By Dustin Gardner, SAN FRANCISCO CHRONICLE
December 24, 2020
SACRAMENTO — In the same year Gov. Gavin Newsom declared that the state faced a “climate damn emergency” with wildfires, his administration approved far more permits to let companies drill new oil and gas wells.
California approved 1,646 drill permits in the first nine months of 2020 — a 137% increase over the 694 permits it approved during the same period last year, according to data from the state Geologic Energy Management Division, the agency that regulates oil and gas extraction.
Environmentalists say the increase is emblematic of a disconnect between Newsom’s rhetoric and a lack of strong policies to confront climate change, which many experts believe contributed to a record-setting wildfire year in California in which 1.44 million acres burned and more than 30 people died.
“We’re two years (into Newsom’s term), and we’ve heard lots of good rhetoric and a fear of action,” said Kathryn Phillips, director of the Sierra Club California. “Everything points to the fact that we have to get off of fossil fuels. The problem is, we haven’t found the political leadership that has the courage to make that happen.”
Newsom’s administration defended the permit approvals by noting that oil production in California is down overall and that few of the approved wells have actually been drilled.
Although the state issued far more permits this year, the number of new wells drilled plummeted by 77% — with just 51 dug through Sept. 30, compared with 223 last year. That’s largely because oil prices dropped as people traveled less during the coronavirus pandemic.
“A point that’s often overlooked is that permit issuances don’t always result in new wells being drilled or immediate well activity,” Uduak-Joe Ntuk, the state oil and gas supervisor, said in a statement.
Ntuk said the number of wells that companies abandoned or stopped using this year in the state, at least 1,686 for oil and gas wells, far exceeded new drill sites. Production in the state is also down this year: Oil companies produced about 102 million barrels, compared with 157 million barrels in 2019.
Environmentalists say that lack of drilling is of little comfort because permit holders could start work at any time within two years, the length of the permits, as the economy and travel presumably rebound.
Consumer Watchdog and the FracTracker Alliance, consumer and environmental advocacy groups, first revealed the increase in new drilling permits. Liza Tucker, an advocate with Consumer Watchdog, said the surge during 2020 appeared to be an effort by oil companies to improve their attractiveness to investors.
“I believe it’s a ruse to attract investment and be able to refinance debt at a reasonable cost,” Tucker said. “Why are (state officials) allowing themselves to be used when they have increased discretion and authority not to rubber stamp every single permit that comes across their desk?”
State officials said the uptick in permits could partly be the result of a state appeals court ruling in February that found Kern County, where the vast majority of oil is produced, issued more than 1,000 permits over several years without conducting a proper environmental review to understand risks to water and air quality.
The ruling included a 30-day deadline for the county to stop issuing new permits under its old review system. During that window, the number of permits issued by the state Geologic Energy Management Division surged.
Pump jacks operating at a drilling site on Deer Valley Road in Antioch, Calif., on Sunday, December 20, 2020. The number of new oil and gas drilling permits approved by Gov. Gavin Newsom's administration has dramatically increased over the past year. State officials defended the permit approvals by noting that oil production in California is down overall and that few of the approved wells have actually been drilled. Environmentalists say that's of little comfort because permit holders could drill anytime within two years as the economy rebounds.
Rock Zierman, CEO of the California Independent Petroleum Association, a trade group that represents about 500 oil and gas producers, said environmentalists’ concern is misplaced, given the drop in oil production.
“Extremists are using a snapshot in time to paint a picture that is blatantly false when you look at all of the data,” Zierman said in an email. “California’s oil is produced under the toughest regulations on the planet, proving that locally produced oil is better for our environment and our economy.”
State officials and environmentalists disagree over how much legal authority Newsom’s administration has to reject permits. For decades, the state has operated under a view that property owners have broad rights to use resources under their land.
Ntuk, the state oil and gas supervisor, said local governments have the power to approve the location of wells, and that the state’s job is to ensure that “the wells meet technical, safety and environmental protection standards.”
Kassie Siegel, Climate Law Institute director at the Center for Biological Diversity environmental group, said state regulators have long been a pushover for the fossil-fuel industry and often ignore that state law requires them to evaluate the risks of drilling.
“Their mandate is to protect Californians, protect their health, protect the environment, and they’re violating that,” Siegel said. “You don’t have a property right before you get a permit.”
She added, “If the oil companies keep getting to do what they want to do, we’re going to have such catastrophic climate damage to the planet that we’re not even going to recognize it.”
Environmentalists say Newsom’s ties with lobbyists who have clients in the oil industry contributes to a lack of state aggressiveness.
They point to the governor’s attendance last month at a dinner at the French Laundry in Napa County. The dinner — which sparked outrage over Newsom’s disregard for his own administration's warnings to avoid large gatherings during the pandemic — was a birthday celebration for lobbyist Jason Kinney.
Kinney is a partner at Axiom Advisors, which represents Aera Energy, a Bakersfield-based oil exploration company owned by Shell and ExxonMobil. Aera received 49 of the 69 fracking permits that the state has approved this year.
Newsom’s office did not respond to a request for comment.