The State Lands Commission, which helps regulate and audit oil operations in the state, told Long Beach on Friday that its plan for future production needs to better account for things like health hazards to communities, sea level rise and the volatile oil market before the plan is accepted.
How it will affect oil operations in the long term is unclear, but in the immediate future, oil production is expected to be unchanged by the commission’s vote, according to the city department that oversees oil production in Long Beach.
Long Beach submitted its plans to the state in late March, just days before a regulatory deadline.
The plan drew criticism from community activists who alleged the city was trying to approve new wells in areas of the city that could soon be barred from new oil production under a proposed state law. Senate Bill 1137, which is on hold due to a statewide referendum that put the issue on the November 2024 ballot, would prohibit new oil production within 3,200 feet of homes, schools, parks and other sensitive areas. The bill was one of the issues the commission said the city needed to account for in its plan; two of the city’s oil production islands (Grissom and White), as well as some operations near the port, would be affected by the law.
Micaela Wiemer, a senior attorney with the commission, told commissioners that the plan needed to show a better analysis of this law, which is expected to be approved by voters, as well as expand considerations of safety and environmental risks and more clearly define how oil operations will be affected.
Staff-recommended changes included requirements that the city better analyze the price volatility of the petroleum market, what types of water are being used in oil operations, how sea level rise could affect offshore operations and what the city intends to do with a power plant that is currently the primary user of natural gas produced alongside oil extraction.
“The power plant is the primary consumer of unit gas, and its shutdown would substantially affect unit economics and its ability to operate and produce oil because the unit will have no place to ship the gas that is produced. Without an outlet for the gas, the oil wouldn’t be able to be produced safely,” Wiemer told the commission.
Bob Dowell, the director of Energy Resources for Long Beach, said that the city is close to reaching an agreement on a new lease for the power plant, which is located in the port complex and provides about half of the power used by oil operations. However, if the deal falls through, the city will have options like reinjecting the gas or selling it to the city’s Utilities Department.
“The city’s natural gas providers don’t need it year-round, and you need a year-round solution,” Dowell said Monday.
This is the first time in nearly 60 years that the commission has asked the city for revisions, Dowell said, so the city is still working through how it will respond.
The staff-recommended changes will be straightforward, but some of the revisions added by commissioners, like tracking the state’s oil abandonment costs ($940 million in December) and requiring the department to work with the city’s Health Department to “fully account for the exposure” of minority communities, could take longer.
“That’s not typically something that an oil operators do,” Dowell said. “We don’t do social costs of oil operations exercises.”
Critics of the city’s plan have called it irresponsible because it increases oil production while the city has plans to phase out oil production by 2035, and SB-1137, which is on hold, would likely speed that plan up.
On Friday, commenters called for the city to phase out oil in the next five years, citing a recent report from the United Nations that said countries need to transition away from fossil fuels in the next 10 years to prevent the world from passing a catastrophic temperature threshold.
“We have to leave oil in the ground,” said Long Beach resident and activist Anna Christensen. “This is the only safe thing to do, globally.”
Brady Bradshaw, a senior oceans campaigner with the Center for Biological Diversity, said in an interview that it was “morally unjust” for the city to be approving new re-drills of wells within the 3,200-foot buffer zone, given the documentation of how it harms the health of those living nearby.
The new activity could also add to the cost of oil-well abandonment, Bradshaw said. The city estimates that it will cost $154 million to abandon wells after the city stops producing oil, and it’s set aside about $70 million. The city’s plan relies on continued oil production to fund well abandonment.
Bradshaw and others said that the plan should be subject to state environmental review laws, which could give the public more time to give feedback on the plan.
“It’s really important that this actually gets environmental review because there’s a potential for an oil spill, but even if the oil doesn’t spill into the ocean, the emissions end up in the air and in our bodies and create a lot of environmental harms and health harms,” Bradshaw said.
The changes are unlikely to impact oil production volume in the immediate future, but Dowell said that if 1137 goes into effect in January 2025, the city would start to see some big limitations.
The law would prohibit new wells from being developed within the buffer zones and limit existing wells by barring any changes or maintenance that requires a permit from the state. It would also tack on potentially costly monitoring requirements to track emissions generated from the wells.
The law could affect about half the city’s oil operations and cost it up to $20 million annually in lost oil revenue, according to the city.
Dowell said the city has not looked into what those costs are, but it could be part of what the city re-submits to the commission later this year. Operators would have until 2027 to comply with monitoring costs.
The city will rework its plan and submit it to the commission again in the coming weeks, but it’s unclear when or if the commission will have to vote on it again. Dowell said the plan needs to be accepted 45 days before the state’s fiscal year begins in July, but the commission isn’t expected to meet again until June, which could require a special meeting to be called sometime in May.
He doesn’t expect that there will be any city community meetings before it’s re-submitted.
“It’s all new territory for everyone, both the State Lands Commission and the city,” Dowell said.