Board of Supervisors — 2014-06-13

Healthy Air and Water Initiative (High-Intensity Petroleum Operations Ban)

• Public commenters presented arguments for and against the ban, citing health risks, water scarcity, and economic impacts versus job losses and regulatory safety.
• Staff reported that 89% of anticipated new wells would use the targeted high-intensity operations, while current operations do not utilize these specific techniques.
• The impact report estimated oil and gas contributes approximately $290 million to the local economy and $16.4 million in property taxes.
• Legal counsel clarified that the initiative targets new high-intensity operations rather than routine well maintenance, addressing concerns about the report's interpretation.

Board Actions and Decisions

• The Board voted unanimously to take no action on the impact report, avoiding potential legal complications associated with amending the document.
• The Board determined there was no consensus to adopt a unified official position in favor of or opposition to the initiative.
• The measure will proceed to the November ballot for a decision by voters, with individual members permitted to sign arguments in the ballot pamphlet.

Agenda Item: Healthy Air and Water Initiative (High-Intensity Petroleum Operations Ban)

Public Comment

• Public comment was received from numerous individuals and representatives of various organizations regarding the proposed initiative to ban high-intensity petroleum operations, specifically hydraulic fracturing and cyclic steam injection.
• Support for the Initiative:
• Speakers cited health and environmental risks, including cancer risks from volatile chemicals and radioactive substances, air quality degradation, groundwater contamination, and potential spills. Specific hazardous techniques mentioned included hydraulic fracturing, cyclic steam injection, and acidizing.
• Concerns were raised regarding water scarcity, particularly during drought conditions, with arguments that high-intensity extraction is water-intensive and competes with agriculture and domestic use. Speakers noted that cyclic steam injection consumes significant fresh water which becomes a contaminant, citing specific local projects and impacts on local waterways.
• Economic arguments included the view that the economic benefits of oil production are negligible compared to the county’s reliance on tourism, agriculture, and technology. Speakers argued that environmental quality is a key asset for attracting high-tech jobs and that reliance on oil extraction can crowd out growth in other industries.
• Legal and procedural points included arguments that the initiative is a lawful land use measure that does not constitute an unlawful taking of property, as it allows for low-intensity operations. A staff attorney for the Environmental Defense Center and Water Guardians requested that the ballot language be modified to replace "certain petroleum operations" with "high-intensity petroleum operations" for accuracy.
• Additional comments referenced global precedents for banning fracking, the importance of utilizing reclaimed water for irrigation, and the potential for the initiative to save election costs by allowing the Board to adopt the ordinance directly.
• Opposition to the Initiative:
• Speakers representing the oil industry, royalty owners, and local businesses argued that the initiative would result in significant job losses and economic harm, citing direct and indirect jobs supported by the industry. Some disputed claims that the initiative would not affect gasoline prices, while others argued the county’s contribution to global oil supply is minimal.
• Opponents stated that the oil industry operates under strict state and federal regulations, including those from the California Division of Oil, Gas and Geothermal Resources (DOGGR) and the EPA. They argued that existing technologies, such as steam injection and water re-injection, are safe, proven, and necessary for maintaining production, and contended that the initiative mischaracterizes standard maintenance practices as "high-intensity" operations.
• Legal and jurisdictional concerns included potential takings lawsuits, financial liability for the county, and questions regarding the measure's application to incorporated cities versus unincorporated areas. Some speakers requested that the board oppose the measure and allow voters to decide in November.
• Clarification requests focused on the scope of the initiative, particularly regarding water injection and well maintenance. One speaker noted that the staff report’s interpretation of the initiative as applying to well maintenance was misleading, as the initiative targets production techniques.
• Additional comments included arguments that the initiative process takes away the opportunity for dialogue, that the U.S. leads in high-efficiency petroleum operations, and that oil derivatives support U.S. industrial and retail life. Some speakers urged the Board to submit the measure to the voters without alteration, emphasizing the right of citizens to decide on energy production.

