California’s Monterey county loses bid to restart oil drilling ban

Chris Dolmetsch 10/14/2021

(Bloomberg) --A coastal California county’s attempt to curb new oil and gas development suffered another blow when an appeals court upheld a ruling striking down a ban on new wells and fracking.

Monterey County voters in November 2016 passed a measure prohibiting land use in support of new oil and gas wells and fracking activities in unincorporated areas. Companies including Aera Energy LLC and Chevron Corp. sued, saying the ordinances were preempted by state and federal law.

After a trial, a state court judge sided with the companies, striking down the measures as a “pretextual attempt” by the county “to do indirectly what it cannot do directly.” On Tuesday, an appellate panel in San Jose upheld the decision, saying that the state has authority over all practices that “increase the recovery of oil and gas.”

“The mere fact that some local regulation of oil and gas drilling is within a local entity’s police power does not resolve the question of whether a particular local regulation is preempted by a particular state law,” the appeals court said. “If a local regulation conflicts with a state law, the local regulation exceeds the local entity’s power.”

Governor Gavin Newsom placed a nine-month moratorium on fracking in 2019 after new wells increased under his tenure and it was discovered agency staffers had industry connections. He sought a statewide ban. But legislation to prohibit the activity died in committee in April.

The appeals court case is Chevron USA v. County of Monterey, H045791, California Court of Appeal, Sixth Appellate District.

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