The Trump administration has issued a draft review proposing significant changes to California’s coastal protection authority. This action stems from a 92-page federal review, which alleges a pattern of extensive jurisdictional and regulatory authority by California coastal agencies. The document asserts that these authorities have demonstrated an unwarranted opposition and political inclination against offshore drilling, broader oil and gas projects, and SpaceX’s launch activities. The preliminary findings, released by the National Oceanic and Atmospheric Administration’s Office for Coastal Management, indicate that future federal funding for California’s coastal management program would be suspended, contingent upon the identified issues being acceptably resolved. Meg Caldwell, who directed Stanford’s Environmental and Natural Resources Law and Policy Program for over two decades, described the audit as "a dangerous ultimatum."
The draft review outlines over a dozen "corrective actions" California must undertake. Key among these demands is that the California Coastal Commission meet with SpaceX to discuss outstanding issues related to political leanings and future progress. Coastal authorities are also directed to engage with Sable Offshore Corp., a Texas-based oil company, concerning claims of excessive regulatory requirements and authority. Furthermore, the state’s leading coastal agency is mandated to issue an official statement by January. This statement must commit that California will not uniformly oppose proposals from specific entities or industries, such as oil and gas, or activities like offshore drilling. These actions are presented as prerequisites for California to retain its federal coastal management program funding.
This proposed federal action represents an unprecedented application of the Coastal Zone Management Act (CZMA), a longstanding federal law established five decades ago. The CZMA created a bipartisan co-management framework, granting coastal and Great Lakes states the power to review and object to federal projects affecting their shorelines, and to establish their own guiding principles for coastal oversight. Legal experts reviewing the draft document have expressed concern about what they perceive as a politicized use of this federal law. Historically, the federal government has not attempted to strip a coastal state of its rights in this manner. The consequences of these draft findings becoming final could be far-reaching, particularly for Orange County, as the plan has the potential to introduce the first new oil and gas leases in federal waters of the Pacific Ocean in over four decades. This shift could significantly alter local development and environmental considerations.
The California Coastal Commission, the California State Coastal Conservancy, and the San Francisco Bay Conservation and Development Commission, which collectively implement the CZMA in the state, have until November 16 to respond to these preliminary findings. The Coastal Commission is currently reviewing the draft and has requested a 15-day extension beyond the November 16 deadline, as permitted under CZMA regulations, to formulate a comprehensive response. Spokesperson Joshua Smith conveyed the commission's disappointment, highlighting its "long history of stellar reviews from the federal government and a 50-year track record of a successful federal partnership." Smith noted that 96% of the time, the commission either approves projects as submitted or negotiates improvements. Public engagement on this issue has been substantial, with over 23,000 written comments submitted during a 45-day public comment period. Hundreds of residents also rallied at an August hearing in Santa Monica. Approximately 95% of these public comments expressed support for California’s existing coastal protection efforts.
The situation escalated earlier this year when U.S. Commerce Secretary Howard Lutnick ordered a new evaluation of California’s CZMA compliance, adopting a "new approach." This revised assessment is designed to consider offshore oil production, pipeline maintenance, spaceport infrastructure, desalination projects, and undersea cables, citing national priorities and economic interests. This follows a draft review completed in 2024 during the Biden administration, which had reportedly given the state top marks. Should the federal government’s final determinations align with these draft findings, the subsequent legal landscape will be uncharted. U.S. Sen. Adam Schiff (D-Calif.) has criticized the administration’s use of the CZMA, calling it politically motivated. The implications for Orange County’s development and real estate sectors could be considerable, as the change in coastal policy would open up previously restricted areas to industrial activities.