California is a major energy consumer, relying heavily on both local production and imported oil to meet its needs. Even though we utilize all the oil produced within the state, we still depend on imports for a whopping 75% of our supply, which adds transportation costs of $5 to $6 per barrel.¹  This reliance on imported oil not only drives up fuel prices for consumers but also compromises our environmental goals by bypassing California’s strict standards. The proposed bills— AB 1866 and AB 3233 — threaten to increase this dependency on foreign oil, which comes with lower environmental standards, higher transport costs, and more greenhouse gas emissions. These bills could severely disrupt California’s ability to provide affordable and reliable fuels to its residents, impacting everyone from everyday consumers to entire industries.

 AB 1866 (Hart): Jeopardizing California’s Energy Independence and Affordability

AB 1866 proposes the early closure of idle oil wells, which are currently valuable assets that can be brought back into production. These wells are already tested for safety and environmental concerns, ensuring they don’t pose risks to the public. Additionally, California’s oil regulatory body, CalGEM, can already order the sealing and abandonment of any deserted well, including idle ones.

It’s important to note that California relies heavily on foreign oil, importing 75% of its crude oil from countries that may not follow the same environmental standards we do. Limiting our ability to produce oil locally means we would depend even more on imported oil, which could affect the reliability, sustainability, and affordability of our energy supply.

CalGEM’s program to manage idle wells is effective, having sealed and abandoned over 8,286 idle wells between January 2019 and June 2024. Therefore, the notion of an idle well crisis is misleading.

AB 3233 (Addis): The High Price of Local Control Over Oil Production

AB 3233 would give local governments the power to limit or ban oil production in their areas. Currently, a California Supreme Court ruling and state law (specifically Section 3106 of the Public Resources Code) prevent local authorities from imposing their own restrictions on oil and gas production methods.

This bill aims to override that ruling and state law, replacing a consistent statewide approach with a mix of local rules. These local ordinances could ban or impose impractical limits on oil and gas operations, creating a fragmented system.

Allowing local governments to make these decisions could lead to significant legal issues under the U.S. Constitution’s takings clause, which protects private property from being taken without compensation. If local bans on oil production are enacted, it could result in projected costs of $27 billion for local governments.²

1. California Refineries “Cost and Margin Analysis, 2000-2022” by Solomon Associates

2. Capitol Matrix Consulting, “Takings Estimate for AB 3233” April 22, 2024