BILL ANALYSIS AJR 3 SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator S. Joseph Simitian, Chairman 2009-2010 Regular Session BILL NO: AJR 3 AUTHOR: Nava AMENDED: May 26, 2010 FISCAL: No HEARING DATE: June 28, 2010 URGENCY: No CONSULTANT: Amber Hartman SUBJECT : OFFSHORE OIL DRILLING SUMMARY : Existing law , under the California Coastal Sanctuary Act of 1994, sets a moratorium on any new lease for the extraction of oil or gas in state waters unless the President of the United States has found a severe energy supply interruption and has ordered a release from the Strategic Petroleum Reserve, or unless the Governor finds that new oil and gas production will significantly contribute to the alleviation of that interruption. This bill : 1) 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. 2) Expresses opposition to any federal energy policies and legislation that would weaken California's legitimate state role in siting energy facilities on state lands. COMMENTS : 1) Purpose of Bill . According to the author, "In 1982 Congress instituted an offshore drilling moratorium for California and beyond. Congress had voted to reauthorize this moratorium as part of the Interior Appropriations Bill every year since then. However during the summer of 2008, oil companies used the high cost of oil to pressure Congress into repealing the 27-year old moratorium. The AJR 3 Page 2 ongoing spill in the Gulf of Mexico had demonstrated that, notwithstanding industry claims to the contrary, there are substantial risks inherent in offshore oil drilling that cannot be fully mitigated. Allowing new offshore oil development and exploration would pose a significant risk to our state's coastal environments and will not lower gas prices for consumers. It is extremely important that the State of California express our strong support for efforts to protect the California Coast from expanded offshore drilling." 2) Deepwater Horizon . 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 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. 3) Pending federal legislation . The West Coast Ocean Protection Act of 2010 (HR-5213) has been introduced in the U.S. House of Representatives by Congressman Garamendi. This bill would amend the Outer Continental Shelf Lands Act to prohibit the Secretary of the Interior from issuing a lease for the exploration, development, or production of oil or natural gas in any area of the outer Continental Shelf off the coast of California, Oregon, or Washington. 4) Federal back-and-forth . The Offshore Leasing Moratorium existed in federal law for 27 years, but was repealed in 2008, under the President G.W. Bush administration, during a period of high oil prices and leasing was expected to re-start in July 2010. Congress subsequently blocked this AJR 3 Page 3 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. 5) Related legislation . Similar resolutions have been introduced in previous sessions: AJR 51 (Nava) Chapter 146, Statutes of 2008, and AJR 55 (Nava) Chapter 137, Statutes of 2006. SOURCE : Environment California SUPPORT : Oceana OPPOSITION : None on file