Governor’s Oil Actions Threaten California Coastline
Terry O’Day and Assemblymember Pedro Nava
California Progress Report
05/28/2009
The Teapot Dome Scandal of the 1920’s may seem like ancient history to most Californians. At the time, government officials were giving away drilling rights on public lands to oil companies in exchange for kickbacks and bribes. Today’s Californians are protected from both overt corruption as well as plain-old bad deals by independent agencies such as the State Lands Commission (SLC). Given increased scarcity of and demand on public resources, and the state’s perilous fiscal crisis, we should all breathe a sigh of relief.
Not so fast.
Governor Schwarzenegger’s austerity budget released just before the election included a strange and dangerous proposal to bypass the State Lands Commission’s public review of offshore oil drilling. Instead, the Director of Finance could override a vote of the three-member commission. It’s a strange proposal, since the Director of Finance is a member of the SLC, along with the Controller and Lieutenant Governor. So under the existing system, the Director needs only to convince one other member to carry any motion.
It’s a dangerous proposal since corruption by the Director of Finance is what led to the creation of the SLC in the first place. Undoing regulation enacted during the Great Depression and intended to protect against abuse of the public trust sounds eerily familiar to what created our current financial mess on Wall Street.
The proposed budget provision emanates from a decision of the SLC in January this year related to a plan to increase oil drilling and extraction off the Santa Barbara coast in exchange for the phase-out of production from other wells at a future date. The SLC determined, and the Attorney General’s office agreed, that the phase-out of production (the good part for the public) was unenforceable, and this determination led the SLC to deny the plan on a 2-1 vote. Clearly, the SLC did its job – it protected the public from a bad, unenforceable deal.
It was, after all, the Santa Barbara oil spill of 1969 that galvanized the modern environmental movement in California. The oil well leaked for over 11 days as workers tried to correct the problem and fouled 800 square miles of coastal waters. Months later, the well continued to dribble oil. For over 40 years since then, Californians have not allowed a single new oil lease off our coast. The voters, in 1994, even passed a statewide moratorium banning offshore oil drilling.
Governor Schwarzenegger is well aware of voter sentiment against drilling, and has been outspoken against drilling – even as recently as last month. Last year, he refused to join President Bush and John McCain’s call to lift the moratorium on offshore drilling.
"California's coastline is an international treasure," Schwarzenegger said on June 18th 2008. "I do not support lifting this moratorium on new drilling off our coast." The governor recognized the high cost of gasoline at the time and said, "We are in this situation because of our dependence on traditional petroleum-based oil."
The turn-of-heart may be no surprise to Capitol-watchers – the Santa Barbara drilling plan is estimated to generate $100 million in annual tax revenue. The revenue stream is important in the context of the layoffs and service cuts the state is facing, but the governor fails to recognize that SLC oversight is what protected us from a risky, unenforceable deal.
Instead, the budget proposal seeks to override independent public review of the Santa Barbara drilling plan – and also other future offshore oil drilling projects! By avoiding the work involved in making the Santa Barbara drilling plan work for the public, the budget proposal appears as lazy and frustrated bullying.
