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State takes credit for issuing 23% fewer oil drilling permits

south belridge1 (copy)

This is a view of oil production in Kern County's South Belridge Oil Field, one of the most productive in California.

California issued sharply fewer oil drilling permits last year while approving a lot more plugging and permanent sealing of wells, according to recent data the state said reflects increased enforcement and new policies in Sacramento.

The California Geologic Energy Management Division said about 23 percent fewer permits, year over year, were given out to drill new oil and gas wells of any kind, for a 2020 year-end total of 1,962.

At the same time, a record 3,238 permits were issued last year to abandon oil and gas wells in the state, CalGEM stated. That's almost 16 percent more than 2019's tally.

It was unclear how much the year-over-year shifts could be attributed to a pandemic-related drop in the price of oil, which led to layoffs in Kern, the heart of California oil production. But the state asserted its regulatory influence was a significant factor in changing permit totals.

"New state policies, combined with increased enforcement by CalGEM, are driving the increase in oil and gas operators permanently removing wells from operation," CalGEM said in a news release last week.

The data amounted to an update on efforts by the administration of Gov. Gavin Newsom to reduce in-state petroleum production, a priority denounced by industry and local government leaders but welcomed by environmental activists pushing for even stronger action against climate change and pollution.

The CEO of the California Independent Petroleum Association trade group, Rock Zierman, pointed out in an email Monday that market conditions led to a drop in demand for oil last year.

He also noted that last year California imported a little more than two-thirds of its petroleum supply from foreign sources that are lightly regulated in comparison with the Golden State.

"California production data for the last two years shows in-state production met only about 32% of Californians’ demand," he wrote. "Critics would rather shut down highly regulated production that benefits our economy and instead rely more upon imported oil."

A staff attorney for the Center on Race, Poverty & the Environment said by email the state's lower permit totals "are not surprising" in light of industry uncertainty and lower demand for oil because of COVID-19.

Attorney Daniel Ress also said the numbers do not reflect more regulations. He noted Newsom has fallen behind his stated schedule for introducing a standard buffer zone between petroleum sites and sensitive areas like homes and schools.

"Every day frontline communities here in Kern have to live with the significant health impacts that come with living near oil and gas drilling because of CalGEM's failure to act," Ress wrote.

Cesar Aguirre, community organizer for the Central California Environmental Justice Network, said by email petroleum appears to be on the decline and that the state should look to diversify its energy supply.

"We must choose the path that will make Kern a leader in cleaner energy statewide by diversifying our economy and helping reverse the damage to community health in Kern," Aguirre wrote. "We should not be dependent on an industry that is a danger to public health."

CalGEM said total permits for the controversial oilfield technique known as fracking reached a new low of 83 in 2020 — 62 percent less than the state's yearly average since 2016. The agency last year denied a record 57 fracking permits, it stated.

Meanwhile, the number of new drilling projects actually undertaken in 2020 plummeted. CalGEM reported the total dropped more than 87 percent year over year to settle at 138 wells.

CalGEM, caught for years between industry demands for faster issuance of permits and environmentalists' calls for greater regulatory scrutiny, noted California's in-state oil production has declined 68 percent below its 1985 peak.

It said new drilling permits for cyclic-steam wells declined 90 percent in 2020 and that permits to drill a steam-flood well were down 77 percent. The number of permits issued to rework existing wells was down 20 percent from 2019's tally, CalGEM stated.