewed scientific studies stated that SB 1137 may create “reverse setbacks” that disallow any development in the HPZ. 

CIPA is confident that we can secure a decisive legal resolution that allows California's oil producers to continue supplying the world’s only climate-compliant oil, meeting the energy demands of Californians while reducing our dependency on more expensive foreign oil that drives up Californians’ already sky-high gasoline prices.

"Californians do not want to further increase our dependence on expensive foreign crude when California workers can create the energy locally under the strictest regulations in the world.  Supporters of the energy shutdown can make unfounded claims in the press and in paid advertisements, but they can’t make those claims in court without evidence.  That’s why we are pivoting from the referendum to a legal strategy since it is a violation of the US Constitution for the government to illegally take private property, particularly operations that were duly permitted by the government and all impacts mitigated,” said Jonathan Gregory, Chairman, California Independent Petroleum Association, CEO of RMX Resources.

For more information, contact Rock Zierman.


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