Oil companies sue Monterey County to stop Measure Z

UPDATE 12/15/2016 5:45 PM:

Monterey County is facing two lawsuits over the voter-approved Measure Z. The controversial initiative prevents fracking and new wells. It also plans to stop other oil extraction tactics already being used in the county.

The two suits were filed this week, after the votes were certified. One was filed by Aera Energy, a Bakersfield-based oil producer that is jointly owned by Exxon and Shell. Aera accounts for nearly a quarter of the state’s production. The other suit was filed by Chevron, the San Ardo Union Elementary School District and several people who own the mineral rights at the San Ardo oil fields.

The oil industry is big business in Monterey County. Aera Energy and Chevron operate more than 1,500 oil and gas wells in the 5,000 acre San Ardo oil fields. In 2015, the area produced nearly eight million barrels of oil.

“We are the fourth largest producer of oil, as a county, in the state of California. (We are) the 13th largest oil field in California, the 46th largest oil field in the country,” said Charles McKee, Monterey County Counsel.

But in November, 56-percent of Monterey County voters approved Measure Z, a ban on fracking. While the county counsel’s office believes the initiative was validly crafted, oil companies believe they were duped.

“We don’t believe that proponents of the measure were forthcoming about their real intent about Measure Z or the impacts that it has on 70 years of oil production there in Monterey or the impact that it will have on the county and its residents,” said Cindy Pollard, director of public affairs at Aera Energy.

Aera Energy and Chevron believe this will end all oil and gas production in the county, costing the county millions in property tax revenue that goes to fund schools, law enforcement and fire, and the loss of more than 150 jobs.

That’s why both filed separate lawsuits against Monterey County on Wednesday.

The suits claim “inverse condemnation,” the regulatory–rather than physical–taking of property. It alleges Measure Z puts restrictions on how the companies can use their property.

They’re also concerned about the immediate and long-term impacts.

“They also claim they have a vested right to withdraw the oil from the ground in the matter that they’re doing and they’ve been doing it for 70 years with permits that were granted many years ago by the county,” McKee said. “The county, at that time, was not as savvy as we are today in crafting permits in a way that provide additional constraints and protections, so they’re pretty broad permits that they’re claiming the right to extract oil.”

Also in question is something called “preemption.” It asks the question – who has final say in regulations, the county or the state?

In a statement provided to KION, Chevron said their suit “challenges Measure Z on the grounds that it exceeds the county’s authority to regulate the oil and gas industry.”

Protect Monterey County, which backed Measure Z, calls the claims bogus, saying it’s a way to delay the implementation.

“This reflects the typical arrogance of big oil,” said Jim Eggleston, a retired labor and civil rights attorney. “They contend their business plan is superior to and trumps the rights and interests of Monterey County and protecting its natural resources and the health and safety of the people.”

Measure Z was supposed to take effect on December 23. Most of it is on hold for now. The ban on wastewater impoundment and injection is not scheduled to go into effect for at least another five years.

“We can continue to operate business as usual for now,” Pollard said. “What remains prohibited is hydraulic fracturing and from our perspective, that’s pretty much a moot point because there is no hydraulic fracturing that takes place in Monterey County.”

The county feels confident they can defend the case, one that could set precedence.

“It looks like we are the test case for many jurisdictions throughout the country where oil is extracted,” McKee said. “There have been straight fracking bans, but there have not been these broader bans like this one in other jurisdictions, as far as I know, and certainly not in a jurisdiction where oil is extracted.”

The county has retained co-counsel for the case. Best, Best and Krieger specialize in land use, municipal and water law. McKee said his office’s next step is to meet with the interested parties and see what the best way to move forward in a timely manner. He hopes there could be a resolution in a year or two.

Aera Energy said it regrets having to take an extreme measure like litigation.

“Certainly suing Monterey County isn’t something we wanted to do,” Pollard explained, “but we believe it’s our only course of action to be able to protect the jobs of those who work for us in Monterey County.”

ORIGINAL POST:

A legal battle is looming over Measure Z, the anti-fracking measure passed by Monterey County voters in November.

Two oil companies are going to court to stop its implementation.

In separate lawsuits, Chevron and Bakersfield-based Aera Energy filed suit against Monterey County this week, claiming the measure is unconstitutional and breaks decades-long agreements. Together, the two companies operate wells on 5,000 acres of land in San Ardo.

KION’s Mariana Hicks talked today with Aera Energy about the company’s claims, and asked Monterey County’s legal counsel about issues raised in the lawsuits. Tonight at 5 and 6 p.m. she will explain what’s at stake and what lies ahead.