BAKERSFIELD, Calif. (KERO) — A federal lawsuit is challenging California’s oil setback law, Senate Bill 1137, reopening a long-running debate over oil drilling, public health and property rights.
The lawsuit, filed by the federal government, seeks to overturn SB 1137, which restricts new oil drilling within 3,200 feet of sensitive sites such as homes, schools and hospitals. Supporters of the law say it is a critical public health protection, while oil producers argue it violates constitutional property rights.
SB 1137 took effect in 2023 after being approved by voters. The law bans new drilling within the setback zone, even in areas where oil production existed before nearby residential or commercial development.
Chad Hathaway, whose company Hathaway LLC operates oil properties in Kern County, said the law amounts to an unconstitutional taking.
“It’s an unconstitutional taking of our property,” Hathaway said. “You can’t take somebody’s property and not pay them reasonable compensation. That’s what SB 1137 did.”
Hathaway said the setback requirements eliminated nearly half of the mineral access his company depends on, including areas where oil wells predated surrounding homes.
“If the oil well was there before the house, and then the house moves in, all of a sudden you can’t drill anymore,” Hathaway said. “That’s unequal protection under the law.”
Environmental advocates counter that the law is based on extensive health research linking oil and gas operations to serious health risks.
“This is a commonsense health protection law,” said Cassie Siegel, an attorney with the Center for Biological Diversity. “Oil wells emit pollutants like benzene that cause cancer, asthma and heart disease, and can even harm babies in the womb.”
Siegel said the lawsuit, which was filed during the Trump administration, could have significant public health consequences if successful, even though she argues it would do little to increase oil production in California.
“Oil production in California has been declining for decades because reservoirs are depleted,” Siegel said. “Overturning this law would have real health impacts, but very little effect on production.”
The lawsuit comes as Kern County advances a new environmental review that would allow expanded oil permitting, raising questions about whether political momentum is shifting on energy policy.
Hathaway said rising energy costs are forcing policymakers to reconsider restrictions on oil production.
“We’re one refinery shutdown away from an $8-a-gallon gas crisis,” he said. “I do see the pendulum starting to swing — but nothing happens overnight.”
Legal experts say the case could take years to resolve. While the federal government may seek an injunction, California is expected to aggressively defend the law.
If the lawsuit moves forward, it could affect both state and federal land across California.
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