A Free-Market Energy Blog

A Bad Message from California on Offshore Drilling

By Tom Tanton -- February 7, 2009

As I posted at the Pacific Research Institute website, the California State Lands Commission (SLC) has rejected a proposal that would have led to the first new oil drilling project off the California coast in 40 years. On January 29, the panel voted 2-1 against Plains Exploration & Production Company’s request for approval of its bid to expand drilling off Platform Irene in the Santa Barbara Channel.

The swing vote was California Lieutenant Governor John Garamendi, who also serves as SLC Chairman.  Mr. Garamendi had earlier signaled his approval, but apparently he had a last minute change of heart. Garamendi is now running for governor of the state.

Commission Executive Officer Paul Thayer said the project is effectively dead unless the oil company takes it to court or reapplies to the Commission with a new proposal.  The proposal, which would have been worth billions of dollars to the state, was announced last year with a landmark agreement between longtime anti-oil environmentalists and the oil company that included various concessions to the project’s critics.

According to various sources, including his own California gubernatorial campaign website, Garamendi argued strongly that the plan would “signal” that California wants to open offshore drilling and supporters would push for more oil exploration on the West Coast. “I refuse to let this lease move forward,” Garamendi said. “Approving a drilling proposal will undercut congressional efforts to reintroduce a federal moratorium on offshore oil drilling earlier lifted by the Bush administration.”

Well, the Bush administration did remove an executive order moratorium, but it was Congress that let the congressionally imposed moratorium expire. Furthermore, the Santa Barbara County Board of Supervisors voted last year to encourage additional drilling–and they’re the ones whose constituents are most directly affected. The board voted 3-2 to send a letter to Governor Arnold Schwarzenegger encouraging him to consider allowing more oil drilling off Santa Barbara county’s shores.

I’m not sure what message Mr. Garamendi wants to “signal.” It may be that he doesn’t want competing interests (like oil companies and environmentalists) to compromise with each other. It may be that the wishes of local elected officials should be ignored. It may be that he doesn’t want technology advances, aimed at protecting against a recurrence of the 1969 oil spill, to be pursued. It may be that he simply chooses to forego the dollars the State would reap from royalty revenues, even when faced with a $40 billion budget deficit–and now furloughs for state employees.

Whatever the reason, it smells like hard-left politics triumphing over common-sense economics and rational environmentalism.


  1. TokyoTom  

    Rob, have you considered that maybe he`s simply playing a delaying game, in the expectation that when Congress changes the leasing rules to provide states with a greater cut of royatty revenues (changes that you support on IER!), that the California government will come out ahead?

    What smells “hard-left” about that?


  2. Tom Tanton  

    If he was playing a delay game as you suggest TokyoTom, he would more likely have taken advantagae of the opportunity when Congress (earlier) considered a greater royalty share along with opening up the OCS. He didn’t and Californi led the opposition. He was part of the refusal of revenue sharing compromise with coastal states (even with new royalty agreement, they could opt out of expanded development.)


  3. jae  

    He just may have greatly hurt his chances to be Gov. I hope, anyway. The California bureaucrats have about destroyed the whole economy of the state, and I’m betting that the citizens are going to start voting some of the liberal bums out.


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