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Los Angeles City Council Votes Unanimously to Ban Oil and Gas Extraction

On Friday, December 2, 2022, the Los Angeles City Council voted unanimously to ban all oil and gas drilling within the city and to phase out existing extraction over the next 20 years.

The Ordinance

The ordinance approved by the City Council amends the municipal (zoning) code to prohibit new oil and gas extraction within the city and to make all existing extraction activities a nonconforming use, regardless of the zone. The nonconforming use designation enables the city to force producers to wind down their existing operations over a period of 20 years. The city has also been studying the economics of the oil and gas properties within its jurisdiction. When completed, the studies may be used to shorten the wind down period if the city can demonstrate that the property owners have adequately recouped their investments in the now-nonconforming use.

In addition to the prohibition on new wells and forced wind down, the city has bolstered its rules regarding when a well is deemed to have been abandoned, which triggers an operator’s well plugging and abandonment obligations. For example, if a well is idle for more than six months, the nonconforming use designation expires and the well is no longer permitted to operate.

The Effect

The City reported 5,273 total wells within the city limits in August 2022, with 641 of those still active and another 1,350 idle. There was little doubt that the ordinance would pass when we first covered, in January 2022, the City Council’s decision to have the Planning Department draft the ordinance. Although the short term effect will be a cessation of permitting and new drilling, sizable oil and gas interests will still be in play for many years to come.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.