Big Oil spent $10 million lobbying CA officials as oil production well permits doubled in 2020

The powerful oil industry lobby in California in 2020 spent less on lobbying in California than it did in 2019, but still managed to defeat legislation it opposed and getting CalGEM, the state’s gas and oil regulatory agency, to double the number of new oil production well permits approved in the state.

The top four oil industry lobbyist employers — the Western States Petroleum Association (WSPA), Chevron, Aera Energy and California Resources Corporation — spent $10,192,047 lobbying the Governor’s Office, Legislature and regulatory agencies to advance Big Oil’s agenda in 2020, according to data posted on the California Secretary of State’s website by February 1.

The Western States Petroleum Association, the largest and most powerful corporate lobbying organization in California, spent a total of $4,267,181, less than half of the $8.8 million that it spent in 2019. 2020’s lobbying expenses included $1,084,702 in the fifth quarter, $1,220,986 in the sixth quarter, $1,116,397 in the seventh quarter and $845,096 in the eighth quarter.

The San Ramon-based Chevron, a beneficiary of many new fracking permits this year, spent $4,091,501 in California 2020, less than the $5.9 million in spent in 2019. Chevron spent $1,644,943 in the fifth quarter, $1,009, 322 in the sixth quarter, $752,437 in the seventh quarter and $684,799 in the eighth quarter.   

Another big spender and beneficiary of large numbers of new fracking permits this year, Aera Energy, spent a total of $795,099 on lobbying California officials in 2020. Aera pumped $290,926 into lobbying California officials in the fifth quarter, $191,660 in the sixth quarter, $200,082 in the seventh quarter and $112,431 in the eighth quarter of the year.

Aera Energy has close ties with the Governor’s Office. In November, the San Francisco Chronicle reported on how Governor Gavin Newsom didn’t follow his own COVID pandemic guidelines when he attended a birthday party for Jason Kinney, a close friend and advisor, at the French Laundry Restaurant in Napa. Kinney is a lobbyist for Axiom Advisors, who lobbies for Aera Energy and other energy corporations.

Jointly owned by Shell and ExxonMobil, Aera produces nearly nearly a quarter of California’s oil and gas production. Aera paid Axiom Advisors $200,000 during 2019 and 2020 for lobbying on oil and gas permitting issues and other matters, according to Donny Shaw and Eric Seidman in Sludge: Newsom Delivers for Energy Clients of Lobbyist He Celebrated at French Laundry https://readsludge.com/2021/01/12/newsom-delivers-for-energy-clients-of-lobbyist-he-celebrated-at-french-laundry/  

“As journalist Steve Horn reported for Capital & Main last June, Aera received the first new batch of fracking permits from the Newsom administration after a months-long moratorium. Newsom had placed a temporary ban on new fracking permits in California in November 2019 following a series of scandals at the state’s oil well regulatory agency, the state’s conservation agency’s Division of Oil, Gas, and Geothermal Resources, or DOGGR (now Geologic Energy Management Division, or CalGEM),” Shaw and Seidman wrote.

Finally, the California Resources Corporation, a subsidiary of Occidental Petroleum, spent $1,038,266 to influence state officials in 2020. The corporation spent $310,198 on lobbying in the fifth quarter, $344,960 in the sixth quarter, $146,543 in the seventh quarter and $236,565 in the eight quarter.

The oil companies were amply rewarded for the over $10 million that they spent on lobbying last year. In a year of record fires and an unprecedented pandemic, California oil regulators more than doubled the approval of permits in 2020 to drill new oil and gas production wells.

The California Geologic Energy Management Division (CalGEM) of the Department of Conservation, the state’s oil and gas regulatory agency, approved more than 1,700 new oil and gas production well permits in 2020, Consumer Watchdog and FracTracker Alliance reported. The two groups updated the permit numbers and locations on an interactive map at the website: http://www.NewsomWellWatch.com.

“Largely because of a moratorium on high pressure cyclic steaming—a dangerous technique burning carbon-emitting natural gas to make steam used to coax stubborn oil out of the ground-- permits for all types of drilling dropped 14%. Very few drilling permits were used to drill new wells -- only 60 new wells were drilled in 2020,” the groups noted.

Since January of 2019, a total of 8,129 oil and gas drilling permits have been approved by the Newsom Administration.

CalGEM approved 3,745 total permits in 2020, a -14.5% change from 2019. They approved 1,709 new oil & gas production well permits in 2020, a +116.6% change from 2019.

The agency approved 1,992 new well permits (EOR & support) in 2020, a -15.8% change from  2019. They also approved 1,753 oil well rework permits in 2020 —  a -13.1% change from 2019.  

