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Plaintiffs Allege the Law Illegally Shuts Down Local CEQA-Compliant Energy Facilities

LOS ANGELES, April 25, 2025 /PRNewswire-PRWeb/ -- The Native Oil Producers and Employees of California (NOPEC) today announced it has filed a challenging the constitutionality of Senate Bill 1137 (SB 1137), a controversial law that threatens the backbone of California's energy industry.

The lawsuit [ / Case Number: 25STCP01509] was filed Wednesday in the Superior Court of Los Angeles County.

According to NOPEC:

SB 1137, enacted in September 2022, mandates an arbitrary 3,200-foot setback for oil operations. The law prevents new wells and disallows routine maintenance on existing facilities, undermining California's energy independence, endangering thousands of local jobs, harming national security, raising gasoline prices, and jeopardizing the economic stability of communities that rely on in-state oil production.

The filing comes on the heels of a similar suit filed last week by mineral and royalty owners against the law, group officials said.

"Californians deserve to have access to energy that is produced safely and responsibly within our state, rather than increasing our reliance on imported oil," said Rock Zierman, President of NOPEC. "SB 1137 intends to shut down California's oil and gas industry, although Californians use more than 1.8 million barrels of oil a day. A decrease in in-state oil production has contributed to recent news that two more California refineries are slated to close next year. Since imported crude costs $5-$6 more per barrel than in-state crude, SB 1137 also contributes to higher gasoline prices in California."

SB 1137 circumvented the legislative process as it was introduced and passed just five days before the end of the 2022 legislative session. There were no substantive committee hearings, expert testimonies, or scientific data analysis. Energy industry members and the scientific community were not allowed to ask questions, refute anti-oil activist claims, or offer real scientific evidence. The state relied upon the much-discredited Scientific Advisory Panel (SAP) report that compiled numerous studies that had nothing to do with California oil production and established no causation link between production facilities and environmental harms.

NOPEC and other opponents of the energy shutdown are pursuing a legal path to demonstrate that SB 1137, and any future legislation and law of its kind, is not legally sound. SB 1137 shuts down duly permitted operations that have mitigated all environmental impacts through adherence to the California Environmental Quality Act (CEQA), according to the suit.

California operators also produce the only California climate-compliant crude by being subject to the state's cap and trade climate program, officials said. Foreign oil imports are completely exempt from all of California's environmental rules and regulations.

"California's oil and gas industry is held to the most stringent environmental standards, with more than 20 state and federal agencies overseeing oil and gas production," said Ralph Combs, Manager of Regulatory, Community, & Government Affairs at The Termo Company, an independent California-based oil and gas exploration and production company. "In the end, SB 1137 will severely impact small royalty owners and mineral owners while producers will be all but shut down. This puts 55,000 jobs in the oil and gas sector at risk, leading to higher gas prices and an economic blow to California."

NOPEC's lawsuit seeks to demonstrate that the law under SB 1137, constitutes an illegal taking under Article 5 of the US Constitution. The law shuts down in-state production sites, duly permitted assets into which companies have invested millions of dollars, without any proven environmental harm. It also violates due process and equal protection, given that entities with much higher proven emissions that exist in the setback zones, such as landfills, ports, water treatment facilities, and other industrial sites, are not shut down by this or any other law. Instead of relying on unfounded claims, the state must prove its case in a court of law, where statements must be factual and supported by scientific evidence.

"California's lack of credible scientific backing and disregard for local energy requirements are the driving forces behind our legal challenge. We firmly believe this law constitutes an illegal taking under the U.S. Constitution and undermines the principles of due process and equal protection," stated Jonathan Gregory, CEO, RMX Resources LLC and Matrix Oil Corporation. "We must safeguard California's economic stability to ensure an affordable and dependable supply of climate-compliant oil to fulfill the needs of all Californians."

NOPEC remains committed to defending the interests of California's energy industry while advocating for the rights of its members and the broader community.

NOPEC is a California mutual benefit 501c(6) corporation which represents producer-operator entities as well as entities and individuals working in and around the oil and gas production industry. NOPEC promotes, protects, and defends the interests of all oil and gas producers in the State of California, as well as those producers' employees, vendors and other entities associated with the oil and gas industry.

Media Contact

Raul Riesgo, Native Oil Producers & Employees of California, 1 (562) 665-4659, [email protected],

SOURCE Native Oil Producers & Employees of California