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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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Oil Companies Stand Up To Los Angeles City Council Drilling Ban

  • LA was and remains a major hub for fossil fuel production, with giant wells hidden behind false buildings.
  • In December, the LA City Council voted unanimously to ban new oil and gas drilling as well as agreeing to phase out existing wells over the next 20 years.
  • Just over a month after the council’s decision, an oil firm with a drilling project in Wilmington, LA has decided to sue the city over the ban.

After decades of transitioning towards renewable energy, with several new developments across the state, LA has finally taken significant steps to move away from oil and gas. California has been repeatedly called the leader in clean energy in the U.S., and yet it is home to several large-scale oil and gas projects, as well as thousands of plugged wells from its former black gold heyday. And despite a lack of public awareness, LA was and remains a major hub for fossil fuel production, with giant wells hidden behind false buildings in busy districts across the city. At the end of last year - following several reports on the negative impact of fossil fuels on LA residents – the city council introduced a move towards a total ban on oil and gas drilling within city limits. But now, just over a month later, oil and gas companies operating in the region have filed a lawsuit against the city. So, will LA finally see the green transition it has long desired, or will Big Oil be allowed to continue pumping so long as demand remains high? 

In December, the LA City Council voted unanimously to ban new oil and gas drilling as well as agreeing to phase out existing wells over the next 20 years. This is perhaps the most ambitious climate policy to be passed in the state to date and could provide the blueprint for other cities across the U.S. to follow. At present, there are 26 oil and gas fields and more than 5,000 active and idle wells in LA. While this has been negatively seen by U.S. politicians looking to boost national oil and gas output, as the country looks to reduce its reliance on Russia and ensure its energy security, LA residents and environmental groups have long been pushing for this move. The ban follows a major new policy from Californian lawmakers last year to ban new oil wells within 3,200 feet of homes, schools and other populated areas. 

Related: EIA Inventory Report Pushes Oil Lower

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Yet, just over a month after the council’s decision, an oil firm with a drilling project in Wilmington, LA has decided to sue the city over the ban. The company, Warren Resources, has accused the council of failing to carry out the necessary environmental review over the potential impact of halting extraction. The lawsuit, filed in the LA Superior Court, states that the decision violates the California Environmental Quality Act, the city’s General Plan and the state and federal constitutions. Warren has good reason to be unhappy about the ban, as it would mean the closure of all its operations, which are all located in LA. 

The lawyers on the lawsuit stated: “The City has failed to ask the necessary questions and obtain the required evidence at every turn, has rushed every legally required process along the way, and as a result has based its approval and adoption of the Ordinance on a woefully deficient environmental document.” And the President and CEO of Warren Resources, James A. Watt, explained, “Warren Resources has spent millions to consolidate our operations into a single, all-electric location with an impeccable environmental record.” 

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Yet, Bahram Fazeli, the director of research and policy at Communities for a Better Environment, believes that “This is a baseless lawsuit to delay common sense protection for vulnerable communities," Fazeli said. "The city has the right to determine its land-use priorities and to make communities whole and healthy.”

However, four other oil entities have already also initiated a separate lawsuit against the city’s ban this month. And more oil companies may soon follow in Warren’s footsteps, many of whom have several high-value oil operations in development across the city.

California continues to be a major producer of oil and gas, as the seventh-largest crude oil-producing state in 2021 and third-largest refiner. It is also the largest consumer of jet fuel and second-largest consumer of gasoline, accounting for 15 percent of U.S. jet fuel consumption and 10 percent of motor gasoline use in 2020. However, in 2021, California was also the country’s biggest producer of electricity from solar, geothermal, and biomass energy, demonstrating the expanse of its renewable energy sector. While oil and gas still play a major role in California’s economy, as well as demand for the fuels remaining high, the state is making a clear and intentional transition towards greener alternatives by rapidly expanding its renewable energy capacity. 

LA’s ban on new oil and gas projects, and plans to phase out existing operations, marks a major step away from fossil fuels to renewable alternatives. It follows several new climate policies at the state level and a wide array of reports and lobbying from environmental groups and residents. However, this is unlikely to be an easy transition as oil companies operating in the state reject the move, using legal action to ensure the City Council faces several hurdles on the road to green. 

By Felicity Bradstock for Oilprice.com

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