Existing law, the Petroleum Industry Information Reporting Act of 1980, requires refiners, as defined, to report monthly to the State Energy Resources Conservation and Development Commission (Energy Commission), for each of their refineries, specified information, including the origin of petroleum receipts and the source of imports of finished petroleum products.

This bill would express the intent of the Legislature that the Energy Commission monitor foreign countries that export oil to California and identify on its internet website which of those countries have demonstrated human rights abuses, as documented by the United States Department of State or by human rights organizations, State, and which of those countries have lower environmental standards for the production of oil than California.

Existing law imposes various limitations on the emissions of air contaminants for the control of air pollution from vehicular and nonvehicular sources. Existing law requires the State Air Resources Board to post on its internet website information on air quality conditions and trends statewide and to develop and conduct a program of monitoring airborne fine particles smaller than 2.5 microns in diameter (PM 2.5).

This bill would require the state board to annually produce an assessment of the greenhouse gas emissions associated with the transportation of oil in California, as specified, and to include that assessment on the boards internet website. The bill would also require the Energy Commission to annually provide data collected pursuant to the Petroleum Industry Information Reporting Act of 1980 to the state board for the purposes of the assessment.

Under existing law, the Geologic Energy Management Division in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state.

This bill would require the division to provide a link on its internet website to air quality emissions data associated with the transportation of oil imported into the state.

Existing law, the Petroleum Industry Information Reporting Act of 1980, requires refiners, as defined, to report monthly to the State Energy Resources Conservation and Development Commission (Energy Commission), for each of their refineries, specified information, including the origin of petroleum receipts and the source of imports of finished petroleum products.

This bill would express the intent of the Legislature that the Energy Commission monitor foreign countries that export oil to California and identify on its internet website which of those countries have demonstrated human rights abuses, as documented by the United States Department of State or by human rights organizations, and which of those countries have lower environmental standards for the production of oil than California.

Existing law imposes various limitations on the emissions of air contaminants for the control of air pollution from vehicular and nonvehicular sources. Existing law requires the State Air Resources Board to post on its internet website information on air quality conditions and trends statewide and to develop and conduct a program of monitoring airborne fine particles smaller than 2.5 microns in diameter (PM 2.5).

This bill would require the state board to annually produce an assessment of the greenhouse gas emissions associated with the transportation of oil in California, as specified, and to include that assessment on the boards internet website. The bill would also require the Energy Commission to annually provide data collected pursuant to the Petroleum Industry Information Reporting Act of 1980 to the state board for the purposes of the assessment.

Under existing law, the Geologic Energy Management Division in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state.

This bill would require the division to provide a link on its internet website to air quality emissions data associated with the transportation of oil imported into the state.

Date of Hearing: July 12, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

SBPCA Bill Id:SB 15

Author:(Grove) – As Amended Ver:May 1, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Air Resources Board (ARB) to produce an annual assessment of the greenhouse gas (GHG) emissions associated with the transportation of oil in California.

Specifically, this bill:

1. States the intent of the Legislature that the California Energy Commission (CEC) monitor foreign countries that export oil to California and identify on its website which of those countries have demonstrated human rights abuses, as documented by the United States Department of State or by human rights organizations, and which of those countries have lower environmental standards for the production of oil than California.
2. Requires ARB to annually produce an assessment of the GHGs associated with the transportation of oil in California and make this assessment available on its website.
3. Requires the assessment to include:
   1. An estimate of the GHGs associated with the transportation of oil in this state for oil imported into the state during the previous year broken down by the country of origin.
   2. An estimate of the GHGs associated with the transportation of oil in this state for oil produced within the state during the previous year.
   3. A description of the methodology and assumptions used to produce the assessment.
   4. A citation or link to the data used to produce the assessment.
4. Requires the CEC to annually provide data collected pursuant to the Petroleum Industry Information Reporting Act of 1980 (PIIRA) to ARB for purposes of the assessment.
5. Requires the Geologic Energy Management Division (CalGEM) to provide a link on its website to air quality emissions data associated with the transportation of oil imported into the state.

FISCAL EFFECT:

1) ARB estimates ongoing annual costs of approximately $435,000 (Oil, Gas, and Geothermal Administrative Fund) for two new positions to calculate GHG and criteria emissions factors associated with the import, production, and export of oil in California; determine and continually revise pathway differences and emission rates for various countries; collaborate with CEC and stakeholders; and develop and publish a report, among other things.

2) CEC and CalGEM estimate minor and absorbable costs.

COMMENTS:

1) Purpose. According to the author:

SB 15 simply asks whether California should be importing its oil from countries that do not share our values on human rights and environmental standards. The bill expresses the intent of the Legislature that the California Energy Commission report on the human rights records and environmental standards of the countries that we buy oil from. The measure would also require the Air Resources Board to report on its website the amount of particulate matter released into the air from tanker ship emissions from oil imported into the state. The bill is a recognition that California should not be importing oil from countries that do not share our California values. We can produce the oil we use, and keep the jobs and revenues inside our Golden State while protecting our environment.

2) Background.

Oil Production, Transportation, and Use in California. California is a major oil and gas producing state, currently ranked seventh in the nation. The state produced roughly 136 million barrels of crude oil in 2022. The state uses more crude oil than it produces and has about one-tenth of the nation’s refining capacity. In the last several years, the amount of oil produced in California has continued to decline. In 2022, 26% of the oil supplied to California refineries came from in-state production, 15% came from Alaska, and 59% came from foreign sources. Imported oil is largely brought to the state by tankers and barges, though there is a small amount of foreign oil imported by rail. The transportation sector uses about 85% of the oil consumed in the state. In 2018, the transportation of global crude oil resulted in the emission of approximately 109 million metric tons of GHGs.

PIIRA. PIIRA requires certain qualifying petroleum industry companies to submit weekly, monthly, and annual data to the CEC. Businesses that ship, receive, store, process, and sell crude oil and petroleum products in the state file PIIRA reports. ARB does not track air quality emissions specifically for the transportation of oil from tankers to California. This bill gives ARB access to PIIRA data from the CEC so that ARB can calculate emissions related to oil transport.

3) Support. Along with a number of other organizations in support, the California Independent Petroleum Association writes:

California’s independent oil and natural gas producers are currently at a competitive disadvantage compared to imported crude oil. Foreign crude is exempt from California’s strictest-in-the-world climate mitigation regulations that are applied to oil and natural gas extraction in California…Currently, 42 percent of California’s imports come directly from the Amazon Rainforest in Ecuador, Brazil, Guyana, Argentina and Peru. California should not be complicit in the destruction of the Amazon Rainforest...The second largest exporter of oil into California is Saudi Arabia, a country which shares almost none of California’s cultural values and has a track record of habitual and horrendous human rights abuses, particularly targeted at the LGBTQ+ community.

4) Previous Legislation. SB 1319 (Grove), of the 2021-2022 Legislative Session, was identical to this bill. SB 1319 was held on this committee’s suspense file.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: June 19, 2023

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Luz Rivas, Chair

SBPCA Bill Id:SB 15

Author:(Grove) – As Amended Ver:May 1, 2023

SENATE VOTE: 40-0

SUBJECT: Oil imports: air quality emissions data.

