Oil companies sue Monterey County over Measure Z.

Measure Z is heading to court. 

On Dec. 14, oil companies Chevron and Aera filed separate lawsuits against Monterey County related to Measure Z, which would ban fracking, wastewater injection and all new oil development in the county. 

The measure passed in the Nov. 8 election by a 56-44 margin. 

The lawsuits, which were filed in Monterey County Superior Court, had been widely anticipated for months if the measure passed, and as Monterey County Counsel Charles McKee predicted, both claim that the county doesn't have jurisdiction over oil and gas operations.

Such jurisdiction, the lawsuits argue, is held solely by the state through the Division of Oil, Gas, and Geothermal Resources, and with respect to the disposition of wastewater, by the State Water Resources Control Board. 

Both lawsuits also claim implementation of the measure would amount to an unconstitutional "take" of private property under both the state and federal constitutions, and that the county must pay "just compensation."

Neither lawsuit provides an estimate in dollars of what that compensation would look like, but Aera's lawsuit states it would be "an extraordinary sum of money" and therefore "not ideal" for the county to have to pay it. 

Both companies entered into an agreement with the county on Dec. 12 that halts the implementation of all aspects of Measure Z except its ban on fracking. (There is currently no fracking in Monterey County.) The agreement is valid until litigation is complete, or if the county cancels it.

Additional plaintiffs in Chevron's suit include royalty holders and landowners who benefit from oil operations, including Peter, James and Martin Orradre and Stephen Boyum, as well as oil industry consultant Maureen Wruck and the San Ardo Union Elementary School District. The lawsuit claims the school district will be unable to issue the school bond that voters approved Nov. 8 without Chevron as part of the tax base.

Their complaint goes into detail about its San Ardo oil operation, describing the "steam chest"—essentially an expanding underground bubble of steam—that loosens up the crude oil, which "has the consistency of ketchup," so that the oil can be pumped more easily. 

Chevron's suit argues that new wells need to be put in to access the oil-rich edges of the steam chest, and that banning new wells "will result in a base decline in production by at least 20 percent per year throughout the remaining life of the San Ardo oil field.

"This will cause Chevron's production to decrease by roughly 800,000 barrels of oil in the first year alone," and that as a result of the ban on new wells, "the steam chest also risks rapid decline and eventual collapse, which will decimate production. Once the steam chest collapses, Chevron will not have any cost-effective way to reconstruct the steam chest."

The suit goes on to say drilling in San Ardo "is not inherently dangerous" and "does not cause harm" to local communities.

It also claims the measure is vague when it comes to definitions of what exactly constitutes a new well, or what exactly the measure means by banning wastewater impoundment or injection. 

"Measure Z is void for its vagueness under the United States and California constitutions because it fails to afford a person of ordinary intelligence warning of what conduct is prohibited or to afford a specific enough standard for its enforcement." 

In an email, McKee writes that he expects the case to be resolved before the wastewater injection ban—which allows the operators five to 15 years to phase out completely—would go into effect. 

"State law requires the county to defend valid initiatives and we intend to vigorously fight for Measure Z," he continues. "We will make strategic moves to put the county in the best position to be successful." 

The first hearing for the case is scheduled for April 18, 2017 at 9am.