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After spending $20 M, oil industry gathers enough signatures for initiative against setbacks law

by Dan Bacher
If the Secretary of State formally qualifies the oil industry’s petition, the issue of neighborhood drilling in California will go before voters on the 2024 ballot.
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After oil corporations pumped $20 million into the effort, the California Independent Petroleum Association (CIPA) announced on Dec. 12 that it has collected enough signatures to qualify a petition to undo Senate Bill (SB) 1137, a bill banning new oil drilling within 3,200 feet of sensitive sites like homes, schools, hospitals and other facilities. 

SB 1137, applauded by environmental justice advocates as a historic win for communities across California living with the toxic fumes, spills, and leaks of neighboring oil wells, was championed by Governor Gavin Newsom and passed by the California Legislature.

Before SB 1137 became law, California required no setbacks between oil and gas wells, unlike other oil and gas producing states such as North Dakota, Colorado, Pennsylvania and others. And the oil drillers want to keep it that way.

If the Secretary of State formally qualifies the oil industry’s petition, the issue of neighborhood drilling in California will go before voters on the 2024 ballot.

The announcement from the California Independent Petroleum Association gushed: “In less than two months, over 978,000 Californians rushed to sign the Stop the Energy Shutdown petition, which has been turned in to county registrar of voter offices throughout California,”

CIPA claims that the statewide 3,200-foot oil well setback was instituted “without any scientific basis.”  

“The law threatens to further increase California’s already high gas prices by decreasing in-state energy supplies and replacing those barrels with expensive imported foreign oil that contributes greater Greenhouse Gas emissions. Before SB 1137’s passage, existing state and local laws already required various setback distances from oil wells established by thoughtful scientific review,” CIPA claimed.

Rock Zierman, Chief Executive Officer of CIPA, also claimed. “California-produced oil is the most climate-compliant oil in the world. Producers in our state must adhere to the state’s greenhouse gas reduction program and account for all emissions. Foreign oil imports are totally exempt from those requirements.”    

However, environmental justice advocates disagree strongly with the oil industry’s claims that the setbacks law was “instituted without any scientific basis.” They also said that the oil industry lied to the voters when gathering signatures, claiming that the purpose of the petition was to “protect” the law. 

“The oil industry flat-out lied to voters about this referendum’s aims, which isn’t just an assault on democracy – it’s a crime,” said Hollin Kretzmann, Center for Biological Diversity. “Polluters know very well that protections against neighborhood drilling are immensely popular. That’s why they’re telling voters their petition protects the new health-and-safety law, when in fact it does the opposite. The entire referendum campaign is based on lies, and the attorney general needs to launch an immediate investigation into these misleading signature-gathering practices.”   

The Last Chance Alliance also noted that there have been “widespread reports of petitioners lying to voters to collect the 623,212 signatures needed to get the referendum to overturn SB1137 on the 2024 ballot.”

The alliance also said the Secretary of State’s office has been “inundated with voter fraud complaints” showing signature gatherers claiming that signing the petition would lower gas prices as well as reports about petitioners saying this would end the practice of urban oil drilling.  

Filings with the California Secretary of State reveal that oil companies funneled over $20 million as of December 2 to the committee Stop the Energy Shutdown, a Coalition Of Small Business Owners, Concerned Taxpayers, Local Energy Producers And The California Independent Petroleum Association.  

Eight funders of the referendum campaign each spent over a million dollars and are responsible for drilling within the authorized 3,200 foot setback zone, according to the filings:

• Sentinel Peak Resources: $4,500,000 with 1,475 wells within the setback zone

• Signal Hill Petroleum: $3,200,000 with 481 wells within the setback zone

• E & B Natural Resources Management Corp: $2,950,000.00 with 1,230 wells within the setback zone

• Vaquero Energy Inc: $1,800,000 with 472 wells within the setback zone

• Crimson Resource Management Corp: $1,587,000 with 253 wells within the setback zone

• Macpherson Oil Company LLC: $1,486,000 with 227 wells within the setback zone

• Holmes Western Oil Corp: $1,000,000 with 1 well within the setback zone

• California Independent Petroleum Association: $1,000,000; industry trade association without active wells 

Advocates said three of the top contributors, E&B Natural Resources, Sentinel Peak Resources and Signal Hill Petroleum, are “well-known villains to the communities they operate in.” 

On December 2, an idle well in Bakersfield owned by E&B Natural Resources blew out, injuring an oil field worker. 

