SAN FRANCISCO (Legal Newsline) - An ordinance banning oil and gas drilling within Monterey County that passed with 56% of the vote is preempted by state law promoting the production of underground hydrocarbons, the California Supreme Court ruled, rejecting comparisons to earlier decisions allowing municipalities to prohibit drilling in certain areas or ban marijuana dispensaries entirely.
Protect Monterey County sponsored, and voters passed, “Measure Z” in 2016 prohibiting new wells and wastewater and steam recovery methods within the county’s borders. The measure also banned fracking, although the oil companies neither used that technique or had any plans to do so.
Chevron and other oil companies sued to block the measure, arguing it was preempted by state laws regulating the production of oil and gas. Contained in Division 3 of the Public Resources Code, those statutes authorize the state oil and gas supervisor to dictate how oil companies drill, maintain and operate wells.
The county agreed to an indefinite stay while the lawsuit was pending. The trial court dismissed the portion of the complaint involving fracking since nobody was using the technique. The court went to find that Measure Z was preempted by section 3106 of the Public Resources Code, rejecting PMC’s description of the measure as a “land use” ordinance.
The California Supreme Court upheld the dismissal in an Aug. 3 decision. Section 3106 directs drillers to “utilize all methods and practices” to recover oil and gas resources underground and avoid waste, the court observed. The Monterey ordinance usurps the authority of the state supervisor to decide which methods are allowed, the court ruled.
“By providing that certain oil production methods may never be used by anyone, anywhere, in the County, Measure Z nullifies — and therefore contradicts — section 3106’s mandate that the state `shall’ supervise oil operation in a way that permits well operators to `utilize all methods and practices’” state regulators have approved, the court said.
The court rejected comparisons to other decisions allowing municipalities to decide where and when drillers and lumber companies can operate though local zoning ordinances. PMC argued the ordinance simply banned drilling anywhere in the county, but the court said that impermissibly would include steam wells drilled to extract oil from existing oil fields.
The court likewise rejected a comparison to its decision allowing the City of Riverside to ban marijuana dispensaries within its borders, saying state law doesn’t authorize dispensaries to operate anywhere. California law does explicitly promote drilling for the purpose of “increasing the ultimate recovery of underground hydrocarbons.”