SUMMARY: Requires the Air Resources Board (ARB) to report greenhouse gas (GHG) emissions data associated with oil transported in California and requires the Geologic Energy Management Division (CalGEM) to make available air quality emissions data associated with the transportation of imported oil.

EXISTING LAW:

1. Pursuant to Executive Order N-79-20, requires ARB to evaluate how to phase out oil extraction by 2045 through the climate change scoping plan, the state’s comprehensive, multi-year regulatory and programmatic plan to achieve required reductions in GHG.
2. Requires GHG emissions to be reduced at least 85% below the 1990 level by 2045, and establishes a goal of zero net carbon emissions by 2045, commonly known as carbon neutrality. (Health and Safety Code 38562.2)
3. Requires, pursuant to the Petroleum Industry Information Reporting Act of 1980 (PIIRA), refiners to report monthly to the State Energy Resources Conservation and Development Commission (CEC) specified information for each of their refineries, including the origin of petroleum receipts and the source of imports of finished petroleum products. (Public Resources Code (PRC) 25353-25354)
4. Establishes CalGEM in the Department of Conservation to regulate the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. (PRC 3000, et seq.)

THIS BILL:

1. States the intent of the Legislature that the CEC monitor foreign countries that export oil to California and identify on its internet website which of those countries have demonstrated human rights abuses, as documented by the United States Department of State, and which of those countries have lower environmental standards for the production of oil than California.
2. Requires ARB to annually produce an assessment of the GHGs associated with the transportation of oil in California. Requires the assessment be made available on ARB’s internet website. Requires the assessment to include all of the following:
   1. An estimate of the GHGs associated with the transportation of oil in this state for oil imported into the state during the previous year broken down by the country of origin;
   2. An estimate of the GHGs associated with the transportation of oil in this state for oil produced within the state during the previous year;
   3. A description of the methodology and assumptions used to produce the assessment; and,
   4. A citation or link to the data used to produce the assessment.
3. Requires the CEC to annually provide specified data to ARB for the purposes of the assessment.
4. Requires the CalGEM to provide a link on its internet website to air quality emissions data associated with the transportation of oil imported into the state.

FISCAL EFFECT: According to the Senate Appropriations Committee, enactment of this bill will result in estimated ongoing costs of about $435,000 annually (Oil, Gas, and Geothermal Administrative Fund) to ARB to calculate GHG and criteria emissions factors associated with the import, production, and export of oil in California; determine and revise pathway differences and emission rates for various countries; collaborate with the U.S. Environmental Protection Agency, CEC, and stakeholders; and, develop and publish a report, among other things.

COMMENTS:

1. Author’s statement:

SB 15 simply asks whether California should be importing its oil from countries that do not share our values on human rights and environmental standards. The bill expresses the intent of the Legislature that the California Energy Commission report on the human rights records and environmental standards of the countries that we buy oil from. The measure would also require the Air Resources Board to report on its website the amount of particulate matter released into the air from tanker ship emissions from oil imported into the state. The bill is a recognition that California should not be importing oil from countries that do not share our California values. We can produce the oil we use, and keep the jobs and revenues inside our Golden State while protecting our environment.

1. California’s climate goals. With the adoption of the California Global Warming Solutions Act of 2006 [AB 32 (Núñez), Chapter 488, Statutes of 2006], California has aggressively adopted GHG reduction targets to reduce the state’s portfolio of climate emissions and facilitate emissions reductions across virtually every sector and region. But the impacts of climate change are still happening. Extreme heat, rising sea levels, ongoing drought, flooding, and wildfires have had direct impacts on public health, infrastructure, people’s livelihoods, and local economies. The need to further reduce GHGs to spare the most significant impacts of climate change are critical to managing our resources and species’ survival.

The recent Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) summarizes the latest scientific consensus on climate change. It finds that atmospheric concentrations of carbon dioxide have increased by 50% since the industrial revolution and continue to increase at a rate of two parts per million each year. By the 2030s, and no later than 2040, the world will exceed 1.5°C warming. In order to remain below 1.5°C, global net anthropogenic carbon (GHG) emissions need to reach net zero by 2050.

1. California’s oil demand. California is the 7th largest producer in the United States. California is the largest consumer of jet fuel and second-largest consumer of gasoline among the 50 states.

In 2021, California produced 151 million barrels of oil; imported 78 million barrels from Alaska (15% of the state’s total oil); and, imported more than 294 million barrels from foreign counties (56.2% of the state’s total oil use).

According to CEC data cited in ARB’s Draft Scoping Plan for 2022, the total oil extracted in California peaked at 402 million barrels in 1986, and has decreased by an average of six million barrels per year. This steadily decreasing production of crude in California is expected to continue as the state’s oil fields deplete.

A University of California, Santa Barbara, report estimated that under business-as-usual conditions, California oil field production would decrease to 97 million barrels in 2045. The business-as-usual model assumed no additional regulations limiting oil extraction in California. To meet energy demands, California is exponentially investing in renewable energy sources [such as renewable electricity (solar, wind) and hydrogen] that partially, and hopefully one day fully, displace the need for oil consumption.

1. California’s oil imports. According to the CEC, as of April 6, 2021, California imported oil from the following foreign countries:

Country Thousands of Barrels % of Import

Ecuador 52,563 17.69%

Saudi Arabia 48,781 16.42%

Iraq 46,963 15.8%

Brazil 23,852 8.03%

Guyana 23,741 7.99%

Colombia 18,845 6.34%

Russian 18,347 6.17%

Mexico 11,724 3.95%

Brazil 9,621 4.20%

Brunei 9,160 3.08%

Other 43,184 14.53%

Compared to 2019 (pre-pandemic) imports, when California imported more than 342 million barrels of oil, we’ve had a 13% decrease in foreign imports, but the amounts are still staggering.

Approximately 99% of crude imports into California are delivered by marine transportation. The remaining imports are transported by rail. There are no pipelines that bring crude oil into California from out of state. The GHGs associated with both oil tanker and rail are significant. It is estimated that 109 million metric tons of GHG emissions were driven by the transportation of global crude oil in 2018, approximately 8% of the total GHG emissions from the international shipping industry for that year. Researchers from Carnegie Mellon University and the University of Pittsburgh have found that the air pollution and GHG impacts of shipping crude by rail are nearly twice as large as those for oil pipelines.

The California Independent Petroleum Association (CIPA) argues that California’s independent oil and natural gas producers are currently at a competitive disadvantage compared to imported crude oil. Foreign crude is exempt from California’s strictest-in-the-world climate mitigation regulations that are applied to oil and natural gas extraction in California. The organization states that, as the climate crisis is a global one, reducing in-state production in favor of foreign production worsens the climate crisis and is counter-productive to California’s climate goals.

1. Human rights abuses. SB 15 states the intent of the Legislature for the CEC to monitor foreign countries that export oil to California and identify which of those countries have demonstrated human rights abuses, as documented by the United States Department of State or by human rights organizations, and which of those countries have lower environmental standards for the production of oil than California.

