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Tim Daiss

Tim Daiss

I'm an oil markets analyst, journalist and author that has been working out of the Asia-Pacific region for 12 years. I’ve covered oil, energy markets…

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California Fights Trump’s Offshore Oil Drilling Plans

The state of California and the Trump Administration continue to differ over a range of issues, particularly when it comes to energy.

Earlier this week, the California State Assembly passed SB 884, a bill that if passed would prohibit the States Lands Commission from allowing any new wharfs, piers, pipelines and other facilities in state waters from the shoreline out to three miles offshore that could be used to expand oil production, effectively blocking Trump’s plans to drill for oil in federal waters off the California coast.

State Sen. Hannah-Beth Jackson, D-Santa Barbara, the bill’s sponsor, said “the Trump Administration’s proposal to dramatically expand offshore oil drilling is dangerous, reckless, and a direct threat to our coastal community.”

“California must stand firm in our opposition to this expansion, which could devastate our marine ecology, public health and coastal economy.” The move to ban drilling was blocked last year by the oil industry, according to various media reports in the state.

In January, the Interior Department released controversial plans to open vast areas, around 90 percent of offshore Areas in the U.S., including the Atlantic and Pacific coasts to new oil and gas exploration and drilling through a five-year leasing program that would begin in 2019.

Under the plan, the federal government would also offer 47 leases in federal waters on the outer continental shelf, including two each off the Northern, Central and Southern California coasts and one-off Washington and Oregon. More than a dozen states oppose the Trump administration's proposal to open up nearly the entire U.S. coastline to offshore oil leasing.

Choose your side

California lawmakers have overwhelming support of most Californians over the issue. A poll released in January by the Public Policy Institute of California found 69 percent of Californians oppose new offshore oil drilling, while 25 percent claim they support it. Related: Can The U.S. Bring Iranian Oil Exports To Zero?

SB 884 will go to the California State Senate by next Wednesday. If it’s approved, as expected, it will then head to Gov. Jerry Brown who is likely to sign the bill into law.

Environmentalists, not surprisingly, hail the bill as a way to not only confront the environmental dangers from oil drilling but as a way to stop what they see as federal encroachment. The oil industry, for its part, continues to advocate drilling, claiming that new oil development off the state’s coast could help reduce gasoline prices in the state. California has some of the highest prices for gas in the country.

“I don’t believe Californians want to sacrifice their coastline for less expensive gasoline,” said former Fresno Mayor Ashley Swearengin, now President and CEO of the Central Valley Community Foundation. “We’ve embraced the mantel of being the nation’s leader in renewable energy sources… However, we often shoot ourselves in the foot by putting costly regulations in the way of developing and using renewable energy sources.”

California State University Chancellor Tim White agreed that energy costs in the state were a problem, especially for those on low incomes, but added that “instead of permanently affecting our precious coastline, we should invest in more research and development – led by California’s colleges and universities – on alternative and more efficient sources of energy.”

Older Californians are still reticent over oil development in the state, recalling a 1969 oil spill in Santa Barbara, when three million gallons of oil leaked from an offshore drilling operation and coated local beaches.

Catherine Reheis-Boyd, president of the Western States Petroleum Association, a leading industry trade group, said that bans were not the answer. She said the bill would have “an immediate negative impact on our state’s energy supply and the Californians who work to provide it.” Related: Mexico’s Dramatic Energy Reform

“Demand for fuel is not decreasing,” Reheis-Boyd added. “Every barrel of oil not produced in California will be replaced by a barrel produced and shipped in from a region that doesn’t have our state’s stringent environmental laws.”

Despite the state’s resistance to new oil drilling, it has the third-largest share of petroleum reserves in the country and is the third-largest producer of petroleum among the 50 states, after Texas and North Dakota, according to the U.S. Energy Information Administration (EIA). Even though California's crude oil production has declined overall in the past 30 years, production in the state still made up about 6 percent of total U.S. production in 2016.

Finding common ground

California is not only poised for a possible legal battle with the federal government over offshore drilling but a host of other issues also, including automobile emissions regulations. However, in a positive development on Wednesday Trump Administration officials and California clear air regulators seemingly found some common ground in a meeting, saying they would keep meeting to work toward resolving their sharp conflict over vehicle emissions and shared the goal of a single national emissions standard.

By Tim Daiss for Oilprice.com

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Leave a comment
  • Canyonlobo on August 30 2018 said:
    Oil companies always promise lower gas prices when lobbying for more drilling. The voila, they get to drill in pristine areas.......and the price of gas goes up. We've been through this before.
  • Rexford L on September 02 2018 said:
    Simple, when the price of fuel in California is so damn high that no one can afford it except those that make a 7 figure income, SOMETHING will change!
  • Ronald C Wagner on September 05 2018 said:
    California should be the leader in promoting increased natural gas production and use. Their unrealistic policies against it are harming their own citizens through dirtier air and more expensive fuel. Natural gas trucks should be a mandated phase in.

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