By Wes Venteicher, POLITICO
SACRAMENTO, California — An oil industry group is withdrawing its ballot challenge to a California law that bans drilling within 3,200 feet of homes, businesses and schools, the group announced Wednesday.
What happened: The California Independent Petroleum Association said it would remove the measure from the ballot by Thursday’s deadline to submit or withdraw initiatives. The organization said it plans to sue over the law instead.
“While CIPA is confident in its ability to be successful at the ballot box, we also recognize the likelihood of the Legislature simply introducing other similar bills,” the group said in an announcement. “Therefore, judicial intervention is necessary to truly resolve this matter.”
Why it matters: The decision means the 2022 law — which was on pause pending a keep-or-overturn decision from the state’s voters — will take effect after the initiative is withdrawn.
It’s the latest blow against the oil industry in California, where Gov. Gavin Newsom, the state Legislature and environmental lawsuits have aggressively sought to curb extraction, refining and sales.
It’s also the fifth initiative to fall off the November ballot in the past two weeks, following the withdrawal of proposals to reform the Private Attorneys General Act, expand children’s health care and fund pandemic research and a court striking down another to make it harder to pass new taxes and fees.
Background: Newsom signed CA SB 1137 (21R) in 2022, enacting the 3,200-foot setback zone. CIPA challenged it through the state’s referendum process, gathering enough signatures to qualify it for the ballot this November.
The qualification paused the law, which could have provided more time for CIPA to drill in the setback zone. But almost all extraction in the state happens in Kern County, where a California Environmental Quality Act lawsuit from environmentalists resulted in a moratorium for most of the intervening time.
CIPA raised about $20 million to back its effort to overturn the law but stopped spending it after qualifying the law at the start of 2023. Its “Stop the Energy Shutdown” campaign has been sitting on about $14 million in loans for more than a year.
Meanwhile an organized, high-powered coalition led by actress Jane Fonda and philanthropist Wendy Schmidt and featuring Newsom and former Gov. Arnold Schwarzenegger formed to support the setback law, raising nearly $30 million and running ads in Southern California and Sacramento.
The industry’s challenge to the law has been polling poorly, with just 20 percent of respondents in a University of Southern California poll in January saying they’d get rid of the law.
Another factor was a law by Assemblymember Isaac Bryan last year that changed how referenda appear on ballots. Bryan’s law changed the wording to ask voters whether to keep or overturn a given law, rather than describing the law and posing a yes-or-no question on whether to adopt the referendum.
Bryan this year introduced another bill targeting the 3,200-foot setback zone, CA AB 2716 (23R), this time proposing to fine oil companies $10,000 per day if they operate low-production wells within the zone. He said he has expressed willingness to narrow the bill’s reach geographically — an offer he said CIPA welcomed.
Still, the organization got very little, if anything, in exchange for dropping the measure, he said.
“They were hoping this referendum process would create leverage in their favor,” Bryan said in an interview. “We found ways through the creativeness of the campaign and through bills like AB 2716 to create a counter-leverage that is ultimately what forced this conversation.”
What’s next: The Department of Conservation’s Geologic Energy Management Division will enforce the law. CIPA didn’t say where it intended to file suit.