CIPA notes that currently 42% of California’s imports come directly from the Amazon Rainforest in Ecuador, arguing, “California should not be complicit in the destruction of the Amazon Rainforest when all of that oil could come from inside California, produced by responsible, accountable, and highly regulated California oil companies.” Scientists say the rainforest is vital to curbing climate change because of the vast amount of GHG the forest absorbs, so razing it to produce oil is worsening the climate crisis exponentially.

The second largest exporter of oil into California is Saudi Arabia, a country which shares almost none of California’s cultural values and has a track record of habitual and horrendous human rights abuses, particularly targeted at the LGBTQIA+ community.

While human rights abuses don’t have a direct nexus to climate change or GHG reduction policy goals, the two can go hand in hand when considering the reasons for reducing imports from foreign countries that have different values than California when it comes to protecting the environment and its people. Counties that have less rigorous environmental regulations around oil extraction and refinement are creating human rights violations by putting humans in greater jeopardy of environmental pollution related to oil and climate change.

1. This bill. SB 15 would require ARB to produce an assessment of the GHGs associated with the transportation of oil in California using data from CEC, and require CalGEM to report on its website the amount of particulate matter released into the air from tanker ship emissions from oil imported into the state.

The ARB does not currently track air quality emissions specifically for the transportation of oil from tankers to California. This bill, however, will give ARB access to PIIRA data from CEC to get more granularity for tankers that import oil so that ARB can tease out with other data sources we use for emission inventory development to calculate the emissions related to oil transportation.

1. Related legislation. SB 1319 (Grove, 2022) was identical to SB 15. The bill was held in the Assembly Appropriations Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Associated Builders and Contractors of California
California Independent Petroleum Association
Championx/Norris Rods
City of Taft
County of Fresno
County of Kern
Geoguidance Drilling Services
Global Elastomeric Products
Greater Bakersfield Chamber of Commerce
Halliburton Energy Services
Hathaway
Horizon Well Logging
Innex California
Kern Citizens for Energy
Kern County Hispanic Chamber of Commerce
Kern County Taxpayers Association
Mission Oil Company
Mmi Services
Mountain View Resources
Nisei Farmers League
San Joaquin Facilities Management
Senator Shannon Grove
Strata Credit Union
Trio Petroleum
Tulare Chamber of Commerce
Tulare County Economic Development Corporation
Vaquero Energy
West Side Recreation & Park District
Westside Waste Management Co.
Western States Petroleum Association

Opposition

None on file

Analysis Prepared by: Paige Brokaw / NAT. RES. /

 THIRD READING  

Bill No: SB 15

Author: Grove (R)

Amended: 5/1/23

Vote: 21

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 3/29/23

AYES: Allen, Dahle, Gonzalez, Hurtado, Menjivar, Nguyen, Skinner

SENATE ENERGY, U. & C. COMMITTEE: 17-0, 4/24/23

AYES: Bradford, Ashby, Becker, Caballero, Dodd, Durazo, Eggman, Gonzalez, Grove, McGuire, Min, Newman, Rubio, Seyarto, Skinner, Stern, Wilk

NO VOTE RECORDED: Dahle

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/18/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

SUBJECT: Oil imports: air quality emissions data

SOURCE: Author

DIGEST:

This bill expresses the intent of the Legislature that the California Energy Commission (CEC, formerly the State Energy Resources Conservation and Development Commission) monitor countries that export oil to California and identify human rights abuses and lower environmental standards for oil production than California. This bill requires the California Air Resources Board (CARB) to report greenhouse gas (GHG) emissions data associated with oil transported in California and the Geologic Energy Management Division (CalGEM) to make available air quality emissions data associated with the transportation of imported oil.

ANALYSIS:

Existing law:

1. Establishes CalGEM in the Department of Conservation as the regulator of the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. (Public Resources Code (PRC) § 3100 et seq., PRC § 690)
2. Requires, under the Petroleum Industry Information Reporting Act of 1980, refiners, as defined, to report monthly to the CEC, for each of their refineries, specified information, including petroleum sales volumes and prices, and the origin of petroleum and finished petroleum products receipts. (PRC § 25350 et seq.)
3. Establishes CARB as the state agency charged with monitoring and regulating sources of GHG emissions and other air pollutants. Existing law requires CARB to make available, and update at least annually, on its internet website the emissions of GHGs, criteria pollutants, and toxic air contaminants for certain facilities in the state, and to annually present an informational report to a specific legislative committee on the reported emissions of GHGs, criteria pollutants, and toxic air contaminants from certain energy and industry sectors, as prescribed. (Health and Safety Code § 39500 et seq.)

This bill:

1. Expresses the intent of the Legislature that the CEC monitor foreign countries that export oil to California and identify on its internet website which of those countries have demonstrated human rights abuses, as documented by the United States Department of State, and which of those countries have lower environmental standards for oil production than California.
2. Requires CARB to annually produce an assessment of the GHG emissions associated with the transportation of oil in California, both oil imported to and produced in California, and to include that assessment on the Board’s internet website.
3. Requires the CEC to annually provide data to CARB for the purposes of this assessment pursuant to the Petroleum Industry Information Reporting Act of 1980.
4. Requires CalGEM to provide a link on its internet website to air quality emissions data associated with the transportation of oil imported into the state.

Background

1. Climate change and fossil fuels. The burning of fossil fuels is the main source of GHGs causing climate change. California’s statutory emission reduction goals dictate that GHG emissions be reduced to 40% below the 1990 level by 2030 (updated to 48% in CARB’s 2022 Scoping Plan) and reduced to at least 85% below 1990 levels by 2045. Net zero emissions (carbon neutrality) are to be achieved by 2045.

Due to initiatives to meet these goals such as the Advanced Clean Car Standards, Low Carbon Fuel Standard requirements, and improved land-use planning, California’s demand for crude oil has declined. Oil demand is likely to continue to fall as a result of these and additional policies, such as the Governor’s Executive Order N-79-20 which calls for the elimination of new internal combustion passenger vehicles by 2035. Not importing oil into California can cut emissions, but, ultimately, any credible plan to meet California’s climate goals will lean heavily on phasing out oil production and consumption.

