California’s backdoor oil drilling ban buries rights, resources, and a family legacy

Property is easy to recognize when you can see it: a house, a plot of land, a fence line marking what’s yours.

But not all property is in plain view. For siblings John and Melinda Morgan, it’s buried deep beneath someone else’s land. It’s out of sight, but it’s still property and still carries rights. Or at least it should.

Under a new California law, those rights might as well not exist at all.

The Morgans inherited two mineral estates in oil-rich Santa Barbara County, acquired by their grandmother through her marriage to California oil pioneer George Allan Hancock and preserved in a family trust.

“The trust passed down from her to my dad, and then from my dad to us kids. That’s how we were introduced to all of this,” John explains.

Because John and Melinda own the minerals, not the surface land, they rely on oil operators to bring those resources to life. California law has long allowed this arrangement, treating mineral rights as a separate form of property that can be leased in exchange for a share of the royalty income.

In fact, this approach isn’t unique to California. Private ownership of subsurface minerals is a distinctly American system that has helped turn natural resources into opportunity and fueled prosperity for generations.

For the Morgans, it also meant something simple–modest, steady royalty payments to support their retirement and, one day, provide financial security for their children and grandchildren.

But getting there was anything but simple. Like many mineral owners, they spent years navigating the state’s shifting regulations and mounting restrictions just to resurrect resource production. When they finally found operators who could make it work, it felt like a turning point.

Then California changed the rules.

In 2024, SB 1137 took effect, creating so-called “health protection zones” where new oil wells–and even the restart of old ones needing certain repairs or improvements–are banned within 3,200 feet of homes, schools, and businesses–almost everywhere people live, work, and gather.

On paper, it reads like a setback requirement. In practice, it outlaws oil and gas production across vast swaths of the state–including the Morgans’ mineral property.

Nothing about their ownership changed. The minerals are still there. Their names are still on the title.

But the one right that gives their property value, the ability to extract minerals, is gone.

“The state totally put the kibosh on any drilling and took away all of our rights to enjoy whatever income we could have made,” John says. “It really wiped us out.”

“Our hands are tied,” adds Melinda.

Sold as yet another California Big Oil crackdown masked in environmentalism, the law’s long arm stretches to everyday folks like the Morgans, who don’t drill wells, don’t run oil companies, and are nothing like the industry giants the state claims to target.

“We’re definitely not the landman people that you see on television,” says Melinda.

Worse, the rules only go one way. People who don’t own the minerals can build right above them – even right next to oil wells, instantly creating new no-drill zones and cutting off access to what lies below.

In other words, property owners must pay the price for the government’s war on abundance.

The consequences are not abstract. Mineral estates exist for one purpose: extraction. When that becomes illegal, the property doesn’t just lose value–it loses purpose.

What was once the Morgans’ long-term security now sits idle and effectively worthless.

“It’s a hard pill to swallow,” John says. “If you were the state and you were going to take my house from me, you’d have to pay me something for it. They don’t want to give us anything for our property. To me, that’s just not fair. It’s stealing.”

The constitution was written to protect against exactly this kind of abuse. When the government takes private property–whether visible or not, whether taken outright or regulated into uselessness–it must pay for what it takes.

California knows this. It even built an exception right into SB 1137 itself that allows drilling only if a court finds a permit denial would amount to an unconstitutional taking. That is, the state recognizes the property rights problem–and dares owners to prove it.

“This is nothing but elimination by regulation,” explains PLF attorney Jeffrey Jennings. “California is choosing scarcity over production and calling it environmental policy. But protecting the environment doesn’t require stripping people of their property rights or denying access to resources that fuel prosperity for all Americans.”

Represented at no charge by Pacific Legal Foundation, the Morgans are challenging SB 1137 in federal court. They’re standing up for their own rights and for the principle that environmental policy should respect individual liberty and expand opportunity, not extinguish both.

“Somebody has to step up to the plate. It’s terrible that the government’s done this to us. Not only have they taken away our family legacy, but they’ve taken away income we could have given to our kids and our grandkids,” says John. “I’m glad we’re doing this because I’m sure other owners need somebody fighting for their rights as well.”

The Morgans are also determined to preserve what was entrusted to them and ensure it doesn’t disappear on their watch–something their grandmother and her oilman husband would have never imagined.

“He’s probably turning over in his grave,” figures Melinda.

“He wouldn’t be happy,” adds John. “But I’m sure he’d be sitting there saying, ‘You go!’”