CA oil regulators issue 34 new drilling permits in first 6 months of 2024, head oil regulator retires

Los Angeles, CA – California oil and gas regulators approved 35 new oil and gas well drilling permits in 2024’s second quarter, a big leap from zero new permits approved in the same quarter last year, Consumer Watchdog and FracTracker Alliance reported in August.

“About half of these new wells were potentially illegally issued within the community setback zone,” said Liza Tucker, Consumer Advocate for Consumer Watchdog, in a press statement. “The pace of plugging wells slowed by a quarter over the same period last year, though the issuance of all types of permits in total fell 41%.”

A total of 16,366 total oil and gas well drilling permits have been approved by the Gavin Newsom administration since Jan 2019.   

A total of 35 new well permits were issued in the first 6 months of 2024, a +400% change from the first 6 months of 2023.  

A total of 99 oil well rework permits were issued in the first 6 months of 2024, a -67% change from the first six months of 2023.

That comes to a total of 134 new or reworked permits in the first two quarters of 2024.   

California is currently home to 101,000 actively producing, idle, and newly permitted wells that have not yet become operational, according to data compiled by the FracTracker Alliance. Out of that number, 26,000 are located within the 3,200-foot health protective zone where millions of people live.

Groups accuse CalGEM of undermining state laws, conflicts of interest

In a letter to the Governor, the groups accused the California oil well regulatory agency, the California Geologic Energy Management Division (CalGEM) of the California Department of Conservation, for “undermining two state laws banning new oil well permits near communities and requiring adequate bonding of oil wells.”

They questioned the influence of a former top oil regulator who went to work for two oil drillers who benefited from CalGEM’s decisions and called for an independent investigation of the “revolving door” between government and corporations.

“In June, CalGEM violated SB 1137 (Gonzalez)—the public health setback law of 3,200 feet between drilling and communities—hours after the ban on community drilling took effect when the oil industry withdrew its referendum to overturn the law. CalGEM approved 17 permits within the setback zone,” the groups wrote. 

“In addition, CalGEM is failing to implement state law requiring adequate bonding for oil wells under California Resource Corporation’s (CRC) recently completed acquisition of Aera Energy, making the company California’s top holder of idle wells–wells that no longer produce oil and could soon become orphan,” they continued. “The Orphan Well Prevention Act requires that drillers who acquire the ‘right to operate’ a low-producing or idle well be responsible for full bonding but CalGEM is refusing to apply the law.”  

Kyle Ferrar, Western Program Director at FracTracker Alliance, pointed out, “New drilling locks California into decades of continued fossil fuel consumption and the environmental impacts that entails. The state should not be allowing operators to drill new oil and gas wells, particularly when the state is so under-bonded to deal with cleaning up existing wells.” 

“Governor Newsom needs to get control of CalGEM, or its failure to regulate oil wells will stick to him like oil tar,” said Liza Tucker, energy director at Consumer Watchdog.

14 permits issued to Berry Petroleum 

Tucker reported that 14 permits were issued to Berry Petroleum. In the revolving door between regulators and corporations that has polluted California politics for many decades, Jason Marshall, a former top Department of Conservation regulator who had served as Acting Director of CalGEM and its predecessor agency more than once over 28 years, left to become Vice President of Corporate Affairs at Berry in 2020.

“While at CalGEM, groups criticized him for allowing lax permitting and regulation, and for conflicts of interest. In May, Marshall joined California Resources Corporation (CRC) as Vice President of Regulatory Affairs, helping to leverage the state’s decision not to enforce The Orphan Well Prevention Act just as CRC acquired Aera,” Tucker added.

“Will Governor Newsom allow Jason Marshall to continue to run CalGEM or will he order the agency to enforce the law?” asked Tucker. “CalGEM’s decisions to issue new permits in the setback zone and to fail to endorse orphan well laws is making a mockery of Newsom’s claim to be tough on oil drilling. Newsom needs to conduct an investigation of Jason Marshall’s role in CalGEM’s decision making and reverse its course.”

Consumer Watchdog and FracTracker said they called on Newsom to fire Marshall and other top deputies in July 2019 after they learned about financial conflicts of interests with supervisors at the regulatory agency owning stock in oil companies they regulated. Marshall resigned as the Department of Conservation’s Chief Deputy in February 2020.

The groups noted that Conservation Director David Shabazian praised Marshall after his resignation for his “many years of dedicated service” and his “wisdom and counsel on important issues.” They said Shabazian made the decision recently not to enforce The Orphan Well Act on CRC after Marshall joined the company.