1. Oil production poses environmental risk. All oil production poses environmental risk no matter where it is produced. The largest portion of imported oil to California comes from Ecuador. Much of this oil is sourced from the Amazon rainforest, which is home to the highest biodiversity on the planet and functions as a significant climate-stabilizing carbon sink. Oil extraction continues to encroach into the Amazon including in Ecuador’s Yasuní National Park, a United Nations Educational, Scientific and Cultural Organization (UNESCO) recognized site home to several indigenous communities including two uncontacted tribes. The Ecuadoran Heavy Crude Oil Pipeline has ruptured twice in the last three years, causing extensive environmental damage. However, environmental damage related to oil extraction occurs in California as well, despite stringent environmental regulations. For example, an oil spill off the coast of Orange County in October 2021 leaked almost 25,000 gallons of oil and triggered the Governor to declare a state of emergency. Over 750 miles of shoreline underwent cleanup efforts. Sadly, this was a relatively small spill: in 2015, a pipeline ruptured in Santa Barbara and spilled 126,000 gallons of oil, much of which flowed to the ocean and caused extensive ecological damage. Spills of up to 3 million gallons checker California’s oil history.
2. Oil production in California. California has about four percent of the nation's total crude oil reserves and produced almost 131 million barrels of crude oil in 2021. There are about 100,000 oil wells in California, mostly in Kern and Los Angeles counties. While California is a top-10 oil-producing state, production has been declining since the mid-1980s, with California having dropped from third to seventh among oil-producing states (as of 2021). The oil and gas sector is a major employer in some areas. According to the American Petroleum Institute, the oil and gas industry in California supported 1,059,000 total jobs (164,600 direct and 894,400 indirect), or 4.3% of California’s total employment, and contributed $199.3 billion to California’s gross domestic product ($85.3 billion direct and $114 billion indirect), 6.4% of the state’s total in 2019.
3. Magnitude of foreign oil imports to California. California produces only about 2% of its daily oil consumption; it produces about 391,000 barrels of oil per day and consumes 1.8 million barrels of oil per day. California’s dependence on foreign oil has grown as Californian supply has dropped and Alaskan imports have fallen. According to the most recent data available from the CEC, in 2021, California’s refineries used 28.9% Californian oil, 14.9% Alaskan oil, and 56.2% foreign oil. The top three sources of foreign oil were Ecuador, Saudi Arabia, and Iraq, each accounting for approximately 20% of oil imports.
4. Human rights violations in countries providing oil to California. The United States Department of State issues annual Country Reports on Human Rights Practices for countries receiving U.S. assistance and all United Nations member states. These reports cover internationally recognized individual, civil, political, and worker rights, as set forth in the Universal Declaration of Human Rights and other international agreements.
5. The most recent Department of State reports covering 2021 qualitatively document some human rights transgressions in Ecuador, Saudi Arabia, and Iraq, the top oil exporters to California. None of these abuses were specifically liked to the oil industry, though scattered examples linked to oil extraction exist from previous years.
6. However, Californian oil production also has social and equity concerns. In California, 5.4 million people live within a mile of an oil or gas well (14% of the state’s population). Of these, 1.8 million, 92% people of color, live in an area heavily burdened by environmental pollution. Oil and gas extraction operations release harmful airborne chemicals, such as volatile organic compounds, hydrogen sulfide, particulate matter (PM_2.5), and ozone, damaging the environment and human health. Health risks include respiratory damage (e.g. asthma, reduced lung function, symptoms such as wheezing), perinatal consequences (e.g. preterm birth, low birth weight, heart defects, and other developmental problems), cardiovascular disease, and cancer. These ultimately lead to developmental problems, chronic health issues, and increased mortality. Previous legislation has recognized and attempted to mitigate the health risks of the oil and gas industry to Californians. AB 1647 (Muratsuchi, Chapter 589, Statutes of 2017) required refinery-related fenceline air monitoring systems starting in 2020, though environmental justice concerns remain regarding disproportionate impacts still affecting disadvantaged communities in proximity to oil and gas operations. SB 1137 (Gonzalez, Chapter 365, Statutes of 2022) establishes a health protection zone of 3,200 feet of a sensitive receptor, which includes residences, healthcare facilities, and schools. It prohibits CalGEM from approving new oil or gas development within this health protection zone. Impacts of oil extraction to people within the state should not be discounted.

Comments

1. Purpose of Bill. According to the author, “SB 15 simply asks whether California should be importing its oil from countries that do not share our values on human rights and environmental standards. The bill expresses the intent of the Legislature that the California Energy Commission report on the human rights records and environmental standards of the countries that we buy oil from. The measure would also require the Air Resources Board to report on its website the amount of particulate matter released into the air from tanker ship emissions from oil imported into the state. The bill is a recognition that California should not be importing oil from countries that do not share our California values. We can produce the oil we use, and keep the jobs and revenues inside our Golden State while protecting our environment.”
2. This looks familiar. Last session, SB 1319 (Grove) went through the Senate Committees on Natural Resources and Water and Environmental Quality and the Assembly Natural Resources Committee. Suggested amendments made by these committees are reflected in this session’s introduced SB 15.

Meeting California’s statutorily required emissions reduction goals necessitates a rapid movement away from oil production and consumption, both domestic and imported. This bill does not advance that goal.

1. Agency separation of reporting requirements makes comparison challenging. This bill gives CalGEM and CARB slightly different reporting requirements. It directs CARB to provide an estimate of GHG emissions associated with (a) the transportation of imported oil in California and (b) the transportation of Californian oil in California. This bill directs CalGEM, meanwhile, to provide references on its website to “air quality emissions data associated with transportation of oil imported into the state.” It is unclear if this means the GHG emissions associated with moving oil from its country of origin into California and not within California. The separation of these emission reports makes it challenging to directly compare the climate-warming impacts of transporting Californian oil and foreign oil. The two agencies are not tasked with collecting and presenting emissions data in a consistent way: “air quality emissions data” and “GHG emissions” are not necessarily equivalent. Further, CalGEM is responsible for regulating oil extraction within the state, not regulating oil imports, so it is not clear whether emissions from moving oil internationally are within its purview. Mobile emissions sources within the state fall under the purview of CARB.
2. California is increasing its oil exports as in-state demand falls. According to a report by Communities for a Better Environment using data from CEC and CARB, California refiners exported nearly 1.1 billion barrels, or 34%, of their total liquid petroleum fuels production during 2015–2019, an increase of 29% over the previous 5 years. Exporting oil also emits GHGs and other air pollutants. The question arises whether oil exports could be reduced to partially ameliorate the environmental and social concerns of imported oil. Reporting emissions associated with transporting Californian oil out of the state would be an important component to complete the picture this policy is trying to shed light on.
3. No clear path forward to monitor environmental standards of oil production in foreign countries. This bill specifies that the CEC should use the U.S. Department of State’s human rights abuses reports to assess the countries from which California is sourcing its oil. However, the bill does not specify a data source to evaluate the environmental impacts of oil production in foreign countries.

Related/Prior Legislation

SB 1319 (Grove, 2022) was the previous version of this bill. The bill died in the Assembly Appropriations Committee.

SR 98 (Wilk, 2022) would have resolved the environmental, human rights, and political disadvantages of importing oil from the Amazon region over using Californian oil. The resolution died in the Senate Rules Committee.

SB 1137 (Gonzalez, Chapter 365, Statutes of 2022) established a health protection zone of 3,200 feet of a sensitive receptor, which includes residences, healthcare facilities, and schools. The bill prohibited CalGEM from approving new oil or gas development within this health protection zone.

AB 3217 (Gloria, 2020) would have required, no later than December 31, 2023, CARB, in cooperation with CalGEM and CEC, to complete and publish an analysis of the life-cycle GHG emissions associated with crude oil produced in the state, as prescribed. The bill died in the Assembly Natural Resources Committee.

