Mike McGuire bill seeks to close coastal drilling ‘loophole’

Environmentalists are applauding North Coast Sen. Mike McGuire’s move to close an arcane loophole in a 21-year-old state law that could allow new offshore oil development, exposing the beaches and the economy of California’s 840-mile coast to what he called the “devastating impacts” of an offshore oil spill.

McGuire’s bill, titled the California Coastal Protection Act of 2015, had 10 co-authors - including the four other state legislators representing Sonoma County - and support from about two dozen environmental groups, including the Sierra Club, Environmental Defense Fund and Union of Concerned Scientists.

“New offshore oil leases are a real possibility in California,” said McGuire, a freshman Democrat from Healdsburg. The oil industry’s attention in recent years has focused on the Tranquillon Ridge off the Santa Barbara County coast, he said.

A devastating oil spill, on par with the 1969 spill in Santa Barbara, would jeopardize the coast’s $40 billion contribution to the state economy, including nearly 500,000 jobs, and could trigger a slight recession in California, he said.

“It’s unconscionable to think that there is a loophole that could lead to additional drilling in state water,” McGuire said. “It poses too great a risk.”

Citing that risk, the state lawmakers enacted the California Coastal Sanctuary Act of 1994, intent on banning oil and gas development in state waters, which extend out to 3 miles from shore. But a provision of that law - deemed a loophole by critics - allows new energy leases if officials determine that state oil or gas deposits are being “drained” by wells in adjacent federal waters.

Richard Charter of Bodega Bay, a veteran coastal protection advocate, said that can occur when an offshore well on federal undersea lands taps an oil reservoir that extends under state waters.

California has no control over federal energy leasing, and even though there are no West Coast leases in the Bureau of Ocean Energy Management’s current plan, nor the 2017-2022 plan now being formulated, that could change under a future president, he said.

House Republicans passed several bills last year requiring the Obama administration to open Southern California tracts to offshore drilling, and each was rejected by the Democrat-controlled Senate, said Charter, a senior fellow with the Ocean Foundation. A Republican energy bill this year “could reactivate the threat” with the GOP holding a Senate majority.

“The loophole needs to be closed now,” Charter said. It’s going to bite you in the butt if you don’t close it.”

Rachel Binah of Little River in Mendocino County recalled testifying in Sacramento in support of the 1994 law, which was co-sponsored by former North Coast Assemblyman Dan Hauser.

“My fear has always been that if federal waters were leased, the state was all up for grabs,” said Binah, an anti-drilling activist and Democratic National Committee member.

Since the presidential and congressional moratoriums on drilling in federal waters lapsed in 2008, well over half of California’s coast is open to energy development, Charter said. Oil and gas drilling is permanently banned in two marine sanctuaries that stretch 350 miles from Cambria in San Luis Obispo County to Manchester Beach in Mendocino County, but an oil spill in Humboldt County would likely foul the Sonoma Coast, Charter said.

Tupper Hull, a spokesman for the Western States Petroleum Association, disputed the idea that the 1994 law includes a loophole. The provision regarding oil draining from state lands was “deemed an appropriate exemption” in the law, he said, intended to “protect California’s vital energy resources.”

Royalty payments to California for oil produced on state lands, mostly offshore, exceeded $500 million in 2012, an important state revenue source, Hull said.

But California would be compensated for any oil drawn from its tidelands by a well on federal lands, Charter said. The loophole, which allows California to capture its own oil from wells built closer to shore, is therefore unnecessary, he said, adding that the near-shore wells would pose a greater threat of coastal pollution.

State Sen. Hannah-Beth Jackson, D-Santa Barbara, proposed a bill to close the loophole last year, which sailed through three Assembly committees before losing, 36 to 30, on the Assembly floor with several Democrats opposed.

Jackson said her bill died “due to significant opposition from the oil industry” and that McGuire’s bill, with her among the co-authors, “faces a similar uphill battle.”

Hull said the oil industry association is following McGuire’s bill but has not taken a position on it.

The bill, SB 788, is scheduled for a hearing before the Senate Natural Resources and Water Committee on Tuesday.

Co-authors include Sen. Lois Wolk, D-Davis, and Assemblymen Marc Levine, D-San Rafael; Jim Wood, D-Healdsburg; and Bill Dodd, D-Napa.

You can reach Staff Writer Guy Kovner at 521-5457 or guy.kovner@pressdemocrat.com. On Twitter @guykovner.