Lobbying is just one of the seven methods that Big Oil uses in California to exercise inordinate influence over California regulators. WSPA and Big Oil wield their power in 7 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) creating alliances with labor unions; and (7) contributing to non profit organizations.  

Last year, even a weak bill recommending health and safety setbacks around oil and gas failed to get through the oil industry-friendly California Legislature. On August 5, three Senate Democrats — Senate Majority Leader Bob Hertzberg, Senator Anna Caballero and Senator Ben Hueso — joined Republican Senators Andreas Borgeas and Brian Jones in a 5 to 4 vote to defeat AB 345, an amended setbacks bill, in a Senate Natural Resources and Water Committee hearing. Those three Senate Democrats received $142,206 in donations from oil and gas corporations.   

The inordinate influence by Big Oil on California politicians and regulators has resulted in widespread air, ground and water pollution with huge health impacts on mostly Black and Brown communities living near oil and gas wells.

Between 2008 and 2018 alone, oil and gas companies created a statewide total of over 1.3 trillion gallons of oil and gas wastewater in California, enough liquid to fill over 17.6 million household bathtubs, according to a new report released by Earthworks, along with allies VISION California and Center for Biological Diversity.

The report reveals that California, often portrayed by the state’s politicians and national media as the nation’s “green” and “progressive” leader, is actually one of the worst states in the U.S. when it comes to regulating the oil and gas industry’s waste.

The regulatory failures range from allowing crops to be irrigated with potentially toxic and radioactive wastewater to storing waste in unlined pits or injecting it into protected groundwater aquifers, according to Earthworks.

Since the first oil well was drilled in California in 1861, oil production has steadily grown in the state. In 2017, California was fourth in the nation in crude oil production, the report noted.

However, by February 2019, the state dropped to seventh largest producer as measured in barrels per month. California still produced over 160 million barrels in 2019, despite its dropping share of national crude oil production.

Catherine Reheis-Boyd, President of the Western States Petroleum Association and former Chair of the Marine Life Protection Act (MLPA) Initiative Blue Ribbon Task Force to create “marine protected areas” in Southern California, described 2020, a year that the oil industry spent over $10 million lobbying in Sacramento in, as “A Year of Innovation in Motion” on her blog on the WSPA website assessing the year of the pandemic:

“There is no doubt that 2020 was a challenging year for us all, but as we move into 2021 we share a renewed sense of hope that even in tough times our industry and our people will continue innovating to create a resilient energy infrastructure that ensures a safe and prosperous future for us all.

We know this because of the unprecedented year we all experienced – where we were asked to be nimbler and more flexible than ever before to deliver safe and reliable fuels. And in doing so, we didn’t stop innovating, we didn’t stop searching for opportunities to better our people, our processes, systems, and products. That is what we call Innovation in Motion – a spirit of constant progressive thinking that propels us forward. In fact, it’s the very definition of innovation to continue evolving, making better and more informed decisions despite the challenges to better shape the future of our industry and our work.”

However, Liza Tucker, Consumer Advocate for Consumer Watchdog, didn’t share Reheis-Boyd’s rosy assessment that 2020 was a “year of innovation in motion” for the oil industry.

“Exxon just lost $22 billion in 2020, it’s worst performance in 40 years,” said Tucker. “Exxon and Shell own Aera Energy. This pandemic tripped the oil industry into a death spiral. It was an unforeseen catastrophe for oil industry — and has kicked off a determined move among global leaders like the U.S. to begin a serious transition away from fossil fuels to save the planet.”

“Exxon is a dinosaur, a holdout,” Tucker stated. “It is not even pretending to transition away from its core business, oil production. It remains unclear whether the surety bond insurance industry is going to continue to insure oil industry operations. Some companies are just starting to lose their insurance coverage.”

She recommended that the Newsom administration drastically revise how much oil companies are putting up in bonds in exchange for drilling and reworking wells. The state currently has a $9 billion shortage in bonding required to safely close all of the wells in California.

“This is precisely the time the time for the Newsom administration to tell oil companies who see such a bright future to pony up so that Californians are not stuck holding the bag,” she said.

“Some companies such as BP are scrambling to rethink their strategy, yet there are other oil corporations like Exxon/Mobil and Chevron, major players in California, that think that the industry is going to rebound after the pandemic is over. They are doing nothing to effect a real transition away from the oil business. They are doing nothing transformational or innovative to move away from oil and gas - and are jeopardizing the wallets and health of Californians,” Tucker concluded.

It is no surprise that in addition to his longtime relationship with a lobbyist for Aera Energy and other energy companies, Governor Newsom took $97,000 in campaign contributions from the fossil fuel industry in 2019-20, according to the Sierra Club’s “Tracking the Dirty Dollars” project.