AB 1647 (Muratsuchi, Chapter 589, Statutes of 2017) required a refinery-related community air monitoring system, as defined, to be installed on or before January 1, 2020, as specified, and requires an air district to design, develop, install, operate, and maintain the refinery-related community air monitoring system or to contract with a third party to provide those services. The bill required an owner or operator of a petroleum refinery to develop, install, operate, and maintain a fence-line monitoring system, as defined, on or before January 1, 2020, as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• CARB estimates ongoing costs of about $435,000 annually (Oil, Gas, and Geothermal Administrative Fund [OGGAF]) to calculate GHG and criteria emissions factors associated with the import, production, and export of oil in California; determine and revise pathway differences and emission rates for various countries; collaborate with the U.S. Environmental Protection Agency (EPA), CEC, and stakeholders; and develop and publish a report, among other things.
• CalGEM within the Department of Conservation estimate that any costs would be minor and absorbable.

SUPPORT: (Verified 5/18/23)

California Independent Petroleum Association

City of Taft

County of Fresno

County of Kern

Geoguidance Drilling Services, INC

Global Elastomeric Products, INC.

Greater Bakersfield Chamber of Commerce

Hathaway LLC

Horizon Well Logging, INC.

Kern Citizens for Energy

Kern County Hispanic Chamber of Commerce

Kern County Taxpayers Association

Mission Oil Company

MMI Services, INC

Mountain View Resources, LLC

Nisei Farmers League

San Joaquin Facilities Management, INC.

Strata Credit Union

Trio Petroleum

Tulare Chamber of Commerce

Tulare County Economic Development Corporation

West Side Recreation & Park District

Westside Waste Management Co., INC.

38 Individuals

OPPOSITION: (Verified 5/18/23)

None received

ARGUMENTS IN SUPPORT: According to the California Independent Petroleum Association, “Lawmakers who continue to fight for the mitigation of climate change are hypocritical if they want to shut down California oil production only to supplant that oil with increased imports. Outsourcing our energy needs to countries that do not abide by California’s aggressive climate mitigation laws, and which emit massive amounts of greenhouse gases in transit to California ports and then pollute our coastal cities as they idle waiting to offload their foreign crude, goes against all logic. Only oil produced in California can help mitigate the climate crisis, make fuel affordable, and generate taxes here in our home state to fund vital services.”

Prepared by: Theresa Keates / E.Q. / (916) 651-4108

5/20/23 12:37:39

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SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

SB 15 (Grove) - Oil imports: air quality emissions data

Bill Summary:

This bill would express the intent of the Legislature that the California Energy Commission (CEC) monitor countries that export oil to California, and identify human rights abuses and environmental standards for oil production that are lower than California standards.

Fiscal Impact:

• The California Air Resources Board (ARB) estimates ongoing costs of about $435,000 annually (Oil, Gas, and Geothermal Administrative Fund [OGGAF]) to calculate GHG and criteria emissions factors associated with the import, production, and export of oil in California; determine and revise pathway differences and emission rates for various countries; collaborate with the U.S. Environmental Protection Agency (EPA), CEC, and stakeholders; and develop and publish a report, among other things.
• The CEC and the Geologic Energy Management Division (CalGEM) within the Department of Conservation estimate that any costs would be minor and absorbable.

Background:

California is a major oil and gas producing state, currently ranked seventh in the nation. The state produced roughly 131 million barrels of crude oil in 2021. The state uses more crude oil than it produces and has about one-tenth of the nation’s refining capacity. In the last several years, the amount of oil produced in California has continued to decline. In 2021, 29% of the oil supplied to California refineries came from in-state production, 15% came from Alaska, and 56% came from foreign sources. Imported oil is largely brought to the state by tankers and barges, though there is a small amount of foreign oil imported by rail. The transportation sector uses about 85% of the oil consumed in the state. An estimated 109 million metric tons of GHG emissions were driven by the transportation of global crude oil in 2018.

ARB does not currently track air quality emissions specifically for the transportation of oil from tankers to California. This bill, however, gives ARB access to PIIRA data from the CEC to get more granularity for tankers that import oil so that ARB can tease out with other data sources it can use for emission inventory development to calculate the emissions related to oil transportation.

The Petroleum Industry Information Reporting Act of 1980 (PIIRA). PIIRA requires certain qualifying petroleum industry companies to submit weekly, monthly, and annual data to the CEC. Businesses that ship, receive, store, process, and sell crude oil and petroleum products in the state file PIIRA reports. According to the CEC, “Analysis of data collected under PIIRA is an important part of the Energy Commission's responsibility to create a thorough understanding of the operations of the petroleum industry in California.”

Proposed Law:

This bill would express the intent of the Legislature that the CEC monitor countries that export oil to California, and identify human rights abuses and environmental standards for oil production that are lower than California’s standards. Specifically, this bill would:

1. Express the intent of the Legislature that the CEC monitor foreign countries that export oil to California and identify on its internet website which of those countries have demonstrated human rights abuses, as documented by the United States Department of State, and which of those countries have lower environmental standards for the production of oil than California.
2. Require CARB to annually produce an assessment of the GHG emissions associated with the transportation of oil in California, and to include that assessment on CARB’s internet website.
3. Require the CEC to annually provide data collected, pursuant to PIIRA, to CARB for the purposes of the assessment.
4. Require CalGEM to provide a link on its internet website to air quality emissions data associated with the transportation of oil imported into the state.

Related Legislation:

SB X1-2 (Skinner, Chapter 1, Statutes of 2023) proposed several policies to address gasoline supply and pricing, including authorizing the CEC to establish a maximum gross gasoline refining margin (maximum margin) and penalty on gasoline sold by refiners in the state.

SB 1319 (Grove, 2022) was the previous version of this bill. The bill died in the Assembly Appropriations Committee.

SR 98 (Wilk, 2022) would have resolved the environmental, human rights, and political disadvantages of importing oil from the Amazon region over using Californian oil. This resolution died in the Senate Rules Committee.

SB 1137 (Gonzalez, Chapter 365, Statutes of 2022) established a health protection zone of 3,200 feet of a sensitive receptor, which includes residences, healthcare facilities, and schools. The bill prohibits CalGEM from approving new oil or gas development within this health protection zone.

AB 1647 (Muratsuchi, Chapter 589, Statutes of 2017) required a refinery-related community air monitoring system, as defined, to be installed on or before January 1, 2020, as specified, and would require an air district to design, develop, install, operate, and maintain the refinery-related community air monitoring system or to contract with a third party to provide those services. The bill required an owner or operator of a petroleum refinery to develop, install, operate, and maintain a fence-line monitoring system, as defined, on or before January 1, 2020, as specified.

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SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Steven Bradford, Chair

2023 - 2024 Regular

Bill No: SB 15 Hearing Date: 4/24/2023

SUBJECT: Oil imports: air quality emissions data

DIGEST: This bill would express the intent of the Legislature that the California Energy Commission (CEC) monitor countries that export oil to California and identify human rights abuses and lower environmental standards for oil production than California. This bill requires the California Air Resources Board (CARB) to report greenhouse gas (GHG) emissions data associated with oil transported in California and the Geologic Energy Management Division (CalGEM) to make available air quality emissions data associated with the transportation of imported oil.

