California News Pulse August 2023

Posted: September 28, 2023

California | August 2023

Field Overview

California, with both onshore and offshore oil production, has been supplying the U.S. with petroleum products since the 19th century. Operations are primarily focused around Kern County, the LA Basin, and the San Joaquin Valley, with the Midway-Sunset oil field in Kern County being the state’s largest.

State Drilling Statistics
Total Rigs in California- 5 (+3)
Total Rigs in the United States- 630 (-2)
Total U.S. Rigs 17.5% YTD

State Permitting Data
Permits Approved (10/1/2022 to 4/30/2023) – 3

State Highlights

California’s top court rules against Monterey’s ban on new oil and gas drilling

After a California Supreme Court ruled that it was preempted by state law to halt new oil and gas drilling in unincorporated areas of Monterey County in Central California, and prohibit some extraction techniques at existing wells, a voter-approved measure lost its third straight legal battle. The state’s highest court upheld earlier judgments by a court of appeals and a trial judge that two provisions of Measure Z, which Monterey voters approved in 2016, infringe on the state’s right to control oil and gas drilling operations. Since no oil and gas operations in the county currently use or plan to use fracking, the third provision of the ordinance that outlawed it was not in contention in the legal dispute.

Governor Newsom Appoints the First Director of New Oil Watchdog

The Division of Petroleum Market Oversight, a new office created by Governor Newsom’s gas price gouging law, will be led by antitrust prosecutor Tai Milder to look into price gouging and hold Big Oil responsible. Milder, a seasoned prosecutor and expert in antitrust, most recently worked as Counsel to the Assistant Attorney General for the U.S. Department of Justice’s Antitrust Division. He has successfully looked into and prosecuted businesses and people who tried to defraud customers by fixing prices, manipulating bids, and offering bribes. Milder also worked for the California Department of Justice, where she prosecuted oil and gas companies for violating state antitrust laws. The Governor Newsom’s gas price gouging law, which was approved during a special session of the Legislature earlier this year and went into effect in June, includes the new oil watchdog office as a key provision. The division will keep a close eye on the sector every day to spot any unusual or illegal activity, and it will report any legal violations, such as dishonesty in the sector or market manipulation, to the Attorney General for prosecution.