LA County’s Revised Oil Well Ordinance: What Real Estate Investors and Developers Need to Know

By Sean M. Sherlock

Los Angeles County is preparing to adopt a Revised Oil Well Ordinance to permanently phase out oil production across all unincorporated areas of the County and set a new course for development and future use of oilfield properties.  For real estate investors and developers, this ordinance creates both significant risks and opportunities. Properties currently hosting active or idle oil wells—or situated near them—will undergo a fundamental shift in their regulatory status, land use designations, and long-term development potential. Anyone acquiring, financing, or planning to develop a property in unincorporated LA County that has current or historical oil well operations should understand this ordinance and its implications before doing so.

Key takeaways are:

This alert summarizes the ordinance’s core provisions, explains how it will reshape land use and zoning for affected properties, identifies key due diligence and liability considerations, and highlights remaining legal uncertainties that investors and developers should monitor.

Background: From the Original Ordinance to the Revised Framework

The County adopted its original Oil Well Ordinance in January 2023. The ordinance prohibited new oil wells and designated existing operations as nonconforming uses. That ordinance was challenged in multiple lawsuits by oilfield operators asserting preemption, takings, due process, and other claims.

Effective January 1, 2025, California Assembly Bill 3233 explicitly authorizes local governments to limit or prohibit oil and gas operations within their jurisdictions. Because AB 3233 is not retroactive, the County repealed its original Oil Well Ordinance in May 2025 and is now advancing a Revised Oil Well Ordinance under the authority of AB 3233. The ordinance is expected to come before the Board of Supervisors for adoption this year.

Core Provisions of the Revised Oil Well Ordinance

The Revised Oil Well Ordinance will amend the County’s Planning and Zoning Code (Title 22), Environmental Protection Code (Title 12), the Baldwin Hills Community Standards District, and the County General Plan. Its key regulatory mechanisms are as follows:

Prohibition on New Oil Wells. No new oil wells or production facilities may be established in any zone in unincorporated Los Angeles County. This prohibition applies across all zoning designations.

Nonconforming Use Designation. Existing, legally established oil wells or production facilities operating without an approved Conditional Use Permit or other discretionary permit will be classified as nonconforming due to use. Nonconforming uses cannot be expanded, extended, or intensified.

20-Year Amortization Period. All nonconforming oil operations must cease within a 20-year amortization period. In the Baldwin Hills area, an accelerated timeline applies: wells located within an oil field adjacent to a state recreation area or state park and within the Baldwin Hills Conservancy boundary must be plugged and abandoned by December 31, 2030.

Noise Regulation. The ordinance eliminates the longstanding exemption for oil and gas wells from the County’s Noise Control regulations, meaning that oil operations will now be subject to the same noise standards as other land uses.

General Plan Amendments and Future Development Potential

The accompanying set of General Plan amendments will alter the land use policy framework governing affected parcels across three elements of the County’s General Plan.

The Land Use Element currently includes a “Mineral Resources” (MR) designation whose stated purpose encompasses “activities related to the drilling for and production of oil and gas.” Under the proposed amendments, this element will be revised to prohibit new oil well operations and remove policy language that supports oil production activities. The MR designation will contain transitional language providing that when extraction or production uses are terminated, “alternative uses that are compatible with the surrounding development, in keeping with community character, are permitted.” This provision signals a pathway for redevelopment of former oil sites to other productive uses.

The Conservation and Natural Resources Element is being updated to reflect the County’s authority under AB 3233 to restrict oil and gas operations, while preserving policies that require appropriate remediation for publicly owned oil and gas production sites “based on possible future uses.” The Safety Element is similarly revised to prohibit new oil well operations.

The County’s own Initial Study acknowledges that the ordinance and General Plan amendments will permanently remove some oil fields’ designations as resource recovery sites, “solidifying the irreversible loss of locally available mineral resources … [which] cannot be restored or utilized for future benefit.” For investors evaluating properties with mineral rights, this represents a permanent change in the regulatory landscape.

Prohibition on New Oil Wells. No new oil wells or production facilities may be established in any zone in unincorporated Los Angeles County. This prohibition applies across all zoning designations.

Site Restoration: The Path from Oil Production to Redevelopment-Ready Land

The ordinance establishes a structured restoration process. Within 90 days of the abandonment of any well, the well site must be “restored as nearly as practicable to its original condition.” When the last oil well on a lot is plugged and abandoned, full lot restoration must begin within three months and be completed within one year, unless the California Geologic Energy Management Division (“CalGEM”) approves a longer timeline. All CalGEM requirements for plugging, abandonment, equipment removal, and lease restoration must be fulfilled.

However, the ordinance itself does not prescribe specific future land uses for former oil well sites or compel redevelopment. The actual redevelopment of any particular site will require separate land use entitlements and environmental review on a case-by-case basis.

Practical Implications for Investors and Developers

Due Diligence. Any acquisition of property in unincorporated LA County should include a thorough review of whether the parcel hosts, or has historically hosted, oil wells—whether active, idle, or abandoned. The County maintains an Oil and Gas Well Dashboard with GIS data on wells. Phase I and Phase II environmental site assessments should address the specific contamination risks associated with oil production.

Remediation Liability. The ordinance’s bonding requirements set a floor of $152,000 per well. Bonds cover plugging, abandonment, contamination remediation, and site restoration. Prospective purchasers should evaluate whether existing bonds are sufficient to cover actual remediation costs—particularly for large, heavily contaminated sites—and who bears residual liability if the operator becomes insolvent or abandons the site without completing restoration.

Litigation Risk. The original 2023 ordinance was challenged in multiple lawsuits. Irrespective of whether AB 3233 strengthens the County’s legal position on state preemption challenges, operators have raised, and likely will continue to raise, claims including regulatory takings, vested rights, due process, and CEQA adequacy. Investors should factor the potential for litigation-driven delays, modifications, and uncertainty into their underwriting.

Community Visioning and Its Influence on Future Uses

The County is actively engaging communities through workshops and surveys to identify desired future uses for former oil well sites. The Los Angeles Regional Water Quality Control Board has also participated in collaborative workshops with LA County Planning to discuss future land uses for communities near existing oil wells. The County’s Just Transition Strategy calls for integrating “co-visioning and input” from sovereign Native American nations and frontline communities into land use redevelopment planning. The Board of Supervisors has directed multiple departments to report back with policy recommendations for the remediation and reuse of former oil sites.

While these processes are advisory rather than binding, they will likely influence the types of land uses the County favors when reviewing future entitlement applications on former oil well sites. Developers should monitor these workshops and consider engaging early with the process to understand community expectations and potential regulatory preferences.