ANALYSIS:

Existing law:

1. Requires refiners, under the Petroleum Industry Information Reporting Act (PIIRA) of 1980, to report monthly to the State Energy Resources Conservation and Development Commission (known as the California Energy Commission (CEC)), for each of their refineries, specified information, including the origin of petroleum receipts and the source of imports of finished petroleum products. (Public Resources Code §25352)
2. Imposes various limitations on the emissions of air contaminants for the control of air pollution from vehicular and non-vehicular sources. Requires the CARB to post on its internet website information on air quality conditions and trends statewide and to develop and conduct a program of monitoring airborne fine particles smaller than 2.5 microns in diameter (PM 2.5). (Health & Safety Code §39500 et seq.)
3. Establishes the CalGEM in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. (Public Resources Code §3000 et seq. and Public Resources Code §690)

This bill:

1. Expresses the intent of the Legislature that the CEC monitor foreign countries that export oil to California and identify on its internet website which of those countries have demonstrated human rights abuses, as documented by the United States Department of State or by human rights organizations, and which of those countries have lower environmental standards for the production of oil than California.
2. Requires CARB to annually produce an assessment of the GHG emissions associated with the transportation of oil in California, and to include that assessment on CARB’s internet website.
3. Requires the CEC to annually provide data collected, pursuant to PIIRA, to CARB for the purposes of the assessment.
4. Requires the CalGEM to provide a link on its internet website to air quality emissions data associated with the transportation of oil imported into the state.

Background

Per the Senate Committee on Environmental Quality:

Climate change and fossil fuels. The burning of fossil fuels is the main source of GHGs causing climate change. California’s statutory emission reduction goals dictate that GHG emissions be reduced to 40 percent below the 1990 level by 2030 (updated to 48 percent in CARB’s 2022 Scoping Plan) and reduced to at least 85 percent below 1990 levels by 2045. Net zero emissions (carbon neutrality) are to be achieved by 2045.

Due to initiatives to meet these goals such as the Advanced Clean Car Standards, Low Carbon Fuel Standard requirements, and improved land-use planning, California’s demand for crude oil has declined. Oil demand is likely to continue to fall as a result of these and additional policies, such as the Governor’s Executive Order N-79-20 which calls for the elimination of new internal combustion passenger vehicles by 2035. Not importing oil into California can cut emissions, but, ultimately, any credible plan to meet California’s climate goals will lean heavily on phasing out oil production and consumption.

Oil production poses environmental risk. All oil production poses environmental risk no matter where it is produced. The largest portion of imported oil to California comes from Ecuador. Much of this oil is sourced from the Amazon rainforest, which is home to the highest biodiversity on the planet and functions as a significant climate-stabilizing carbon sink. Oil extraction continues to encroach into the Amazon including in Ecuador’s Yasuní National Park, a United Nations Educational, Scientific and Cultural Organization (UNESCO) recognized site home to several indigenous communities including two uncontacted tribes. The Ecuadoran Heavy Crude Oil Pipeline has ruptured twice in the last three years, causing extensive environmental damage. However, environmental damage related to oil extraction occurs in California as well, despite stringent environmental regulations. For example, an oil spill off the coast of Orange County in October 2021 leaked almost 25,000 gallons of oil and triggered the Governor to declare a state of emergency. Over 750 miles of shoreline underwent cleanup efforts. Sadly, this was a relatively small spill: in 2015, a pipeline ruptured in Santa Barbara and spilled 126,000 gallons of oil, much of which flowed to the ocean and caused extensive ecological damage. Spills of up to three million gallons checker California’s oil history.

Oil production in California. California has about four percent of the nation's total crude oil reserves and produced almost 131 million barrels of crude oil in 2021. There are about 100,000 oil wells in California, mostly in Kern and Los Angeles counties. While California is a top-10 oil-producing state, production has been declining since the mid-1980s, with California having dropped from third to seventh among oil-producing states (as of 2021). The oil and gas sector is a major employer in some areas. According to the American Petroleum Institute, the oil and gas industry in California supported 1,059,000 total jobs (164,600 direct and 894,400 indirect), or 4.3 percent of California’s total employment, and contributed $199.3 billion to California’s gross domestic product ($85.3 billion direct and $114 billion indirect), 6.4 percent of the state’s total in 2019.

Magnitude of foreign oil imports to California. California produces only about two percent of its daily oil consumption; it produces about 391,000 barrels of oil per day and consumes 1.8 million barrels of oil per day. California’s dependence on foreign oil has grown as Californian supply has dropped and Alaskan imports have fallen. According to the most recent data available from the CEC, in 2021, California’s refineries used 28.9 percent Californian oil, 14.9 percent Alaskan oil, and 56.2 percent foreign oil. The top three sources of foreign oil were Ecuador, Saudi Arabia, and Iraq, each accounting for approximately 20 percent of oil imports.

Human rights violations in countries providing oil to California. The United States Department of State issues annual Country Reports on Human Rights Practices for countries receiving U.S. assistance and all United Nations member states. These reports cover internationally recognized individual, civil, political, and worker rights, as set forth in the Universal Declaration of Human Rights and other international agreements.

The most recent Department of State reports covering 2021 qualitatively document some human rights transgressions in Ecuador, Saudi Arabia, and Iraq, the top oil exporters to California. None of these abuses were specifically linked to the oil industry, though scattered examples linked to oil extraction exist from previous years.

Comments

No clear path forward to monitor environmental standards of oil production in foreign countries. This bill specifies that the CEC should use the U.S. Department of State’s human rights abuses reports or those of other human rights organizations to assess the countries from which California is sourcing its oil. However, this bill does not specify a data source to evaluate the environmental impacts of oil production in foreign countries. The author and committee may wish to delete the reference to “or of other human rights organizations” so as to clarify the source of information on human rights abuses is the U.S. Department of State.

This looks familiar. Last session, SB 1319 (Grove, 2022) which included the exact language of this bill received a vote of 35-0-5 on the Senate Floor. The bill was ultimately held in the Assembly Committee on Appropriations.

Dual referral. This bill passed out of the Senate Committee on Environmental Quality on March 29, 2023 with a vote of 7-0.

Prior/Related Legislation

SB X1-2 (Skinner, Chapter 1, Statutes of 2023) proposed several policies to address gasoline supply and pricing, including authorizing the CEC to establish a maximum gross gasoline refining margin (maximum margin) and penalty on gasoline sold by refiners in the state.

SB 1319 (Grove, 2022) was the previous version of this bill. The bill died in the Assembly Appropriations Committee.

SR 98 (Wilk, 2022) would have resolved the environmental, human rights, and political disadvantages of importing oil from the Amazon region over using Californian oil. This resolution died in the Senate Rules Committee.

SB 1137 (Gonzalez, Chapter 365, Statutes of 2022) established a health protection zone of 3,200 feet of a sensitive receptor, which includes residences, healthcare facilities, and schools. The bill prohibits CalGEM from approving new oil or gas development within this health protection zone.

AB 1647 (Muratsuchi, Chapter 589, Statutes of 2017) required a refinery-related community air monitoring system, as defined, to be installed on or before January 1, 2020, as specified, and would require an air district to design, develop, install, operate, and maintain the refinery-related community air monitoring system or to contract with a third party to provide those services. The bill required an owner or operator of a petroleum refinery to develop, install, operate, and maintain a fence-line monitoring system, as defined, on or before January 1, 2020, as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT:

Bynum Inc.

