California Bill Would Hit Oil Companies With $1 Million Penalty for Health Impacts

Monic Uriarte was thrilled to get approved for an affordable apartment in Los Angeles’ University Park, close to USC. But soon after she and her family moved there in 2004, they started experiencing headaches and other illnesses.

Her mother was diagnosed with asthma at age 70. Her daughter had to sleep propped up because she’d get nosebleeds so bad she’d choke. On sweltering days, when they opened the windows, they noticed the air had a nauseatingly sweet taste.

Uriarte eventually learned they’d moved into an apartment just 30 feet from an area with  dozens of oil wells and a gas processing facility, hidden behind layers of brick and iron and trees.

“Our bodies were the oil company’s filters,” Uriarte said.

That realization kick-started Uriarte’s career as an environmental activist. Now she’s advocating for a statewide measure, backed by climate and environmental groups, that would impose what is likely the strongest law in the nation to hold oil and gas companies accountable when their operations make people sick. The bill, SB 556, comes on the heels of an industry-funded referendum campaign that halted a law to create buffer zones, or “setbacks,” between oil and gas wells and homes, schools, parks and health clinics.

It also emerges in the context of the U.S. Supreme Court ruling on April 24 that allows lawsuits filed by cities and states against fossil fuel companies over climate change to move forward in state courts. Hundreds of such climate cases have been filed worldwide, but SB 556 may be the first policy that would specifically link drilling to paid compensation for acute health impacts. It’s already passed out of an important legislative committee, despite a pro-business law group’s warning that it would be extremely difficult to attribute harm to specific wells.

In the last decade, much more research on the harmful effects of oil and gas wells on human health has been published, including their disproportionate impacts on low-income communities, where the dirtiest and most productive wells are often located. Chronic exposure is as harmful as breathing freeway exhaust or secondhand smoke. A recent study that examined the health of residents living within the Las Cienegas Oil Field in South Los Angeles — where Uriarte lived with her family — found that people within 200 meters (656 feet) and downwind from wells reported symptoms including wheezing; eye and nose irritation; sore throats; dizziness; and weaker lungs overall.

SB 556 says children or seniors diagnosed with lung ailments, those who endure dangerous pregnancies and residents diagnosed with cancer who live within 3,200 feet of an active well can sue companies and their board members. The payout runs between $250,000 and $1 million, with potential for doubling or tripling penalties as a “deterrent.” About 2.76 million people in California live within that zone, according to FracTracker. State prosecuting authorities would also have the ability to sue companies to recoup costs for public health programs.

Companies would be presumed guilty from the onset, and bear the burden of proving that their operations didn’t make a claimant sick. A legislative analysis says that while this approach is “extraordinary,” it isn’t totally without precedent. Regulations in Pennsylvania, West Virginia and North Carolina hold oil drillers presumptively responsible for groundwater contamination near wells.

Beth Kent, a fellow in environmental law and policy at UCLA who hasn’t been involved with the bill, pointed to conclusions from the state’s own advisory panel in 2021 as evidence that the legislation’s central mechanism could hold up in court. The California Oil and Gas Public Health Rulemaking Scientific Advisory Panel affirmed “with a high level of certainty” that close proximity to wells is associated with perinatal and respiratory harms.

“That’s a strong hook for the causation argument,” Kent told Capital & Main.

The bill was inspired in part by the industry’s referendum campaign, which was accused of using misinformation to mislead voters and stopped California from implementing the setbacks law, according to Sen. Lena Gonzalez (D-Long Beach). The law’s future will be decided by voters in November 2024.

“I think [SB 556] is timely and it keeps up the momentum, and hopefully doesn’t allow residents to feel like their voices — even though [the setbacks law] is in limbo — that their voices aren’t heard,” said Gonzalez, author of SB 556.

As a result of the pending referendum, Gov. Gavin Newsom’s administration asked lawmakers to eliminate a $2.24 million budget request to implement the setbacks law. The money would have funded nine regulators.

Representatives from the Western States Petroleum Association and the Civil Justice Association of California, a group that advocates for business protections from litigation, argued the bill’s proposals for companies to avoid liability were vague. They also said it’s impossible to prove a well caused an illness, rather than another source, such as tailpipe emissions from diesel trucks.

“This would almost eliminate oil production in California,” warned Paul Deiro, the senior director at WSPA, at a hearing.

The bill also makes companies “jointly and severally” liable, meaning one could attempt to recoup costs from other suspected polluters if the first company believes a person’s ill health was the result of other sources besides its oil and gas wells.

For Uriarte, who no longer lives near wells, ending all urban drilling should be the state’s goal. Last year her daughter, Nalleli Cobo, won a prestigious environmental justice prize for her work with her mother organizing residents against the oil drilling site. Cobo was diagnosed in 2020 with reproductive cancer, which Uriarte suspects may have been caused by pollution from the wells.

The site, operated by the company AllenCo, shut down in 2013. A criminal case filed by the city of L.A. against AllenCo grinds on. The California Geologic Energy Management Division, which oversees the plugging of old wells, told Capital & Main it finished depressurizing the wells in January.

Uriarte says she’s advocating on behalf of all her friends and former neighbors who still live near active oil and gas sites, as well as poor people worldwide who bear the brunt of climate change.

“I prefer to have good health than millions of dollars in my bank account. I would prefer that my daughter was never diagnosed with cancer,” Uriarte said.

Further south, in the L.A. community of Wilmington, Dulce Altamirano’s home is about a mile away from a Phillips 66 oil refinery and an oil drilling site owned by Warren E&P, and a few blocks from the 110 Freeway. She likely wouldn’t qualify for compensation under SB 556’s terms, but she’s advocating for those who would.

Altamirano lived in the neighborhood for more than two decades before learning that fossil fuel production could be adversely impacting her family’s health. She carried five children there, and now they have various health issues, including eczema and headaches, that she attributes to the wells and the refinery.

Like Uriarte, she got involved in advocacy after environmental justice organizers helped her understand the effects of oil drilling. She used to think urban pumpjacks were pumping water, a belief she said is still common among her neighbors.

“My neighbors get sick and when I tell them it’s the oil wells, they say, ‘Well, I’m old, this is how I’m going to die,’” Altamirano told Capital & Main. “I’m stubborn. I want to believe in a different future where my children and grandchildren aren’t getting cancer, because I’m fighting for their future.”

SB 556 will be heard by the state Senate’s Appropriations Committee, where lawmakers may place it in a “suspense file” reserved for legislation with substantial costs to the state. It’s also a way for legislators to kill bills without much fanfare. If it’s placed in suspense, SB 556 will have a chance to get out of it during another hearing on May 18.