(CN) — A voter-approved measure to halt new oil and gas drilling in unincorporated areas of Monterey County in Central California, and prohibit some extraction methods at current wells, suffered its third consecutive defeat in court Thursday after the California Supreme Court said it was preempted by state law.
The state's highest court upheld the previous findings by a court of appeals and a trial judge that two portions of Measure Z, which Monterey's voters passed in 2016, are in conflict with the state's authority to regulate oil and gas drilling operations.
A third component of the ordinance that banned fracking wasn't at issue in the litigation because none of the oil and gas operations in the county uses this technology or intends to do so.
"By providing that certain oil production methods may never be used by anyone, anywhere, in the County, Measure Z nullifies — and therefore contradicts — section 3106’s mandate that the state 'shall' supervise oil operation in a way that permits well operators to 'utilize all methods and practices' the supervisor has approved," Associate Justice Martin Jenkins wrote in the ruling, referring to a section of California's Public Resources Code.
Kevin Bundy, an attorney for Protect Monterey County, the organization that promoted the ordinance and took on its defense after oil companies sued and the county bowed out, said the group was disappointed by the ruling.
The court's decision, Bundy said, was narrow and turns entirely on language specific to Measure Z, including language limiting wastewater injection into wells. It doesn't however completely tie local government's hands, Bundy said, because the court acknowledged that communities may regulate the location of oil and gas operations through their traditional zoning powers.
"It’s unfortunate that a couple of sentences from a 1961 statute prevented Measure Z from taking effect," Bundy said.
"The people of Monterey County voted overwhelmingly for these vital protections against dangerous oil production. Californians suffering from extreme heat, destructive wildfires, and health problems from asthma to cancer know the urgency of phasing out deadly fossil fuels."
Jeffrey Dintzer, an attorney for Chevron, one of the oil companies that challenged the local ordinance, said that the company was pleased the state's Supreme Court ruling brought an end to seven years of litigation and appeals.
At a hearing in May before the California Supreme Court, Bundy had argued that the appellate court finding most of Measure Z was preempted by state law had shattered the balance between local and state authority to regulate oil and gas exploration at a local level.
Noting that cities in California have historically been able to prohibit local oil and gas drilling within their jurisdiction, and that the state Legislature has acknowledged this authority, Bundy argued that the industry was now trying to overturn this well established sharing of power.
"If that is what they want, they should ask the Legislature, not this court," Bundy told the justices.
Both Jenkins and Associate Justice Joshua Groban were skeptical at the hearing, though, that the two invalidated components of Measure Z didn't contradict the state's regulatory authority because it would leave the state supervisor with no other choice when it came to allowing, for example, injecting ground water into wells to extract the oil.
"What does this leave to the discretion of the supervisor with respect to this method of carbon extraction?" Jenkins asked. "It's off the table."
Bundy countered that there would be plenty of other issues for the state supervisor of drilling activity to weigh in on, such as technical questions pertaining to the materials and pressure used to operate the wells.
Ted Boutrous Jr., representing Chevron and the other oil companies that challenged Measure Z at the May hearing, called it an extraordinary and unique prohibition on activity that the state has expressly allowed. The state mandates that the supervisor, Boutrous argued, permits drilling activity that's industrially sound as part of its energy policy.
The issue of injecting wastewater in the form of steam in the wells wasn't an abstract concern, he said, because the San Ardo Oil Field in Monterey County — co-operated by Chevron and one of the larger oil fields in California — has been using this technology because that's the only way to extract the oil. Much like ketchup, the substance is viscous and won't flow easily under normal conditions.
"Measure Z went too far," Boutrous said. "It's not just a zoning ordinance, but an attempt to suffocate oil and gas production under the guise of an anti-fracking ordinance."
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