Supervisor Jeff Flores, Kern County-District 3

Supervisor David Couch, Kern County-District 4

California Independent Petroleum Association (CIPA)
City of Taft
County of Fresno
Di Drill Survey Services

General Production Service of CA

GeoGuidance Drilling Services, Inc.
Global Elastomeric Products, Inc.
Greater Bakersfield Chamber of Commerce
Hathaway LLC
Horizon Well Logging, Inc.
INNEX California Inc.
Kern Citizens for Energy
Kern County Board of Supervisors

Kern County Hispanic Chamber of Commerce
Kern County Taxpayers Association
Mission Oil Company
MMI Services, Inc.
Nisei Farmers League
Pensinger Trailer Rentals

RC Petroleum Consulting

RLW Enterprises

San Joaquin Facilities Management, Inc.
Strata Credit Union
Trio Petroleum LLC
Truitt Corporation

Tulare Chamber of Commerce
Tulare County Economic Development Corporation
Valley Perforating Company

West Side Recreation & Park District
Westside Waste Management Co., Inc.
Weststar

Several Individuals

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the author:

SB 15 simply asks whether California should be importing its oil from countries that do not share our values on human rights and environmental standards. The bill expresses the intent of the Legislature that the California Energy Commission report on the human rights records and environmental standards of the countries that we buy oil from. The measure would also require the Air Resources Board to report on its website the amount of particulate matter released into the air from tanker ship emissions from oil imported into the state. The bill is a recognition that California should not be importing oil from countries that do not share our California values. We can produce the oil we use, and keep the jobs and revenues inside our Golden State while protecting our environment.

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SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Allen, Chair

2023 - 2024 Regular

Bill No: SB 15

SUBJECT: Oil imports: air quality emissions data.

DIGEST: This bill would express the intent of the Legislature that the California Energy Commission (CEC, formerly the State Energy Resources Conservation and Development Commission) monitor countries that export oil to California and identify human rights abuses and lower environmental standards for oil production than California. It would require the California Air Resources Board (CARB) to report greenhouse gas (GHG) emissions data associated with oil transported in California and the Geologic Energy Management Division (CalGEM) to make available air quality emissions data associated with the transportation of imported oil.

ANALYSIS:

Existing law:

1. Establishes CalGEM in the Department of Conservation as the regulator of the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. (Public Resources Code (PRC) § 3100 et seq., PRC § 690)
2. Requires, under the Petroleum Industry Information Reporting Act of 1980, refiners, as defined, to report monthly to the CEC, for each of their refineries, specified information, including petroleum sales volumes and prices, and the origin of petroleum and finished petroleum products receipts. (PRC § 25350 et seq.)
3. Establishes CARB as the state agency charged with monitoring and regulating sources of GHG emissions and other air pollutants. Existing law requires CARB to make available, and update at least annually, on its internet website the emissions of GHGs, criteria pollutants, and toxic air contaminants for certain facilities in the state, and to annually present an informational report to a specific legislative committee on the reported emissions of GHGs, criteria pollutants, and toxic air contaminants from certain energy and industry sectors, as prescribed. (Health and Safety Code § 39500 et seq.)

This bill:

1. Expresses the intent of the Legislature that the CEC monitor foreign countries that export oil to California and identify on its internet website which of those countries have demonstrated human rights abuses, as documented by the United States Department of State or by human rights organizations, and which of those countries have lower environmental standards for oil production than California.
   
2. Requires CARB to annually produce an assessment of the GHG emissions associated with the transportation of oil in California, both oil imported to and produced in California, and to include that assessment on the Board’s internet website.
3. Requires the CEC to annually provide data to CARB for the purposes of this assessment pursuant to the Petroleum Industry Information Reporting Act of 1980.
4. Requires CalGEM to provide a link on its internet website to air quality emissions data associated with the transportation of oil imported into the state.
   

Background

1. Climate change and fossil fuels. The burning of fossil fuels is the main source of GHGs causing climate change. California’s statutory emission reduction goals dictate that GHG emissions be reduced to 40% below the 1990 level by 2030 (updated to 48% in CARB’s 2022 Scoping Plan) and reduced to at least 85% below 1990 levels by 2045. Net zero emissions (carbon neutrality) are to be achieved by 2045.
   
   Due to initiatives to meet these goals such as the Advanced Clean Car Standards, Low Carbon Fuel Standard requirements, and improved land-use planning, California’s demand for crude oil has declined. Oil demand is likely to continue to fall as a result of these and additional policies, such as the Governor’s Executive Order N-79-20 which calls for the elimination of new internal combustion passenger vehicles by 2035. Not importing oil into California can cut emissions, but, ultimately, any credible plan to meet California’s climate goals will lean heavily on phasing out oil production and consumption.
2. Oil production poses environmental risk. All oil production poses environmental risk no matter where it is produced. The largest portion of imported oil to California comes from Ecuador. Much of this oil is sourced from the Amazon rainforest, which is home to the highest biodiversity on the planet and functions as a significant climate-stabilizing carbon sink. Oil extraction continues to encroach into the Amazon including in Ecuador’s Yasuní National Park, a United Nations Educational, Scientific and Cultural Organization (UNESCO) recognized site home to several indigenous communities including two uncontacted tribes. The Ecuadoran Heavy Crude Oil Pipeline has ruptured twice in the last three years, causing extensive environmental damage. However, environmental damage related to oil extraction occurs in California as well, despite stringent environmental regulations. For example, an oil spill off the coast of Orange County in October 2021 leaked almost 25,000 gallons of oil and triggered the Governor to declare a state of emergency. Over 750 miles of shoreline underwent cleanup efforts. Sadly, this was a relatively small spill: in 2015, a pipeline ruptured in Santa Barbara and spilled 126,000 gallons of oil, much of which flowed to the ocean and caused extensive ecological damage. Spills of up to 3 million gallons checker California’s oil history.
3. Oil production in California. California has about four percent of the nation's total crude oil reserves and produced almost 131 million barrels of crude oil in 2021. There are about 100,000 oil wells in California, mostly in Kern and Los Angeles counties. While California is a top-10 oil-producing state, production has been declining since the mid-1980s, with California having dropped from third to seventh among oil-producing states (as of 2021). The oil and gas sector is a major employer in some areas. According to the American Petroleum Institute, the oil and gas industry in California supported 1,059,000 total jobs (164,600 direct and 894,400 indirect), or 4.3% of California’s total employment, and contributed $199.3 billion to California’s gross domestic product ($85.3 billion direct and $114 billion indirect), 6.4% of the state’s total in 2019.
4. Magnitude of foreign oil imports to California. California produces only about 2% of its daily oil consumption; it produces about 391,000 barrels of oil per day and consumes 1.8 million barrels of oil per day. California’s dependence on foreign oil has grown as Californian supply has dropped and Alaskan imports have fallen. According to the most recent data available from the CEC, in 2021, California’s refineries used 28.9% Californian oil, 14.9% Alaskan oil, and 56.2% foreign oil. The top three sources of foreign oil were Ecuador, Saudi Arabia, and Iraq, each accounting for approximately 20% of oil imports.
5. Human rights violations in countries providing oil to California. The United States Department of State issues annual Country Reports on Human Rights Practices for countries receiving U.S. assistance and all United Nations member states. These reports cover internationally recognized individual, civil, political, and worker rights, as set forth in the Universal Declaration of Human Rights and other international agreements.
   
