Oil company to file $1.2 billion lawsuit against county with 57k people–for banning fracking

Oil company to file $1.2 billion lawsuit against county with 57k people–for banning fracking

byWalter Einenkel  

 I've written before about oil interests threatening lawsuits against municipalities trying to ban fracking. Frequently the threat of financial violence (and a boatload of money in campaigning) is enough to dissuade people from voting to ban. Well, San Benito County, in California, voted on Measure J, to ban fracking from their county a couple of weeks ago. Yeehaw! Democracy!

Hold the phone.

Citadel Exploration has filed a $1.2 billion claim against the county.

The claim is a precursor to a much broader lawsuit expected to be filed by Citadel Exploration. The company is hoping to extract millions of barrels of oil from south San Benito County fields, just west of Bitterwater, Calif., with their plan called Project Indian

$1.2 billion dollars is a lot of money for a municipality of 57,600 people. Where does the big money number come from?
Citadel owners claim they could have extracted 20-40 million barrels of oil over the life of the project, a value they believe equals $1.2 billion.

"$1.2 billion. That's like asking for the moon. The county will file for bankruptcy and reorganize. He’s not going to get anything,” San Benito County Supervisor Jerry Muenzer said.


Needless to say, San Benito does not have that kind of scratch. They would have to declare bankruptcy. After San Benito officials go through the workings of their county's legal process, including a hearing on whether or not to grant an exception to Citadel, the board of supervisors will reject the claim. At that point, Citadel will file a lawsuit.

Their argument is that Measure J constitutes something called "regulatory taking." In layman's terms: you cannot restrict private property's uses when there's money to be made. It will be interesting to see how this plays out, as this may have far-reaching ramifications in whether or not citizens can regulate industries they feel are harmful to their lives.