Oil politics animate California congressional race

By Maeve Reston, CNN

The damage from the recent California oil spill has so far been less disastrous than initially feared, but it has thrust the issue of offshore oil drilling on the West Coast into some of the most hotly contested US House races in the country.

The spill created a plume that threatened beaches and wetlands all along the edge of GOP Rep. Michelle Steel’s 48th Congressional District, one of three Golden State House districts Republicans flipped in November 2020. Democrats, hoping to stem the traditional losses from a president’s first midterm election, are trying to win back seats like the 48th District — and in offshore drilling they see a potential wedge issue that could alienate voters from their GOP representatives.

It has long been true in deep blue California, where the Democratic governor overwhelmingly survived an effort to recall him last month, that a sizable portion of Republican voters also are against new offshore drilling, creating a political issue that doesn’t cleave neatly along party lines. Candidates on both sides in the 48th District race, for example, are trying to show voters their commitment to protecting the environment while their campaigns point fingers over oil-related income in their respective financial portfolios.

The environmental damage is still being assessed but a spokesperson with the US Coast Guard overseeing cleanup said Friday they are highly confident that the amount of oil released will be closer to 25,000 gallons, rather than up to 131,000 gallons as previously feared.

Still, the incident has once again raised alarm about the threats of oil drilling to the coast. Environmentalists protesting outside Steel’s office last week called on her to support a ban on new offshore drilling that congressional Democrats are trying to include in President Joe Biden’s economic spending bill, likely hoping to put their GOP colleagues on record on the issue should it come up for a vote. Former Democratic Rep. Harley Rouda, whom Steel defeated last year and is running again for this seat, spoke at the protest, and last week released a digital ad that attacked what his campaign says is Steel’s lack of position on the issue. “She refuses to answer questions about banning offshore drilling,” the ad says. “When disaster strikes home, we know where Michelle Steel is — standing with her oil and gas industry donors.”

A Steel spokesperson did not directly respond to CNN’s questions about what her position is on banning new drilling off the West Coast. Neither did a spokeswoman for GOP Rep. Young Kim, a freshman Republican who flipped the nearby 39th District, another seat Biden carried last year that Democrats are hoping to contest in 2022.

When asked about her position on new offshore drilling leases, Steel’s aides said she is most focused on demanding accountability for the recent incident and exploring measures that will help guard against future spills, specifically by zeroing in on the environmental threats posed by the current backlog of ships at Los Angeles-area ports. Both Steel and Young were quick to call for a federal investigation into the pipeline’s history, the cause of the spill and the response of the oil company that operates the pipeline.

Shipping backlogs and drilling bans

During their time in office, California Republican governors from Pete Wilson to Arnold Schwarzenegger sought to play up their commitment to conservation as a bridge to voters beyond their party. And in this politically purple area of the state, Steel is leaning into environmental concerns too, calling the shipping backlog “an environmental & public health crisis.”

Steel introduced legislation last week, for example, that would prohibit cargo ships from idling or anchoring 24 miles off the Orange County coast for up to 180 days or until a point when the President declares the backlog in the ports of Los Angeles and Long Beach over. Preliminary reports about the spill from both the US Coast Guard and the Pipeline and Hazardous Materials Safety Administration indicated that the root cause of the rupture may have been a ship anchor that hooked the pipeline and created a tear.

In a tweet Wednesday, Steel commended Biden for “finally taking steps to solve the port backlog that likely led to the OC oil spill.” “Now he must make a disaster declaration,” she tweeted. “Unlike my opponent who is focused on political theatrics, I’m focused on finding timely and pragmatic solutions.”

Steel sent a letter to officials at the National Oceanic and Atmospheric Administration and US Coast Guard on Thursday asking them to re-examine and survey the nautical charts near all pipelines linked to offshore oil platforms near the Orange County coast, calling it an “emergency mapping issue” that could prevent another disaster.

In the effort to ban new offshore drilling, California’s congressional Democrats — led by Rep. Mike Levin, a former environmental attorney who represents south Orange County and North County San Diego — are pressing House leadership to retain a permanent ban on drilling in certain federal waters in the social safety net and climate package that Democrats are negotiating in Congress. In early September, the House Natural Resources Committee voted to approve language banning new offshore leasing in federal waters in the Pacific Ocean, the Atlantic Ocean and the Eastern Gulf of Mexico as part of their portion of the “Build Back Better Act.” It is unclear, however, whether the language will remain in the House bill as Democrats wrangle over the price tag — or whether it would survive in the Senate version because of potential objections from West Virginia Democratic Sen. Joe Manchin.

Republicans point out, however, that legislation banning new offshore oil drilling would not have prevented the recent spill near Huntington Beach, where the pipeline that ruptured some five miles offshore was installed in 1980.

