Source: San Jose Mercury News (CA), March 3, 2015
Posted on: http://envfpn.advisen.com
An oil company has sued to block San Benito County’s voter-approved fracking ban in a move that could affect the growing trend of California cities and counties’ efforts to stop the controversial oil drilling practice of hydraulic fracturing.
In the lawsuit, Citadel Exploration, based in Newport Beach, is attempting to overturn Measure J, approved by 59 percent of San Benito County voters four months ago.
If the company is successful, the lawsuit could impact other places where local officials are discussing bans, and where activists are considering ballot measures in 2016, including Santa Clara, Alameda, Monterey and Butte counties, along with Santa Cruz County, whose board of supervisors approved a countywide ban on fracking last spring.
Measure J supporters say they are frustrated that Gov. Jerry Brown and state lawmakers haven’t banned fracking, a technique in which water and chemicals are pumped underground to release oil and gas — so they decided to go around them.
But in its lawsuit filed Friday in San Benito County Superior Court, Citadel said local governments don’t have the authority to impose bans.
Calling Measure J “an illegal local statutory scheme,” Citadel said only the state of California can regulate oil and gas drilling.
Calls to Citadel’s CEO, Armen Nahabedian, and its attorney, Jeffrey Coleman of Newport Beach, were not returned Monday. Since the election, the company’s stock has fallen 56 percent, from 25 cents a share to 11 cents on Monday, a time period when world oil prices also have plunged.
Environmentalists who backed Measure J said they are confident they will win.
“Measure J will withstand any legal challenge,” said Kassie Siegel, an attorney with the Center for Biological Diversity. “The oil industry threw everything they had at local fracking bans in New York. They took it all the way up to the highest court in New York and they lost. And the power of local governments in California is greater than in New York.”
In the San Benito County campaign, supporters of Measure J said fracking increased the risk of groundwater pollution and could spoil the county’s tourism and farming industries.
A coalition funded by Chevron, ExxonMobil, Occidental Petroleum and other oil giants donated roughly $1.8 million to the opposition campaign in San Benito County, outspending supporters 15-1. The coalition also gave $5 million to the no campaign in Santa Barbara County, where voters rejected a fracking ban in November.
On Tuesday, voters in La Habra Heights near Los Angeles are scheduled to vote on a fracking ban. Also in November, Mendocino County voters approved a ban on fracking.
Currently, there is no fracking in San Benito County. Most fracking in California is done in Kern County, near Bakersfield. There are 26 active oil wells in the southern part of San Benito County that produce about 5,700 barrels a year.
Citadel is not fracking in the county. But it took exception to a section of Measure J that also bans steam injection, a process in which steam is injected into formations with heavy oil to allow its extraction.
Citadel planned to use that method to drill up to 1,000 wells on nearly 700 acres in a remote area south of Pinnacles National Park near Bitterwater, on the southern edge of the county. In July, those plans were delayed when environmentalists sued and won a court ruling requiring more environmental study. The company has appealed.
At the time, Citadel’s Nahabedian, a fourth-generation oil man who served in the Iraq War, told this newspaper the county was overreaching.
“It’s an attack against property rights in San Benito County and every other county where these measures are on the ballot,” he said.
Citadel filed a $1.2 billion claim against San Benito County in November after the election. But the company has not filed a lawsuit seeking that amount, and the county has not acted on the claim. Environmentalists called the letter bluster, and noted that many counties regulate oil drilling through zoning.
“Local authorities in California have pretty broad authority to regulate land use,” said Andy Hsia-Coron, a retired schoolteacher in San Juan Bautista who helped run the Yes on Measure J campaign. “The people have spoken, and spoken loudly in San Benito County about how they want their land used.”