State regulators warned E&B about excessive pressure at seven locations in the Fruitvale Oil Field, “later characterizing them as presenting an immediate danger to the surrounding area, including homes, parks, commercial centers and an elementary school,” according to Bakersfield.com.

“E&B initially resisted state orders to cap the well, but later agreed. It was during this process the well blew out,” according to the alliance.

In August, new infrared footage showed methane leaking from wells at E&B Natural Resources and Signal Hill Petroleum operations, threatening the health and safety of the surrounding communities.

“The reports led to Notices of Violation (NOV) by the South Coast Air Quality Management District for both E&B and Signal Hill Petroleum. E&B Natural Resources was also responsible for a 1,600-gallon oil leak in the Inglewood Oil Field in 2021,” the alliance stated.

“Across the state, industrial oil operations take place just feet from homes, schools and hospitals, increasing community risks of asthma, preterm birth, and cancer. Almost three million people live within 3,200 feet of an operational oil well, and California is one of the last oil producing states in the nation to allow oil drilling in neighborhoods,” the alliance pointed out.

Climate and environmental justice advocates respond to announcement

Climate advocates and representatives of frontline communities exposed to oil drilling pollution commented on CIPA’s announcement: 

“Big Oil’s callous disregard for the wellbeing of Californians is on full display when they desperately spend millions to keep drilling near playgrounds and schools or jack up prices at the pump to make record profits for shareholders,” said Ilonka Zlatar, Organizer with Oil and Gas Action Network. “This ploy is the latest from an industry that refuses to shift their business model to adapt to the needs of our world, and would rather double down all they have to extract every single drop of oil and penny from our society while they watch it burn; rather than pivoting to aid in the energy transition.”

“California’s referendum process is clearly broken when big polluters can spend $20 million to collect signatures to overturn necessary public health protections that the people most affected by oil drilling pollution have been demanding for over a decade,” stated Cesar Aguirre, Central California Environmental Justice Network. “Oil companies want to overturn a newly signed law that stops new drilling near homes and schools, a safety measure championed by Governor Newsom to protect children and families." 

“Big Oil has spent the last few months price gouging us at the pump to pay for this mission,” commented Kobi Naseck, Coalition Coordinator, VISIÓN Voices in Solidarity Against Oil in Neighborhoods. “$20 million taken from California’s working families gallon by gallon all to undo a democratically passed law and buy their way out of a common sense legislation. Everyone should be watching what’s happening in California right now – are we really going to let these big corporations buy back a law that stops them from setting up shop in our backyards and poisoning our kids? I don’t think so. They’re in for a helluva fight.” 

“The truth is, we hit them where it hurts,” said Brandon Dawson, Director, Sierra Club CA. “The oil and gas industry has spent a decade combating  every form of setbacks, and spent over $20 million on the referendum so far. SB 1137 passed with a broad mandate: the support of the governor, legislature, and millions of Californians in frontline communities exposed to harmful pollution as a result of oil and gas drilling. This news is a demoralizing setback, but the fight is not over. The referendum does not change the victory of SB 1137’s passing. Instead, it serves as an impetus to sustain the momentum at the polls in 2024.”    

“After over a decade of advocacy by frontline community leaders, the state finally passed legislation to end neighborhood oil and gas drilling,” stated Dan Ress, Staff Attorney, Center on Race, Poverty, and the Environment. “Sadly, the oil and gas industry refuses to let go of this harmful, racist strategy of sacrificing low-income communities of color for private gain, and it has spent millions of dollars harvesting signatures—often by deceitful, illegal means—in order to subvert our democracy and keep drilling without reasonable, science-driven protections for communities. This delay will harm millions of Californians, but we look forward to the people standing against the industry’s worst excesses at the ballot box in November 2024.”  

“This is the same playbook big oil used in Ventura county this year to undermine environmental protections and our democracy,” concluded Tomás Rebecchi, Central Coast Organizing Manager for Food and Water Watch. “Big oil spent 8 million on a local referendum to undo common sense health protections passed by our Supervisors. After successfully undermining our local democracy, they are using this game plan on a larger scale to overturn years of hard work by frontline communities for setbacks. Governor Newsom needs to show California is not for sale and impose an immediate moratorium on all oil wells, especially ones next to schools and homes.” 

Gusher of oil industry money has fouled California politics

The $20 million spent by the oil industry to gather the signatures for the referendum to reverse AB 1137 is just part of the millions of dollars the industry spent as it was making enormous profits after California prices soared to record highs.

