With California's pristine coastline providing a dramatic stage, a showdown is heating up over the state's efforts to prevent and clean up catastrophic oil spills -- the toughest standards in the country.

The state agency tasked with protecting ocean waters and beaches from an oil spill like the Exxon Valdez disaster is running short of money, and a battle is raging over a new bill to force oil companies to pay less than two cents a barrel more to keep the safety programs from running aground.

"We are already doing less today than we were before the Gulf oil spill last year to inspect, monitor and prevent oil spills in California," said Assemblyman Jared Huffman, D-San Rafael. "Do you feel lucky? Do you want to cross your fingers and hope that something doesn't go wrong? Or should we maintain a vigilant system of monitoring and inspection?"

In 1990, the year after the Exxon Valdez oil spill, California lawmakers passed sweeping new rules on oil tanker safety.

The strict rules -- which required more emergency drills, insurance coverage and cleanup gear -- have largely worked, with the amount of oil spilled in California waters falling about 95 percent since then.

Increasing the fee

Huffman introduced a bill this spring to increase the fee that oil companies pay to fund California's oil safety programs from the current 5 cents per barrel they import to 6.75 cents a barrel. The fee, which the state originally set at 4 cents per barrel in 1990, was increased once before, in 2002, to the current level.


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The money provides about $25 million a year to a division of the state Department of Fish and Game called the Office of Spill Prevention and Response, making up the bulk of its operating budget.

In the past 20 years, its staff members have conducted oil spill drills with tankers in San Francisco Bay, Los Angeles and other harbors; required oil companies to draft extensive emergency plans; set up a network of oiled wildlife care facilities; helped clean spills; and required tankers to have $1 billion each in insurance.

But now money is running short and layoffs among the 205 employees are a possibility, said Capt. Scott Schaefer, acting director of the agency. Without any changes, the fund that pays for most of the agency's operations will have only $1.7 million by next June 30 and will be $5.2 million overdrawn by June 30, 2013.

The reason? Inflation, and new costs imposed by state lawmakers.

"The expanded programs have put additional strain on the fund," Schaefer said. "If we have to make program cuts, we are reducing the level of safety we can provide."

After the cargo ship Cosco Busan hit the Bay Bridge in 2007, dumping 53,000 gallons of bunker fuel into San Francisco Bay, then-Gov. Arnold Schwarzenegger signed several new spill laws.

One required the state to provide containment booms and other gear to waterfront cities that request it. Another required the state to conduct scientific tests within 24 hours to determine whether fish in affected areas are safe to eat. And the state has stepped up oversight of marine oil terminals after the BP spill in the Gulf of Mexico last year.

But the oil industry, led by lobbyists for BP -- the company whose offshore rig exploded off the Louisiana coast, spilling more than 200 million gallons of crude oil into the gulf -- is trying to kill the bill.

"The fact that the fee has not gone up in a certain amount of time is not the question," said Tupper Hull, a spokesman for the Western States Petroleum Association. "The question is whether the oil industry and consumers are paying adequate funding to operate an exceptionally good program. In our view the answer is yes. There is sufficient money to prevent and respond to oil spills in California."

'Playing Scrooge'

Hull said the agency is spending its money on activities other than oil spill safety. He cited a 2008 report by the state auditor that found 23 warden positions in the agency had at times done other Fish and Game work, including fisheries management, but were paid almost entirely from the oil fund.

Trying to head off opposition on that issue, Huffman, who saw Schwarzenegger veto a similar bill he wrote last year, has asked the Joint Legislative Audit Committee to audit the program again.

Environmental groups are pushing hard for Huffman's bill, AB 1112, which passed the Assembly in June on a Democratic Party-line vote and faces a vote as soon as this week in the state Senate.

"The oil industry is playing Ebenezer Scrooge with oil spill cleanup costs," said Warner Chabot, CEO of the California League of Conservation Voters. "In the last 20 years, California has increased the oil spill cleanup fee by one penny per barrel. Adding an additional penny or so will not break the industry's billion-dollar profits, and it will prevent the state cleanup agency from having to gut its own programs."

A close vote

The final vote is expected to be close. A key swing vote is state Sen. Sam Blakeslee, R-San Luis Obispo. Blakeslee, a former Exxon employee, represents a district that stretches up the coast from Santa Barbara County to San Jose. With redistricting, he will be in a tight re-election race next year in a largely Democratic, pro-environment area. But Republicans have opposed raising state fees.

When the bill passed the Senate Environmental Quality committee in July, Blakeslee didn't vote. He did not respond to requests for an interview, but his office on Monday released a statement: "I am open to a compromise that increases the fee temporarily to cover legitimate costs, but I am concerned that the current version of the bill generates millions in extra revenue and could become yet another government slush fund. I am willing to work with the author on an amended version of the bill."

Contact Paul Rogers at 408-920-5045.