American Oil and Gas Reporter - May 2020 - 76

IssuesUpdate: California Independent Petroleum Association

Industry's Economic Role
Looming Even Larger
By Danny Boyd
Special Correspondent
BAKERSFIELD, CA.-Despite the
long list of challenges facing members
of the California Independent Petroleum
Association, Chairman Steve Layton expresses optimism that the public and policymakers may have a better appreciation
of the oil and gas industry's status as a
vital part of the Golden State's economy
after the coronavirus pandemic subsides
in the coming months.
"The oil and gas industry remains a
critical sector during this pandemic and,
despite the challenging times we face,
we will be an important part of California's
economic recovery," says Layton, president
of E&B Natural Resources in Bakersfield.
"Even during this economic crisis, we
are putting people to work and generating
significant taxes to fund desperatelyneeded public programs."
In the meantime, armed with a record
of success, CIPA is marching forward at
the statehouse, courthouse and in the
court of public opinion to counter antiindustry legislation and proposals, while
eying ways to help revise a Kern County,
Ca., permitting ordinance struck down
by a state appeals court, he says. "We
have a strong message to share and, now
more than ever, we are optimistic that
more people are seeing the benefits of
our product including materials used in
hospitals to save lives," Layton reflects.
New Legislative Priorities?
Among the hot topics for producers is
an amended version of AB 345, which
passed the California State Assembly in
January and deals with oil and gas facility
setbacks, CIPA Chief Executive Officer
Rock Zierman notes. He predicts the Senate is likely to focus on other matters
when lawmakers convene in May.
Both chambers probably will concentrate on meeting the constitutional obligation of passing a state budget by June
15 and providing pandemic relief instead
of devoting time and attention to a measure
pushed by extremists seeking to put CIPA
members out of business, he says. "A lot
76 THE AMERICAN OIL & GAS REPORTER

of people in the assembly will realize
now is not the time to put more people
out of work and mess with things that
are not critical in ways that will have adverse impacts," Zierman says.
The initial version of AB 345 by Assemblyman Al Muratsuchi, D-Torrance,
sought to ban oil and gas extraction facilities
within 2,500 feet of schools, playgrounds
and other public places with children and
require protective measures such as fencing
around nearby hospitals, residences and
other buildings. However the bill was
changed so that the setback would be
"considered" instead of required when it
came to light that the original language
would halt most of the state's oil production,
especially in the LA Basin, Zierman says.
Under the initial proposal, sites sufficiently distant from existing residences
and other pertinent facilities also would
preclude additional development, which
could limit construction of affordable
housing in Southern California, an area
in desperate need of it, he considers.
Should the more draconian version
become law, producers will have to consider suing the government for illegal
taking, Zierman reflects, which could
leave the state on the hook to pay billions
in damages.
"It is our understanding that the legislature may limit itself to COVID-19, homelessness, budget and wildfire prevention
when it returns," Layton suggests.
Kern County Considerations
In the meantime, CIPA continues to
assess the ramifications of an unfavorable
court decision on permitting in Kern
County, Zierman reports. After an unsuccessful appeals court rehearing in
March, CIPA is working with Kern County
to revise an ordinance and accompanying
environmental impact report prepared for
the county's 2015 adoption of an ordinance
to streamline and administer permitting
for new oil and gas wells, he says.
A Feb. 25 decision by the Fifth Appellate District Court invalidated the ordinance because of what Zierman describes
as narrow issues in the EIR.
Reviewing the conditions that led up to

the lawsuit, Zierman notes that, until about
five years ago, the Division of Oil, Gas,
and Geothermal Resources, now the California Geologic Energy Management Division, issued permits for new oil well
drilling in Kern County, home to 70% of
California's oil output. However, industry
opponents kept challenging regulatory decisions in court and DOGGR was doing
little to defend itself, he recounts. CIPA
and other industry allies successfully pushed
for Kern County to serve as the lead permitting agency, which entails performing
the EIR to assess the environmental ramifications of new drilling during the next 20
years in a document that cost $17 million
to produce, he says. With the court decision,
the county must perform a major review.
"That is going to wreak havoc in Kern
County because the whole process has
been totally changed, where the county
does the permitting and has a full-time
staff that does nothing but review permits,"
he describes.
Gas Ban Pushback
CIPA is standing with industry groups,
including the Central Valley Coalition for
Energy and Jobs, which was founded to
counter anti-industry opponents and drew
over 1,000 oil field workers to a meeting
with the Kern County Board of Supervisors,
which included representatives from the
governor's office to illustrate California's
need for a strong, job-generating oil and
gas industry, Zierman says. "It was a
pretty powerful day. I think they were
impressed by the diversity of voices that
supported our industry," he says. "I think
you will see more of that going forward."
The association also supports a coalition
that is pushing back against the natural
gas bans that some localities are enacting,
he says. To educate lawmakers, the affiliated California Natural Gas Producers
Association has initiated a coalition with
the California Restaurant Association,
California Building Industry Association,
Southern California Gas Company, the
California Natural Gas Vehicle Association,
the California Business Property Owners
Association and the California Business
Roundtable, Zierman points out.
American Oil and Gas Reporter - May 2020

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