Staff Report and Discussion

• Staff presented an impact report pursuant to Elections Code 9111 addressing the impacts of the voter initiative. Key points included:
• Current Operations: There are 1,167 onshore wells operating, producing 4.3 million barrels of oil in 2013. No wells are currently using the well stimulation treatments (hydraulic fracturing/acid treatments) described in the measure.
• Future Development: In the past 12 months, 239 production wells were permitted, 69% of which planned to use cyclic steaming. 131 applications are in hand, 80% proposing cyclic steaming. 533 further applications are expected, 100% anticipating cyclic steaming. In total, 89% of anticipated wells would use operations described in the measure.
• Fiscal Impacts: Oil production companies pay $16.4 million in local property taxes (2.65% of the total tax roll). This includes $3.6 million to the County, $2.1 million to the Fire Protection District, $0.5 million to other special districts, and $10.2 million to school districts. Staff noted that immediate loss of property tax revenue is unlikely due to vested rights for status quo operations.
• Economic Impacts: A UCSB Economic Impact Project Report estimated that oil and gas production contributes approximately $290 million to the local economy (1.64% of GDP). Approximately 1.07% to 1.7% of county jobs have some relationship to the oil and gas industry. Staff noted that negative economic effects would be felt over time and influenced by exemptions and oil prices.
• Plan Consistency: The measure directs amendments to the county’s comprehensive plan. Staff found no inconsistency with government code sections prohibiting discrimination or housing/development codes.
• Land Use and Housing: No direct effect on housing availability or location was identified. Indirect effects may include a slow decrease in land used for oil development.
• Infrastructure: The direct effect is the eventual decline in oil production volume, which may affect infrastructure funding. However, the impact is also influenced by the price of oil.
• Business Retention: Retention of oil industry businesses and jobs will be negatively impacted over time. Exemptions on a case-by-case basis would complicate assumptions about business impacts.
• Vacant Parcels, Agriculture, and Open Space: Use of vacant land, agricultural land, open space, and business districts would be indirectly impacted. All uses would remain subject to current zoning and permitting requirements.
• Legal and Procedural Constraints:
• The Board must either adopt the ordinance without alteration within 10 days or submit it to the voters without alteration.
• The Board cannot make "pen and ink" changes to the ordinance text.
• The Board is not required to receive and file the impact report, but if they do, it does not become part of the official ballot materials.
• The Board may appoint members to author arguments for or against the ordinance.
• The Board must determine that the proposed action is not a project under CEQA.
• During the discussion, Board members and legal counsel raised concerns about specific language in the report. Counsel for the proponents (Environmental Defense Center) stated that the report erroneously suggested the initiative would prohibit routine well maintenance for existing operations. They clarified that the initiative includes an exemption for vested rights and applies only to new high-intensity operations, not maintenance. Board members questioned the report’s omission of potential fiscal, health, and environmental impacts associated with industry growth. Staff indicated that time constraints prevented a full analysis of these areas. County Counsel advised that altering the report could be problematic and suggested the Board take no action on the report to avoid legal complications.

Motions and Votes

• 1. Motion to Eliminate Paragraph on Well Maintenance:
• A motion was made to eliminate the paragraph in the impact report referencing well maintenance.
• The motion was withdrawn in favor of a broader option.
• 2. Motion to Take No Action on the Impact Report:
• A motion was made for the Board to take no action on the impact report, consistent with Elections Code 9111, rather than receiving and filing it with amendments.
• Vote: The motion passed unanimously (5-0).
• 3. Motion Regarding Board Position:
• The Board discussed whether to adopt an official position in favor of or opposition to the initiative.
• It was determined that there was no consensus among Board members to take a unified official position.
• A motion was made to confirm that the Board would not take an official position on the initiative.
• Vote: The motion passed unanimously (5-0).

Decision

• The Board of Supervisors decided to take no action on the impact report and to not adopt an official Board position regarding the initiative. The matter will proceed to the November ballot for a decision by the voters. Individual Board members may still sign arguments in favor of or opposition to the measure in the ballot pamphlet.