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          in federal law for 27 years, but was repealed in 2008 during a  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