Florida escaped from President Trump’s plan to sell new offshore oil drilling leases because it has a Republican governor who called in a favor. There was also the fact that Trump owns ocean-view property there.
But not to worry, California. This state has the California Lands Commission. This usually obscure agency rescued California almost 11 years ago, the last time part of California’s coast was as seriously threatened as some areas now feel. Both Gov. Arnold Schwarzenegger and the federal administration of President George W. Bush then avidly wanted a floating platform off the coast of southern Ventura County to bring liquefied natural gas (LNG) into California and commit consumers to pay billions of extra dollars each year for cooking and heating.
It never happened thanks to the Lands Commission, a three-person board with control over the state’s tidelands out to three miles offshore.
And today it’s largely because of that same commission that Trump’s plan draws only lukewarm interest from the oil industry.
Almost 11 years ago, on a 2-1 vote with then-Lt. Gov. John Garamendi and then state Controller John Chiang, both Democrats, voting no and Schwarzenegger’s representative voting yes, the LNG proposal died despite a multimillion-dollar effort from the Australian energy giant BHP Billiton. California consumers were spared at least 30 years of depending on high-priced foreign energy.
Environmentalists and consumer advocates insisted California didn’t need LNG, just as they now say offshore oil is not needed. They proved right, as fracking and shale deposits in the Rocky Mountain region created a surplus that American companies are now exporting.
The Lands Commission didn’t actually ban LNG then, just as it can’t ban new offshore wells today. It did, however, forbid pipelines carrying the gas from crossing tidelands and beaches. It would almost certainly do the same with pipelines carrying oil from offshore derricks.
For even if the federal government sells oil leases in federal waters more than three miles offshore, the Lands Commission would still have to let oil companies connect to onshore transport centers, refineries or other oil holding stations.
Such permits won’t happen as long as California remains a Democratic-dominated state. Whoever succeeds current Lt. Gov. Gavin Newsom next year will serve on the Lands Commission. So will Controller Betty Yee and a representative of the next governor.
There are ways other than pipelines to bring the oil ashore, or it could be exported straight from platforms. Tankers could bring oil to refineries here and abroad, for one example. But that would add vastly to the cost of drilling, making new leases unattractive as long as the price of oil remains well below $100 a barrel. Prices this month have hovered just above $60 per barrel.
Meanwhile, the odds of the Lands Commission voting in the immediate future to facilitate offshore oil are infinitesimal. Adding new drill rigs to the coastal scene has been anathema here since the infamous Santa Barbara Channel oil spill of 1968. The beach-fouling, wildlife-killing Refugio State Beach spill northwest of Santa Barbara in 2015 reinforced that already strong opposition.
So new oil leases off California are not very attractive. Oil companies also know the available oil isn’t exactly copious. Known reserves are estimated sufficient to power the country for about 20 days at the most. That’s another reason there’s been little interest from the industry for the last few decades.
And there’s an unspoken industry fear of political backlash. If they do anything as radically unpopular and environmentally irresponsible as drilling new offshore wells, oil companies fear they could spur consequences from politicians.
Yes, Gov. Jerry Brown has talked a good game on conservation and climate change and renewable energy. But his administration has also issued 238 new drilling permits in existing leases since 2012, the number of active oil and gas wells rising 23 percent in the state since Brown became governor. Most of those new wells are on shore.
The expansion could quickly end if the next governor is unfriendly to Big Oil, one possible consequence of new offshore leases.
But the base of the state’s ability to resist new offshore drilling still resides in the Lands Commission, and there is every reason to believe it would act the same now as when it stymied LNG.
Email Thomas Elias at [email protected]