Oil and Gas Leases
The controversy over the development of California's oil and gas resources, the most valuable of which are located in and adjacent to some of the state's most spectacular beaches, has been going on since the first legislation permitting such development in 1921. Since 1969, the concern about potential environmental damage resulting from a spill and the desire to avoid marring the coast with unsightly development has outweighed the desire to generate revenue from new offshore oil development. While the Commission has not issued a new offshore oil development lease in nearly 50 years, the leases issued prior to 1969 continue to generate significant revenue to the state, as they have for 80 years. To ensure that the public fully benefits from existing development, the Commission operates a rigorous financial auditing program to ensure that California receives all the money it is owed from the development.
Offshore Oil and Gas Located in California Waters
There are 29 offshore oil and gas agreements in California waters, which are what remain of the more than 60 originally issued. These leases were issued prior to the catastrophic 1969 oil spill from Platform A in federal waters off Santa Barbara County, and some predate the formation of the Commission. Between 2010 and 2014, the bulk of the approximately $300 million generated annually for the state's General Fund from oil and gas agreements was from these offshore leases.
In 1921, the Legislature created the first tidelands oil and gas leasing program. Between 1921 and 1929, approximately 100 permits and leases were issued and over 850 wells were drilled in Santa Barbara and Ventura Counties. In 1929, the Legislature prohibited any new leases or permits. In 1933, however, the prohibition was partially lifted in response to an alleged theft of tidelands oil in Huntington Beach. It wasn't until 1938, and again in 1955, that the Legislature would allow new offshore oil and gas leasing. Except for limited circumstances, the Legislature has consistently placed limits on the areas that the Commission may offer for lease and in 1994, placed the entirety of California's coast off-limits to new oil and gas leases.
Offshore Oil and Gas Platforms and Islands
There are four offshore oil platforms in state waters off the coast of California. They are platforms Holly in Santa Barbara County, Eva and Emmy in Huntington Beach, and Esther off Seal Beach. There are also four large man-made islands in Long Beach, known as the Long Beach Unit; and one small man-made island, Rincon Island located off Rincon Beach in Ventura County.
Sacramento-San Joaquin Delta Oil and Gas
There are 31 onshore oil and gas agreements in the Sacramento-San Joaquin Delta areas. The Commission's interest in these areas is in the riverbeds. The only agreement that authorizes drilling on land under the Commission's jurisdiction was issued in 1940. The other 30 agreements provide compensation to the state for wells that either pass through or are draining gas from state lands.
School Lands Oil and Gas
Legislatively Granted Lands Offshore Oil and Gas
Some sovereign lands that were legislatively granted to local municipalities in the early 1900s included oil and gas. These grants are generally located in southern California and include cities such as Los Angeles, Newport Beach and Long Beach. Revenue derived from oil and gas leases on granted public trust lands are public trust assets of the state and may not be spent on general municipal purposes. Details about the oil and gas revenue from the legislative grants to Los Angeles and Newport Beach are available on the Annual Financial Statements by Grantee page. Revenue from the Long Beach oil and gas program is allocated under a net profits agreement where the state receives a percentage of the profits, the operator receives a percentage of the profits, and the City receives a percentage of the profits. Between 2010 and 2014, Long Beach's oil and gas program generated approximately $1.4 billion.
Offshore Oil and Gas Located in Federal Waters
The United States controls the issuance of new oil and gas leases in federal waters. While the Commission does not have control over that land, it has repeatedly objected to allowing new leases in the federal waters outside of the state boundary. The Commission's voice has been heard as it has been over twenty years since the federal government issued new leases. For more information on the federal leasing program, please visit the Bureau of Ocean Energy Management.