“Governor Newsom shook up CalGEM in response to disclosures about conflicts of interest under Marshall’s watch, but now it appears Marshall’s influence over decision making is alive and well,” said Tucker. “Newsom needs an external investigation into Marshall’s influence over Shabazian and CalGEM.”   

Department of Conservation Director David Shabazian retires

The groups’ letter and the political pressure upon Governor Gavin Newsom apparently worked. Just a week after the groups sent the letter to Newsom regarding the conflicts of interest,  Department of Conservation Director David Shabazian, who was hired in 2019, sent a letter to employees saying he would retire effective Sept. 1. His Chief Deputy Director Gabe Tiffany will serve as director on an interim basis. 

A department spokesperson told eenews.net that “after 30+ years of public service he decided this was the right time.” Shabazian did not explain the reason for his departure from the agency: www.eenews.net/...www.eenews.net/… 

The groups looked at Shabazian’s retirement as a “hopeful sign.”  

"Shabazian's sudden departure is a hopeful sign that the Newsom Administration will not tolerate conflicts in decision making about oil drilling and will revisit Shabazian's decision not to require the $2.4 billion worth of bonding for the CRC Aera merger, which leaves the public on the hook for paying for the plugging and cleanup cost of wells," said Jamie Court, president of Consumer Watchdog. "The Governor needs to reverse the DOC decision and require adequate bonding of CRC." 

California oil drilling has decreased in recent years, due to political pressure on regulators by environmental organizations, consumer groups and climate justice advocates and the fact that oil supplies are dwindlling after over 100 years of oil drilling. When I first started writing about this issue, California was the third largest oil producing state in the nation. Now the state is the nation’s seventh largest oil producer. 

California oil regulators have dramatically cut their approval of new oil drilling permits since 2019 when Newsom took office as Governor. CalGEM issued 2,366 new permits in 2019, 2,002 in 2020, 553 in 2021, 551 in 2022, 25 in 2023 and 35 in 2024. That comes to a total of 5,532 new permits since 2019.

Chevron and Western States Petroleum Association top 2023 California lobbying with $18.1 million

Why has Big Oil been able to get away with what it does in California for decades? It’s because of the inordinate influence of Big Oil on California politicians and regulators.

Big Oil spent more money on lobbying in California in 2023 than any other year on record besides 2017. Big Oil spent $25,445,606 on lobbying in California in 2023 and $25,445,606 in 2017, according to the research team at Sunstone Strategies in their “Crude Truth” newsletter.  

The group analyzed the California lobbying filings of every registered oil company in California, in putting 2023 trends into the context of industry lobbying for the past 20 years dating back to 2004. While in an earlier report on oil spending I used the raw data on fossil fuel spending from the filings on the California Secretary of State’s website, the newsletter used a slightly different methodology.

“Topping the lobbying spending charts in 2023 was Chevron, the second biggest oil producer in the state and the leading crude oil refiner. Trailing at number two: its trade association, the Western States Petroleum Association (WSPA),” wrote Sunstone Strategies.

“The two combined spent $18.1 million in 2023 — more than 71% of the industry’s total $25.4 in expenditures for 2023. Aera Energy, California’s top oil producer and a former joint venture of Exxon Mobil and Shell, placed in a distant third for 2023 lobbying spending,” they said.

However, in the fourth quarter, “WSPA and Chevron exchanged the number one and number two spots as the top lobbying spenders. Their expenditures totaled $2.8 million, accounting for over 60% of Big Oil’s quarterly spending total. Trailing in third was ExxonMobil, spending over $243,000 in lobbying for the quarter.”

The report also revealed that the state’s five major refiners, including Valero, PBF Energy, Marathon Petroleum, and Phillips 66, spent over $2.5 million on 2023 lobbying and influence activities.

More recently, the Last Chance Alliance reported in June that the oil industry withdrew their deceptive referendum to overturn health and safety protections around oil and gas wells after spending nearly $61 million on their effort: www.dailykos.com/...

Since 2009 I have documented how WSPA and the oil companies wield their power in 8 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) sponsoring awards ceremonies and dinners, including those for legislators and journalists; (7) contributing to non profit organizations; and (8) creating alliances with labor unions, mainly construction trades. 

For more permitting information, see: NewsomWellWatch.com, which is run by the groups and maps all California oil wells.