Behind the Battle for the Future of California’s Oil

Environmentalists, petroleum industry executives, union leaders and communities near oil drilling sites are all gearing up for what’s expected to be a fierce political battle over efforts to reduce California’s oil production.

This time around, Gov. Gavin Newsom says he wants a ban on fracking, and a key state lawmaker says the Legislature should go further and reduce oil drilling of all kinds.

The push comes in the middle of two crises hitting the state: the coronavirus pandemic and record-breaking wildfires intensified by climate change.

The economic downturn and shelter orders have slammed fossil fuel companies that are now facing more heat for contributing to the world’s global warming crisis.

Even the head of one of the nation’s largest oil industry trade groups sees a difference in the political climate.

“The emotion around our industry has escalated,” said Catherine Reheis-Boyd, president of the Western States Petroleum Association.

Last month, Newsom called on state legislators to develop a bill that would eliminate new hydraulic fracturing licenses by 2024. Several lawmakers announced they would propose a fracking ban when the Legislature reconvenes later this year.

State Sen. Henry Stern, D-Los Angeles, chairman of the Senate Natural Resources and Water Committee, told KQED that he wants to go further and reduce all kinds of oil drilling in the state.

Stern says his goal is a “grand bargain” that would lead to legislation that would do more than just ban fracking, an extraction technique that makes up only a small percentage of the California’s oil production compared to traditional oil and gas drilling.

His comments could lead to a new legislative battle in Sacramento over a key part of the state’s energy sector — one that members of some communities near drilling sites in California’s oil country say they are ready for.

“Living next to this industry source of pollution, residents are exposed to higher rates of dangerous chemicals both inside their homes and in their neighborhoods,” said Gustavo Aguirre Jr., Kern County coordinator for the Central California Environmental Justice Network.

“It is crucial we work together on this and listen and acknowledge what frontline communities have been advocating and ground-truthing for many years now,” he said.

Oil Industry and Labor Push Back

Two of California’s major trade associations representing oil companies are expected to lobby hard against any new limits on oil production.

The Western States Petroleum Association (WSPA) and the California Independent Petroleum Association (CIPA) say a proposal to ban fracking or any other extraction technique will hurt oil workers and increase the state’s reliance on fuel from sources outside of the country.

Reheis-Boyd, from WSPA, says the demand for gasoline in the state is too high to curtail oil production: There are just too many cars on the road that rely on it.

“We are going to have to produce adequate, reliable, affordable forms of fossil fuel energies for quite some time,” she said.

But the California Energy Commission says Californians won’t have to wait too long. Residents here are increasingly buying less gasoline and are expected to purchase even less in the coming years, according to a presentation by one of the agency’s leading fuel specialists.

Regardless, the head of CIPA says lawmakers who want to ban fracking and other kinds of oil drilling have no right to tell Central Valley communities what they can do.

“Extremists are misleading the public about well stimulation, which occurs thousands of feet below ground, far away from drinking water sources or air, and almost exclusively in mature oil fields in the remote parts of western Kern County,” said Rock Zierman, the CEO of CIPA, which represents hundreds of independent crude oil and natural gas producers in the state.

Multiple studies, however, have shown health risks for people living near oil and gas wells.

Still, Zierman says a ban on fracking would hurt the state’s economy.

“Banning hydraulic fracturing hurts consumers, undermines California’s climate leadership by increasing reliance on foreign oil, jeopardizes quality jobs and will generate less state and local tax revenue to fund our schools, firefighters and health care,” he said.

Opposition is just as strong from one of the state’s leading labor unions.

“This is nothing new. It’s what we hear from a lot of coastal Democrats who are less in touch with blue-collar workers in California,” said Robbie Hunter, president of the State Building and Construction Trades Council of California, which represents hundreds of thousands of workers.

Hunter, who publicly feuded with the governor in the past, says climate change needs to be addressed, but curtailing oil production in California would not help the environment and cost jobs.

“Until we can generate enough energy here in California, we should not be cutting off our ability to meet or own existing needs,” Hunter said. “We have seen this again and again — press releases and policies that do not align with reality and the needs of today, or even tomorrow, of the ordinary citizens of California.”

No Room for Compromise

A leader of one of the environmental groups that has been pushing for a fracking ban for years says limiting petroleum production is a must.

“People near hazardous oil operations shouldn’t have to wait one more day for protection,” says Hollin Kretzmann, senior attorney with the Center for Biological Diversity’s Climate Law Institute

He is calling on Gov. Newsom to stop issuing approvals for new oil and gas wells and for fracking, institute a buffer between wells and communities and commit to a plan to phase out oil and gas production while transitioning oil workers to green jobs.

“Oil production pollutes the air we breathe and the water we drink,” Kretzmann said, adding that research has shown higher rates of preterm births and low birth weights associated with pregnant women who live near oil and gas wells.

“These harms fall disproportionately on communities of color and low-income communities, who already suffer from higher exposure to industry pollution,” he said.

Kretzmann does not see room for a compromise, though.

“Trying to reach a grand bargain with the oil industry responsible for climate change is a fool’s errand,” he said. “It is time politicians stop pretending to look to Big Oil for solutions. These companies are simply not interested in doing anything other than lining their pockets.”

How to Reach a Deal

But one expert on oil politics says there is hope for a compromise.

A deal on wide-ranging petroleum drilling limits should focus on helping older petroleum workers “retire with dignity” and younger workers transition to new jobs, according to Matto Mildenberger, an assistant professor of political science at UC Santa Barbara.

“The key here will be to split labor and business,” said Mildenberger, who wrote the book, “Carbon Captured: How Business and Labor Control Climate Politics.”

“Negotiations with the fossil fuel industry itself will be less productive,” he said.

Key to that strategy will be putting in place a “just transition,” a term used to describe a fair way of transitioning oil workers into a green energy economy.

But Hunter, from the construction union, dismisses that idea.

“We want to stop hearing about the green jobs they are going to create for blue collars as ‘compromise,'” he said.

“No one should lose their job because the politics of the day kills an industry before we have the technology to create enough energy in alternate ways.”