Trump’s energy chief takes aim at California oil rules in Long Beach

from Alejandra Reyes-Velarde and Alejandro LazoCalMatters

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Last year, Long Beach did deal with an oil extraction company. The company will convert some of its land into public wetlands in exchange for the right to drill somewhere else. Then a state law designed to keep wells away from homes and schools thwarted the company’s plan to drill more. Now that pact has become fodder for the Trump administration’s war on California Democrats’ energy policies.

U.S. Energy Secretary Chris Wright visited the property owned by Synergy Oil & Gas on Wednesday with a message to Gov. Gavin Newsom: state policies are raising costs for Californians, and the Trump administration will challenge them.

Wright’s visit to Synergy’s site comes just a week after a U.S. District Court case refused the U.S. Department of the Interior’s request to suspend enforcement of California’s obstruction law pending a broader legal challenge.

“When you make energy more expensive by importing it and putting absurd regulations on it, you’re not only making it more expensive to pay your bills, but you’re making it so that energy-consuming businesses won’t locate (in) your state,” said Wright, standing between rows of Synergy-owned oil pumps near coastal wetlands.

Wright’s visit shows the active battle on many fronts between California and the White House over energy prices, especially gasoline. State gas prices are highest in the nationa gap that widened as a result of disruptions in the global oil market following US military strikes against Iran.

“California gas prices were stable — and under $5 a gallon — for about two years before Trump launched his reckless war on Iran that closed the Strait of Hormuz and drove up crude oil prices in red and blue states,” said Anthony Martinez, a spokesman for the governor. “Today in California, (Wright) is pointing the finger to distract from the fact that Americans have paid $10 billion more for gas since this war began.”

The California Law of Failures

Announced nearly a year ago, Long Beach and Synergy intended the deal to be mutually beneficial. Synergy would be able to drill new wells nearby, and the city would gain public space and a cut of Synergy’s new revenue.

But a recent setback law — which prohibits new oil wells within six-tenths of a mile of homes, schools and other populated areas — has made it nearly impossible to get permits, Synergy owner John McKeown said. The place Wright is talking about should be able to produce 6,000 barrels of oil a day. It only produces 100 barrels because of government restrictions, he said.

“What I’m trying to do is save 35 employees and I’m trying to produce (the oil) that we have,” he said Wednesday.

Long Beach Councilwoman Christina Duggan, who helped broker the agreement with Synergy, said the setback law hurts city finances. The city receives 8.5% of local oil revenues, funds earmarked for coastal infrastructure.

“We have wells off the coast of Long Beach on our oil island where we can’t drill new wells, and it’s so far from sensitive areas,” Duggan said. “It really does matter. We rely on oil production for revenue in Long Beach.”

Earlier this year, the Trump administration sued California over the setback law, arguing that it illegally blocks businesses that the federal government controls. The administration cited two land management laws, tMineral Leasing Act and the Federal Land Management Act and Policywhich authorize public lands for oil, gas and coal development.

While the case is pending, the U.S. Department of the Interior has sought a preliminary injunction barring the state from enforcing the obstruction law. A U.S. District Court judge rejected that request and called California’s setback law a “reasonable environmental regulation” that does not prohibit alternative methods of accessing oil in the state.

The U.S. District Court judge said the U.S. Department of the Interior has so far not shown it is likely to be able to prove the law conflicts with federal law.

The judge is also considering whether to allow community groups represented by Earthjustice and the Center for Biological Diversity to intervened in the case.

The reach of setback law extends beyond private landowners like Synergy. According to the US Department of Justice, this would invalidate about a third of California’s federally permitted oil and gas leases.

California’s failure “has absolutely nothing to do with public health,” Wright said Wednesday. “These failures are set at a level that will kill the industry.”

Newsom found himself in the middle

The setback law is just one front in a broader political battle that has put Newsom in an increasingly difficult position.

Newsom has sought to blame the White House for the increase in the price of gasclaiming that Trump’s actions were responsible. At the same time, he pushed back against growing criticism that California’s own environmental regulations are contributing to the cost of fuel. But his administration’s actions tell a more complicated story.

Oil companies have shut down refineries in recent months, causing the country to lose nearly 20 percent of its refining capacity. In response, California increasingly relies on importing more crude oil oil and gasoline. The governor last year arranged a deal to increase production at the California Oil Drilling Center in Kern County. The California Energy Commission also quietly repeal a law which gave state regulators the power to limit refiner profits and penalize oil companies for raising prices.

Newsom in 2024 pressed to delay parts of the oil-well shutdown law, saying regulators need more time to implement it. Legislators approved a compromise extending the deadline for monitoring wells near homes and schools for leaks by three-and-a-half years to July 2030, while maintaining restrictions on major buffer zones. Newsom signed the measure, delaying the detection of oil well leaks.

Growing federal pressure

The Trump administration has shown no interest in giving Newsom room to maneuver. He has pushed to expand oil production in California, including plans to revive offshore drilling along the coast at the site of the 2015 Refugio oil spill, which ruptured a pipeline now owned by Houston-based Sable Offshore Corp.

Wright invoked the Defense Production Act to order the restart of operations – local courts of first instance — claiming that oil is “vital to our national security and defense.” Attorney General Rob Bonta has Wright judged arguing that he had exceeded his authority.

Wright said he hopes to meet with Governor Newsom in the next few weeks to make his plea for more oil production in the state.

Plan for wider battles

The stakes of this legal confrontation extend far beyond a single pipeline.

Even if the Sable project itself won’t significantly change California’s oil supply, legal experts say the bigger story is what precedents the battles set. The case could open a window on how far federal officials can go, using national security or emergency powers, to override state authority — not just for pipelines but for new oil development more broadly.

“I have no doubt that now they’re going to expand it to try to apply the same theory to national emergency, to national security, to leasing everywhere,” said Deborah Sivas, an environmental law expert at Stanford. “They will use the same rationale.”

But Ethan Elkind, an expert on climate law at the University of California, Berkeley, said the strategy faces big odds in California, where oil and gas policy has shifted sharply against the new development.

“California is really going in the opposite direction,” Elkind said. “The idea of ​​trying to really expand oil and gas production in the state really flies in the face of where the politics and economic realities are in the state right now.”

In Long Beach, work to remove old wells on Synergy Oil & Gas property continues. For Christina Duggan, a city council member, the larger battles are secondary. She’s still keeping an eye on the city’s bottom line.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.