Ventura County oil wells drilled under old permits need environmental review
Opponents argue changes will deter investment
Kathleen Wilson
Ventura County supervisors this week imposed modern review standards for new oil wells drilled under decades-old permits that have been exempt from a landmark state law intended to protect the environment.
The county government granted the so-called "antiquated" permits in the oil-rich unincorporated areas from the late 1940s to the mid-1960s. Many had no expiration dates or requirements for the maximum number of wells or their exact locations.
The permits were approved before the sweeping state law called the California Environmental Quality Act or CEQA was passed in 1970 and were not subject to its provisions for study of a project's impact on air, water and other natural resources.
A county report shows 80 of the antiquated permits remain active covering the operations of 2,800 active and idled wells.
But under the Board of Supervisors' 3-2 vote Tuesday, the county established what's described as a single, consistent permitting and environmental review process for all new oil and gas development regardless of the age of the original underlying permit.
New oil facilities must be approved by a decision-maker who can set conditions to address environmental issues versus being cleared in an over-the-counter approval.
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The higher level of review would be required for installation of new wells, tanks and other oilfield facilities and the re-drilling or deepening of existing wells.
Supervisors Steve Bennett, Linda Parks and John Zaragoza voted for the amendments to county zoning laws. Supervisors Bob Huber and Kelly Long voted no.
Whether the decision will be put to a court test is still to be determined. Seven commercial interests have already sued the county over a new general plan with tightened restrictions on the oil industry.
'Clear taking'
Property owners argue they have constitutional and vested rights entitling them to the standard of review under which the permits were granted. A spokeswoman for the California Independent Petroleum Association reiterated that position at a public hearing the board held Tuesday in Ventura.
"We continue to believe this is a clear taking of an individual's constitutional rights," said spokeswoman Jennifer Rivera.
In an opinion issued in 2014, the county's then chief civil attorney indicated it takes a high bar to overcome vested rights. The county can impose "new, narrowly tailored conditions on these permits only when a compelling public necessity existed, such as danger, harm or public nuisance, or if significant violations exist," County Counsel Leroy Smith wrote.
Then last year the board requested a new legal analysis after questions arose over dozens of wells that Peak Oil wanted to drill into tar sands beneath the Fox Canyon Aquifer, a key source of drinking water.
In his report back to the board, Smith said his earlier opinion referred to vested rights for existing oil facilities and that new wells could be subjected to a higher level of scrutiny.
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The Board of Supervisors directed attorneys to return with land-use amendments with Smith's new interpretation "as quickly as possible." That is what the split board approved Tuesday.
The decision comes with two supervisors on the winning side — Bennett and Zaragoza — retiring under term limits but appears unlikely to be overturned by the new board that will be seated in January.
County officials say a vested right exists if a new regulation would prevent construction or use of petroleum facilities that are authorized in an existing permit. Holders of antiquated permits do not typically have those rights because the permits don't show the scope and composition of the oil facilities they intend to build, officials said.
Business advocates say the county's position conflicts with Smith's earlier opinion. But acting County Counsel Michael Walker said that opinion was issued to address a different question — whether the Board of Supervisors could do anything about hydraulic fracturing. It cannot be applied to the question of whether a higher level of review is required for new oil facilities sought by holders of antiquated permits, he said.
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Heavy interest
Hundreds of people commented on the proposal over Zoom and by email.
Opponents predicted the loss of tax revenues and business investment, while supporters who have been seeking the revision for more than five years praised the decision.
"Antiquated permits never expired," Liz Beall, executive director of Climate First: Replacing Oil & Gas, said in a statement. "They allow for indefinite expansion without regulation. So long as they were allowed, they made Ventura County's modern oil and gas regulations essentially meaningless."
Rebecca August, advocacy director for Los Padres ForestWatch, urged the board to close "a loophole."
The exception allows some oil companies to skirt laws that protect "public health, precious water supplies, public lands and the environment, " she said.
Nancy Lindholm, CEO of the Oxnard Chamber of Commerce, said the permit changes will deter business investment. They send the message that the county will change the rules in the middle of the game for anyone, she said.
The most dramatic testimony came from royalty recipients who said they feared losing the payments that help their families survive. A spokeswoman for Aera Energy said charities would suffer as well, asserting that the Wood-Claeyssens Foundation had given more than $175 million to charity from petroleum royalties in the past nine years.
"These funds will go away if you pass this ordinance," spokeswoman Michele Newell told the board.
Rules not retroactive
County Planning Director Dave Ward countered that none of the amendments would affect existing operations or royalties. "This is not retroactive," he said. "This is talking about new oil and gas development going forward."
But Newell stuck by her comments in a brief interview Thursday.
She said the zoning amendments affect maintenance of oil fields as well as new wells. Re-drilling, deepening and relocating wells is necessary to ensure petroleum resources remain accessible, Newell said. Without that maintenance, petroleum fields will diminish and the royalties will dry up, she said.
Oil companies can still apply for permits to do the work under the board's decision, but they will have to meet the higher standard of review and could need a vote of the board to proceed. Newell and others say the oil industry is already subject to review from dozens of local, state and federal agencies.
The board also directed planners to return in a year with amendments for another series of land-use changes affecting the oil and gas industry.
One would limit the duration of oil and gas permits to 15 years, rather than the often-seen length of 30. The others involve increasing the $10,000 bond requirement for multiple wells, imposing insurance requirements and adding measures for permanently plugging and restoring wells that have been idle for 15 or more years so taxpayers don't have to bear the cost.
Bennett, Parks and Zaragoza voted yes on the direction, while Huber and Long dissented. The board split on the same lines in its approval of the 2040 county general plan, which dramatically expanded setbacks between new wells and homes and schools. The plan also curtailed flaring of gases and trucking of oil and produced water.
Kathleen Wilson covers the Ventura County government, including the county health system, politics and social services. Reach her at kathleen.wilson@vcstar.com or 805-437-0271.