There has been no new drilling in federal waters off the West Coast since 1984, but environmentalists and even some Republican officials in coastal states were alarmed when the Trump administration announced short-lived plans to drill off the coasts of California, Florida and within other previously protected federal waters in 2018. Biden signed an executive action in January halting new federal oil and gas drilling leases. Around the same time, California Democratic lawmakers introduced legislation — from Sen. Dianne Feinstein in the Senate and Rep. Jared Huffman in the House — that would make the drilling ban in federal waters off the West Coast permanent.

For years in California, it hasn’t just been Democrats and independents who have cited concerns about additional drilling, but also many Republicans who live near the coast. The state’s environmental consciousness has been shaped by the 1969 Santa Barbara oil spill, when a massive well blowout at a drilling rig — and the subsequent opening of a series of undersea faults — led as much as 4.2 million gallons of crude to gush into the ocean.

In a Public Policy Institute of California survey earlier this year, 72% of Californians opposed more drilling off the California coast and only 27% favored it. A full 70% of independents said they did not favor more drilling, as did 43% of Republicans, demonstrating how it can be an issue that transcends party lines.

“One of the things about environmental attitudes in California is that this is an area where Republicans and Democrats can coalesce around protecting the environment, the water, air and land,” said Mark Baldassare, president and CEO of the Public Policy Institute of California. Though beaches have reopened in Orange County, the cleanup continues and “how those members of Congress deal with the issue is now not going to be just an abstract issue, but a very concrete issue,” he said.

Financial interests in oil

So far, the fiercest battle over environmental politics in the wake of the recent oil spill is unfolding between Steel and Rouda as they begin to engage in what’s likely to be a 2022 rematch.

Rouda, who lost his seat to Steel last year 48.9% to her 51.1%, has charged that it was hypocritical for Steel to seek a major disaster declaration from Biden immediately following the spill, days after she voted against a government funding bill that provided additional funding for disaster relief. The former congressman and the Democratic Congressional Campaign Committee have sought to draw attention to Steel’s contributions from the oil and gas industry — which totaled $49,712 between 2019 and this year, according to OpenSecrets.

“She’s taking tens of thousands of dollars from donors tied to the oil and gas business and that’s why she’s unwilling to do the right thing, which is to come out and say she will not support additional offshore drilling,” Rouda told CNN. “I’ve been consistent since before coming into Congress that I want to see the offshore drilling stop for obvious reasons, as to the ramifications if there is an oil spill that we are now seeing firsthand.”

Rouda and the DCCC have tried to draw attention to royalty income that Steel and her husband have earned from oil companies — which totaled between $5,313 and $15,200 in the personal financial disclosure report that she filed with the House Clerk as a candidate in May of 2020. Assets in personal financial disclosures are reported in broad ranges.

But Rouda’s financial portfolio has oil ties as well. He reported earning capital gains income between $100,000 and $1 million from an exchange-traded fund known as Proshares Ultra Bloomberg Crude Oil that invests directly in oil futures, according to the 2019 person financial disclosure report he filed as a member of the House.

Rouda’s campaign argues that he’s not “directly invested in the oil production that’s covered our shores,” while claiming Steel’s personal finances are tied to “the very company responsible for the spill our community is cleaning up.” That is a reference to Steel and her husband’s past royalty income from Phillips 66, which fell between $202 and $1,200 over the nearly two-and-a-half-year period covered in the 2019 and 2020 candidate reports she filed with the House Clerk. (Amplify Energy, the company that operates the pipeline that ruptured off Orange County, reported in a filing to the US Securities and Exchange Commission that its largest customer in 2020 was Phillips 66).

When asked why Rouda invested in an exchange-traded fund that is pegged directly to the price of crude, his campaign said that the former congressman “is betting on a transition away from fossil fuels and towards a clean energy economy as we deplete this non-renewable resource.”

Steel’s campaign spokesman Lance Trover rejected that explanation of Rouda’s financial investment: “Voters recognize that is a phony response — he’s got oil investments and he just won’t own up to it. Just tell the truth.”

Trover called the renewed push by Democrats on a West Coast drilling ban political theater and a distraction. “They don’t want to talk about the real problem here — and that is that we have ships backed up off the coast for a gazillion miles and that is likely what caused this oil spill,” Trover said. “They don’t want to take on the President; they don’t want to point fingers at him,” he added, alluding to the supply chain bottleneck that Biden attempted to address last week.

“Democrats control every lever of government in this country, so if they wanted to get something done on this issue, they could do it today,” he added, even though Washington’s politically polarized climate has made it virtually impossible to move controversial legislation through the 50-50 Senate.

Trover predicted that California voters would pay more attention to what their leaders did when tragedy struck than debates over drilling policy that would not have directly prevented the crisis. “From the very first day, (Steel) was out there calling for the disaster declaration and looking at things like the SHIP ACT,” he said. “I think that’s what people and communities look to — people who stood up in the moment.”

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