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Important Update

November 2017 ROAR Newsletter

March 2017 ROAR Newsletter

NARO California Working to Protect
YOUR Property Rights  

The Monterey County Courthouse is a simple 3-story structure nestled among the wooded hillsides between Monterey and Carmel-by-the-Sea, a spot better-suited for a luxury hotel or retreat, a rather unlikely site for a trial which may well prove pivotal to the future of oil and gas production in California, to California royalty owners, and to Monterey County’s financial future. On Monday, November 13, opening remarks were heard in the courtroom of Judge Thomas Wills as the legal challenge of Monterey County’s Measure Z began.  Measure Z, the latest in a series of anti-oil initiatives placed before California voters and passed by Monterey County voters in November 2016, was promoted as an anti-fracking ban and went on to ban surface activities in support of hydraulic fracturing and essentially all means of enhancing oil production and well maintenance, as well as imposing a ban on any new well drilling and use of injection wells as a means of storage or disposal of produced water.

     Key arguments against Measure Z center around
preemption, that is, the authority to regulate downhole activity in the state expressly belongs to the Division of Oil, Gas, and Geothermal Resources (DOGGR), and severability, meaning that no element of the Measure may be removed if it would result in grammatical or functional dysfunction, or if it would result in a Measure which would not have been successful at the polls (volition ).
     Six separate suits challenging Measure Z have been consolidated into one case; five of the original suits were filed on behalf of oil companies with the sixth being filed by NARO-California and a group of 80 local royalty owners who would be directly harmed should Measure Z withstand the legal challenge.
    Theodore Boutros, lead counsel for Chevron USA, began the day by providing an overview of the producers’ arguments against the Measure, centering around three elements supporting preemption, the California Public Resources Code Section 3106 (c), which identifies DOGGR as the designated regulator of oil and gas production, Senate Bill 4 (SB 4), California’s comprehensive plan to regulate enhanced production methods, a 1976 Attorney General’s opinion which identifies DOGGR as the regulator of downhole activity in the State, and the federal Safe Water Act. Other attorneys representing the individual oil companies followed with shorter presentations in support of issues pertinent to their companies, followed, most notably, by Edward Renwick, noted southern California petroleum attorney and VP of NARO-California’s Board, who spoke in support of NARO-California and affected local royalty owners.

     Next, from the Monterey County Counsel’s office, Gene Tanaka outlined the County’s position that while the County may not be able to regulate downhole activity, it is able to ban surface activity, and that the County viewed Measure Z as severable.  During his presentation, Tanaka found himself mired in a discussion of the definitions of produced water storage and disposal, as he was unable to satisfy Judge Wills’ questioning on the matter. Judge Wills ultimately recessed the Court to allow time for Mr. Tanaka to compose himself, but not until after he made a telling statement citing,
“The County’s interest in minimizing the effect of the initiative due to the ‘enormous financial exposure’ involving the oil industry.”

The day concluded with Savannah Fletcher, counsel for Protect Monterey County, which sponsored Measure Z, beginning her presentation in support of the Measure.  Her arguments centered around instances of case law  which, in her opinion, support local authority and the authority of Monterey County to implement Measure Z.  She was well-rehearsed, well spoken, and well-supported with a set of very high-quality visuals, as well as by a large cohort of supporting attorneys. Prospects are for a formidable and vigorous defense of Measure Z.

   Judge Wills’ calendar has allocated five days for the trial.


Watch for updates as this case unfolds.


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NARO California Logo

NARO California

Edward S. Hazard, President
Edward S. Renwick, Esq., Vice President
TBA, Secretary/Treasurer

Douglas H. Donath, Director

Matthew J. Finnegan, Esq., Director
Maribel A. Hernandez, Esq., Director
Mark O. Phillips, Director

Roy Reed, Director

Timothy R. Kustic, Director