Flush with billions of dollars in record profits, the oil and gas companies in California have been spending big money lately in an attempt to influence the California Legislature and voters and continue the systemic regulatory capture that has fouled California government for decades.

The oil and gas industry has spent an astounding $30 million to date in the 2021-22 Legislative Session against SB 1137, legislation to mandate buffer zones around oil and gas wells, and other bills they were opposed to. We won't know the final lobbying numbers until around January 31, 2022.

Big Oil and the Western States Petroleum Association (WSPA) spent $4,573,758 in lobbying expenses from September 1 to October 31, 2022. That brings the total of oil and gas corporation lobbying expenses to $30,029,638 in the last seven quarters of the 2021-22 Legislative Session: cal-access.sos.ca.gov/… 

The Western States Petroleum Association, the largest and most powerful corporate lobbying group in Sacramento, spent $2,164,967 of that $4,573,758 in lobbying expenses in the seventh quarter of the legislative session. That brings the total of the lobbying expenses by WSPA alone to $8,910,825 in the 2021-22 session.

While a long and hard-fought campaign by environmental justice groups, with the help of Governor Gavin Newsom, was able to finally get SB 1137 approved by the Legislature, other important bills were stopped by oil industry-backed legislators. Those measures include a bill to ban offshore drilling off the California coast and another bill to divest State of California pension funds from investments in the fossil fuel industry. 

The oil and gas industry also spent millions of dollars for legislative candidates it favored in the November 2022 election. The biggest sources of outside spending in legislative races in the November 2022 election cycle were oil and gas companies and electric utilities, according to Ben Christopher and Sameea Kamal of Cal Matters.

“Those organizations have spent more than $7.6 million, roughly one-fifth of the total. Most of that spending happened before Newsom announced a December special legislative session on his oil tax plan.”

Big Oil has been able to get away with what it does in California for decades because of the enormous influence the Western States Petroleum Association, the trade group for the oil industry, and oil and gas companies, has exerted over the California Legislature, regulatory agencies and media.

Over the past four years, fossil fuel companies paid almost $77.5 million to lobby lawmakers in Sacramento, reported Josh Slowiczek in Capital and Main on May 14.

“Oil and gas interests spent four times as much as environmental advocacy groups and almost six times as much as clean energy firms on lobbying efforts in California between 2018 and 2021, according to a Capital & Main analysis — reflecting the intensity of the industry’s efforts to influence policy in a state whose leaders have vowed to build an energy future free of fossil fuels,” Slowiczek wrote.

WSPA and Big Oil wield their power in 8 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) creating alliances with labor unions; (7) contributing to non profit organizations; and (8) sponsoring awards ceremonies, including those for legislators and journalists.  

Media collaboration with Big Oil

WSPA and Big Oil have for years worked closely with media outlets and more recently have sponsored awards for legislators and journalists.

For example, Catherine Reheis-Boyd, WSPA President and former Chair of the Marine Life Protection Act (MLPA) Initiative Blue Ribbon Task Force to create "marine protected areas" on the South Coast, was on the "short list" of nominees for the LA Times "Inspirational Women Awards” held on October 18, 2022.

Can you guess who was one of the sponsors of the LA Times awards? Yes, you guessed right — WSPA was a sponsor.

According to a tweet from @OfficialWSPA, "Today @latimes acknowledged a woman who is already well known in our industry as a trailblazer and inspiration to tens of thousands of women. Congrats to our fearless leader @WSPAPrez for being recognized as a shortlisted nominee for the Inspirational Women Awards."

In addition, four LA Times reporters this year received the “Courage in Journalism” award from the Sacramento Press Club. Yes, the Western States Petroleum Association was one of the sponsors of these awards also.

In 2015, I wrote this article about how LA Times and the California Resources Corporation teamed up on a propaganda website: https://www.dailykos.com/story/2015/10/30/1442947/-LA-Times-and-Big-Oil-team-up-on-propaganda-website. Fortunately, the Times is no longer managing and running that website.  

Photo caption: “Big Oil’s callous disregard for the wellbeing of Californians is on full display when they desperately spend millions to keep drilling near playgrounds and schools or jack up prices at the pump to make record profits for shareholders,” said Ilonka Zlatar (L), Organizer with Oil and Gas Action Network, shown here at a recent protest outside of the California Energy Commission in Sacramento. Photo by Dan Bacher.
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