BILL ANALYSIS ----------------------------------------------------------------- | | | SENATE COMMITTEE ON NATURAL RESOURCES AND WATER | | Senator Fran Pavley, Chair | | 2009-2010 Regular Session | | | ----------------------------------------------------------------- BILL NO: AJR 3 HEARING DATE: June 22, 2010 AUTHOR: Nava URGENCY: No VERSION: May 26, 2010 CONSULTANT: Katharine Moore DUAL REFERRAL: Environmental QualityFISCAL: Yes SUBJECT: Offshore oil drilling. BACKGROUND AND EXISTING LAW The California Coastal Sanctuary Act of 1994 imposed a moratorium on any new lease for the extraction of oil or gas in state waters unless the President of the United States finds a severe energy supply interruption has occurred and orders a release from the Strategic Petroleum Reserve, or unless the Governor determines that new oil and gas production will significantly contribute to the alleviation of that interruption. There are approximately three dozen extant leases currently in federal waters off the California coast. A similar moratorium, the Offshore Leasing Moratorium, existed in federal law for 27 years, but was repealed in 2008 during a period of high oil prices and leasing was expected to re-start in July 2010. Congress subsequently blocked this plan in 2009. President Obama announced his Administration's commitment to continue the ban on offshore oil drilling along the entire Pacific Coast in early April 2010. At the same time, President Obama announced that other selected territorial waters of the United States would be opened to offshore oil development to meet the twin policy goals of developing new economic growth and improving energy security by reducing the dependence on imported oil. On April 20, 2010, the Deepwater Horizon drilling rig exploded, and subsequently sank due to a well-head blowout at a depth of approximately 5,000 feet in the Gulf of Mexico with the loss of 11 crewmembers. Although estimates of the exact amount of oil released already to the environment vary, the on-going spill is considered to be the largest in American history - easily exceeding the 250,000 barrels spilled by the Exxon Valdez in 1989 - and among the largest ever world-wide. The oil slick currently covers approximately 2,500 square miles of ocean 1 surface and substantial sub-surface plumes of oil have been identified. The impacts of the oil spill on the Gulf ecosystem are severe with significant and on-going damage to and loss of habitat and wildlife. Economic disruption to the coastal states and their tourism and fishing industries is expected to be on the order of billions of dollars. PROPOSED LAW Requests that Congress pass pending legislation to protect the Pacific Coast from any new offshore oil drilling, and communicates the Legislature's opposition to the proposed expansion of oil and gas drilling off the Pacific Coast. The resolution also expresses opposition to any federal energy policies and legislation that would weaken California's legitimate state role in siting energy facilities on state lands. 2 ARGUMENTS IN SUPPORT According to the author, new offshore oil drilling off the coast of California will pose a significant risk to California's coast and the coastal-dependent tourist economy. The author also contends that new off shore oil drilling will not lower gas prices for consumers. Given the consideration of new offshore oil drilling that at least recently existed at the federal level, the author believes that a strong statement from the California Legislature in opposition to lifting the moratorium on offshore oil drilling is necessary. According to the author, at least 187 large oil spills have occurred between 1981-2005 on the outer continental shelf. The author and other supporters contend that oil spills create numerous risks to wildlife, and discharge many toxics into the marine environment in the normal course of these activities. The supporters contend that, on average, 180,000 gallons of substances such as benzene, arsenic, mercury, and lead, per well, are released from each well. A spill off the coast of California could jeopardize the $93.8 billion tourism (2006 estimate) and over $2 billion commercial and recreational fishing industries. ARGUMENTS IN OPPOSITION None received SUPPORT Environment California (sponsor) Oceana Sierra Club California OPPOSITION None Received 3