   The most recent Department of State reports covering 2021 qualitatively document some human rights transgressions in Ecuador, Saudi Arabia, and Iraq, the top oil exporters to California. None of these abuses were specifically liked to the oil industry, though scattered examples linked to oil extraction exist from previous years.
6. However, Californian oil production also has social and equity concerns. In California, 5.4 million people live within a mile of an oil or gas well (14% of the state’s population). Of these, 1.8 million, 92% people of color, live in an area heavily burdened by environmental pollution. Oil and gas extraction operations release harmful airborne chemicals, such as volatile organic compounds, hydrogen sulfide, particulate matter (PM_2.5), and ozone, damaging the environment and human health. Health risks include respiratory damage (e.g. asthma, reduced lung function, symptoms such as wheezing), perinatal consequences (e.g. preterm birth, low birth weight, heart defects, and other developmental problems), cardiovascular disease, and cancer. These ultimately lead to developmental problems, chronic health issues, and increased mortality. Previous legislation has recognized and attempted to mitigate the health risks of the oil and gas industry to Californians. AB 1647 (Muratsuchi, Chapter 589, Statutes of 2017) required refinery-related fenceline air monitoring systems starting in 2020, though environmental justice concerns remain regarding disproportionate impacts still affecting disadvantaged communities in proximity to oil and gas operations. SB 1137 (Gonzalez, Chapter 365, Statutes of 2022) establishes a health protection zone of 3,200 feet of a sensitive receptor, which includes residences, healthcare facilities, and schools. It prohibits CalGEM from approving new oil or gas development within this health protection zone. Impacts of oil extraction to people within the state should not be discounted.

Comments

1. Purpose of Bill. According to the author, “SB 15 simply asks whether California should be importing its oil from countries that do not share our values on human rights and environmental standards. The bill expresses the intent of the Legislature that the California Energy Commission report on the human rights records and environmental standards of the countries that we buy oil from. The measure would also require the Air Resources Board to report on its website the amount of particulate matter released into the air from tanker ship emissions from oil imported into the state. The bill is a recognition that California should not be importing oil from countries that do not share our California values. We can produce the oil we use, and keep the jobs and revenues inside our Golden State while protecting our environment.”
2. This looks familiar. Last session, SB 1319 (Grove) went through the Senate Committees on Natural Resources and Water and Environmental Quality and the Assembly Natural Resources Committee. Suggested amendments made by these committees are reflected in this session’s introduced SB 15.

Meeting California’s statutorily required emission reduction goals necessitates a rapid movement away from oil production and consumption, both domestic and imported. This bill does not advance that goal. If the Committee decides to advance this proposal, the following comments provide suggestions to further the completeness and transparency of oil transportation emissions, environmental impact, and human rights reporting required by this bill.

1. Agency separation of reporting requirements makes comparison challenging. This bill gives CalGEM and CARB slightly different reporting requirements. It directs CARB to provide an estimate of GHG emissions associated with (1) the transportation of imported oil in California and (2) the transportation of Californian oil in California. This bill directs CalGEM, meanwhile, to provide references on its website to “air quality emissions data associated with transportation of oil imported into the state.” It is unclear if this means the GHG emissions associated with moving oil from its country of origin into California and not within California. The separation of these emission reports makes it challenging to directly compare the climate-warming impacts of transporting Californian oil and foreign oil. The two agencies are not tasked with collecting and presenting emissions data in a consistent way: “air quality emissions data” and “GHG emissions” are not necessarily equivalent. Further, CalGEM is responsible for regulating oil extraction within the state, not regulating oil imports, so it is not clear whether emissions from moving oil internationally are within its purview. Mobile emissions sources within the state fall under the purview of CARB. Moving forward, the author may wish to consider more effective reporting requirements that achieve the desired air quality comparisons by specifying pollutants to report and appropriately designating agency responsibility, especially as it pertains to any emissions occurring outside of California.
2. California is increasing its oil exports as in-state demand falls. According to a report by Communities for a Better Environment using data from CEC and CARB, California refiners exported nearly 1.1 billion barrels, or 34%, of their total liquid petroleum fuels production during 2015–2019, an increase of 29% over the previous 5 years. Exporting oil also emits GHGs and other air pollutants. The question arises whether oil exports could be reduced to partially ameliorate the environmental and social concerns of imported oil. Reporting emissions associated with transporting Californian oil out of the state would be an important component to complete the picture this policy is trying to shed light on.
3. No clear path forward to monitor environmental standards of oil production in foreign countries. This bill specifies that the CEC should use the U.S. Department of State’s human rights abuses reports or those of other human rights organizations to assess the countries from which California is sourcing its oil. However, the bill does not specify a data source to evaluate the environmental impacts of oil production in foreign countries. Moving forward, the author may wish to consider providing more specificity for data sources documenting environmental standards for oil production in other countries.

DOUBLE REFERRAL:

If this measure is approved by the Senate Environmental Quality Committee, the do pass motion must include the action to re-refer the bill to the SenateEnergy, Ultilies, and Communications Committee.

Related/Prior Legislation

SB 1319 (Grove, 2022) was the previous version of this bill. This bill died in the Assembly Appropriations Committee.

AB 3217 (Gloria, 2020) would have required, no later than December 31, 2023, CARB, in cooperation with CalGEM and CEC, to complete and publish an analysis of the life-cycle GHG emissions associated with crude oil produced in the state, as prescribed. This bill died in the Assembly Natural Resources Committee.

SR 98 (Wilk, 2022) would have resolved the environmental, human rights, and political disadvantages of importing oil from the Amazon region over using Californian oil. This resolution died in the Senate Rules Committee.

SB 1137 (Gonzalez, Chapter 365, Statutes of 2022) established a health protection zone of 3,200 feet of a sensitive receptor, which includes residences, healthcare facilities, and schools. This bill prohibits CalGEM from approving new oil or gas development within this health protection zone.

AB 1647 (Muratsuchi, Chapter 589, Statutes of 2017) requires a refinery-related community air monitoring system, as defined, to be installed on or before January 1, 2020, as specified, and would require an air district to design, develop, install, operate, and maintain the refinery-related community air monitoring system or to contract with a third party to provide those services. The bill requires an owner or operator of a petroleum refinery to develop, install, operate, and maintain a fence-line monitoring system, as defined, on or before January 1, 2020, as specified.

SOURCE:

Author

SUPPORT:

California Independent Petroleum Association (CIPA)

Championx/Norris Rods

City of Taft

County of Fresno

County of Kern

Geoguidance Drilling Services, INC

Global Elastomeric Products, INC.

Kern Citizens for Energy

Kern County Taxpayers Association

Mission Oil Company

Mmi Services, INC

Mountain View Resources, LLC

Nisei Farmers League

San Joaquin Facilities Management, INC.

Strata Credit Union

West Side Recreation & Park District

Westside Waste Management Co., INC.

35 Individuals

OPPOSITION:

None received

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