A Weird Week for Oil off California

Last week was a strange week for oil: At one point, House Republicans, hoping to block President Biden’s ability to lower gas prices, passed a bill saying that oil could not be released from the Strategic Petroleum Reserve until the Secretary of Energy made a plan to produce an equal amount from oil and gas leases. It was a head-scratcher, if only because the Secretary of Energy doesn’t control the Interior Department or its oil and gas leases. Then Democrats in Congress introduced their eighth bill to ban all offshore drilling along the West Coast, while oil interests sent a petition to the Supreme Court asking the justices to overturn the fracking moratorium in the very same area.

To much public fanfare, fracking off the California coast was banned in a settlement between Santa Barbara’s Environmental Defense Center (EDC) and the Department of the Interior in 2014, and the federal government seems to have regretted it ever since. Fracking attempts to juice up a well in thick crude through “well stimulation techniques” that use pressure and sometimes the introduction of caustic chemicals. The federal agencies that regulate offshore oil say they were totally unaware that fracking was taking place in the Pacific until weeks of diligent paper-chasing by the EDC in 2013 found at least 15 instances at platforms Gail and Gilda. The settlement required an environmental review that once completed was anemic at best; it determined that fracking — which uses hydrochloric and hydrofluoric acids, among others — would have few cumulative effects on the environment.

The EDC and Santa Barbara Channelkeeper sued again, this time joined by the Center for Biological Diversity, Wishtoyo Foundation, and Kamala Harris’s Office of the Attorney General of California and the Coastal Commission. The questions for them were whether the state’s coastal zone would be adequately addressed, whether the endangered southern sea otter would be affected, and if federal environmental policies had been flouted.

The issue has been fought by the Department of Justice at every turn; the department was turned down most recently in its request for a larger hearing at the District Court. ExxonMobil, the American Petroleum Institute, and DCOR — which operates platforms in the Santa Barbara Channel, including Gilda — were allowed into the case as intervenors and are seeking a third federal at-bat on the same arguments. The Supreme Court can take as long as six weeks to send a notice that it will review a case, and only 60 or so cases are heard out of the roughly 5,000 cases appealed annually to the Supreme Court.

“The very oil companies that have claimed offshore fracking rarely occurs are attempting to take this case all the way to the Supreme Court, which shows how much of a threat these practices really are to our region,” said Maggie Hall, a senior attorney with the EDC. “The petition reiterates arguments that lost at the Court of Appeals,” she said, adding that EDC saw no merit in the arguments. “The oil industry is focused on their claim that the courts have no power to review the government’s decision to allow offshore fracking and acidizing. However, the law clearly provides groups like EDC the right to have their day in court to challenge agency actions such as this one.”

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At a time when California is trying to substitute carbon-emission-producing cars and power plants with greener replacements by the end of the decade, the oil industry’s petition notes that “10 billion barrels of untapped oil and 16 trillion cubic feet of untapped natural gas” are estimated to lie off the West Coast. The petition draws a parallel to other offshore uses, such as wind, and how the review contemplated for fracking will likewise “bog down” environmental review and licensing for other activities. However, wind energy has yet to use fracking fluids or similar toxic chemicals, and the lease bidding process is in full swing for two locations in federal waters off California.

On the day before the oil companies filed their petition to the Supreme Court, Senator Dianne Feinstein and 10 other Democratic Senators and 30 Democratic Representatives introduced a pair of bills to ban all oil drilling permanently off the West Coast. It was the eighth time the bill was up, originally written by Senator Barbara Boxer after BP’s Deepwater Horizon disaster in the Gulf of Mexico. While Senator Feinstein commented that offshore drilling was not part of the historic transition to cleaner energy sources, Valerie Cleland with the Natural Resources Defense Council added, “We can’t continue business as usual. With a climate and biodiversity crisis to address, and a clean energy economy taking off, this is no time to pursue a backward-looking energy strategy. The public has made it clear — communities oppose new offshore drilling and seismic blasting and don’t want to hand over our coastal waters to polluters.”

But that bill, the West Coast Ocean Protection Act, likely faces the same cavernous gap in votes as the House Republicans’ Strategic Production Response Act. Among the economic issues facing Biden’s administration, high gas prices have been the most critical. The price at the pump went up in Santa Barbara 13 cents last week, according to national surveyor GasBuddy. Windfall profits are being made by oil refiners — 30 percent in the third quarter, the nonprofit Consumer Watchdog estimated. Two California plants are converting to refining alternative and renewable fuels, which has tightened supply, and sanctions on Russian oil and gas have had worldwide repercussions. To address the shortage, Biden began releasing 50 million barrels from the strategic reserve in December 2021, which brought down prices, and the White House is now restocking the reserve.

The House Republicans’ new strategic reserve bill attempts to gut President Biden’s ability to use the reserve again, except in an emergency. But it directs the Secretary of Energy — currently former Michigan governor Jennifer Granholm — to make a plan to increase oil and gas production at leases held by the departments of Agriculture, Interior, Defense, and Energy, not all of which she controls. The bill states the plan must be completed before an equal amount of petroleum can be drawn from the Strategic Petroleum Reserve, which dates to the oil crises of the 1970s.

Santa Barbara Congressmember Salud Carbajal was quick to denounce the effort: “Members of both parties agree that increased energy costs, including our gas prices, hurt our constituents — but sadly it seems the new majority in the House is more interested in tying the President’s hands on the most effective tool we have to combat price spikes than stabilizing energy markets,” Carbajal said.

The conservation group Center for Wester Priorities had harsher words: “This is a bill that doesn’t do what its supporters claim. It’s a bill that doesn’t do anything at all,” said Rachael Hamby, policy director for the nonprofit. For one thing, seven to 10 years can pass before a leaseholder gets through all the permitting and drills bite down to a well of oil. This bill misses more than the timeframe: “It orders the Energy secretary to come up with a plan to lease more land — but the Energy department doesn’t manage our public lands,” Hamby pointed out.

Hamby went on to note that recent lease sales by the Interior Department were a “complete flop”; one off Alaska had 193 parcels and one bid. And there’s already many leases sold but going untended. According to Carbajal’s office, “the oil and gas industry already has 26 million acres of public lands under lease, of which more than half is unused. Fossil fuel companies are also sitting on approximately 9,000 approved but unused permits for oil drilling in the U.S.” Added to the bill’s negative chances is White House opposition and President Biden’s assurance he would veto it.

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