MONTEREY, Calif. (CN) – Chevron, energy companies and a school district sued Monterey County this week, challenging a law voters approved on Nov. 8 that bans hydraulic fracturing and limits oil production in the coastal county.
Two lawsuits Wednesday asked the Superior Court to declare that the voter-approved initiative, Measure Z, attempts to pre-empt federal and state laws on oil and gas production and takes property without proper compensation, in violation of the federal and state constitutions.
Chevron, Key Energy Services, Ensign United States Drilling, San Ardo Union Elementary District and five people filed one complaint. Aera Energy, which leases mineral rights for more than 2,500 acres in the San Ardo Field in south Monterey County, about 30 miles north of Paso Robles and 20 miles south of King City, filed the other complaint.
Monterey County Counsel Charles McKee said he’d expected lawsuits, and noted their probability while writing the analysis of Measure Z that appeared in the voters’ guide. These two, he said, probably won’t be the last.
“We knew about the potential for lawsuits as soon as Measure Z qualified for the ballot and we intend to defend it vigorously,” McKee said. “If a measure is valid on its face, and as far as we can tell this is, then we have an obligation to defend it.”
The San Ardo Field was discovered in 1947. It is the 13th largest oil field in California and the 46th largest in the United States. The oil is “heavy” and has the consistency of ketchup, but by injecting steam it is heated and extracted more easily.
Chevron is the largest operator on the site, producing about 11,000 barrels of oil per day. An oil well at the San Ardo Field typically draws about 10 to 20 times as much water as oil, and in 2006 Chevron built a reverse osmosis facility to purify 45,000 barrels of water a day. About 75 percent of the water is sent to recharge basins, where it slowly drains back into the aquifer through a series of constructed wetlands. The remaining water is concentrated brine and is pumped deep underground.
Measure Z, presented to voters as a ban on fracking and risky oil operations to protect the region’s water, passed with 56 percent approval on Nov. 8. It amends Monterey County’s land use plans to prohibit fracking and other procedures deemed a danger to groundwater. It also prohibits drilling new oil and gas wells.
But according to Chevron’s lawsuit, fracking is not even used in Monterey County, and the impacts of Measure Z are much broader. It says the initiative’s gradual phase-out, prohibition of wastewater injection and rules for storing it would kill its operations, and the ban on new wells would reduce production by about 20 percent a year.
“If the county prevents the drilling of additional wells, the yield from the current wells will continually decrease until oil and gas production at the San Ardo Oil Field will no longer economically viable,” Chevron says in its complaint.
Should that happen, San Ardo Union Elementary School District stands to lose a lot of money. That’s why it joined the lawsuit, said Superintendent Catherine Reimer.
“There’s a lot of poverty in the area,” Reimer said.