The owner of the Inglewood Oil Field is suing the state of California in an attempt to invalidate a state law that will require the energy company to cease production and plug all of its wells — or pay costly fines.
In a lawsuit filed this week, Sentinel Peak, the sole owner and operator of the oil field, argues that Assembly Bill 2617 is an unconstitutional statute that will impose unreasonably high penalties on the company, forcing it to halt operations.
The law, signed by Gov. Gavin Newsom in September, requires all low-production wells in the Inglewood Oil Field to cease operations by March 2027 and all wells to be plugged by the end of 2030. Failure to meet those deadlines will result in a monthly $10,000 penalty for every well in violation.
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The law would effectively oversee the end of fossil fuel extraction in the Inglewood Oil Field, where drilling has occurred for a century. The 1,000-acre field — located in Culver City, Los Angeles’ Baldwin Hills and unincorporated Ladera Heights — has approximately 820 unplugged wells, including 420 that are actively pumping oil. Roughly 80% of these operating wells are considered low-producing, meaning they yield less than 15 barrels of oil or 60,000 cubic feet of gas per day.
Attorneys for Sentinel Peak said the law “represents an illegal attempt to coerce an individual company to stop operation of its legal business,” according to court documents. They allege that mandatory fines in particular, violate federal and state laws that forbid excessive monetary penalties.
“The monetary penalties imposed by AB 2716 are grossly disproportional to the gravity of the offense that it is designed to punish,” the lawsuit reads. “The imposed penalties are fixed and mandatory with no apparent upper limit.They have no relationship to any actual harm incurred by neighboring uses.”
The California Department of Conservation’s Geological Energy Management Division, the state oil and gas regulator, declined to comment on the litigation. But Assemblyman Isaac Bryan (D-Los Angeles), who authored the law, vowed to defend the legislation.
“Our community has stood strong for decades to close this dangerous low-producing oil field, and we will stand strong in court to protect those frontline communities who have long deserved the right to live a full and healthy life,” Bryan said. “The people of California spoke through their legislature that dangerous oil wells have no business right next to the community. It is the right and prerogative of the government to protect its people.”
The litigation is the latest sparring match over the landmark legislation. The original version of AB 2617 included $10,000-a-day fines for all low-producing oil wells statewide. However after negotiations with California’s oil lobby, the bill was narrowed to only the Inglewood Oil Field.
Sentinel Peak, a Denver-based energy company, said the law “intentionally singles out and discriminates against” their operation in the Inglewood Field.
“AB 2716 does not impose any requirements on other similarly situated oil production operations even if they also operate in proximity to residential areas,” the lawsuit reads. “The law applies to Petitioner as a ‘class of one.’”
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Environmental organizations say the state is within its rights to enact regulations designed to protect public health. The law intends to prevent toxic fumes from oil production from drifting into neighboring communities.
Sentinel Peak had previously agreed to plug all its 38 wells in Culver City by 2030. But this ensures the larger portion of the oil field will be capped.
“The state has a right to set limits on wells that have big environmental impact and little economic benefits,” said Jamie Court, president of Consumer Watchdog. “There is a compelling state interest in closing these wells to protect the community.”
Elected officials highlighted the health risks when Newsom signed the measure into law at the Kenneth Hahn Soccer Field, where children play soccer a short distance from the oil field’s pumpjacks.
“They feel like they are being targeted but they are running the largest urban oil field in nation,” Court said. “They’re not getting much oil and the environmental health impacts are well-documented. We’re not taking away their land, we’re just saying you can’t operate within 450 feet of a soccer field because it’s dangerous.”
