The T-Ridge Project would have been the first new oil lease off the coast of California in 40 years. The governor now says the money the state would have made from the expansion is not worth the risk.
"I see on TVthe birds drenched in oil. The fisherman out of work. The massive oil slick destroying our precious ecosystem," said Schwarzenegger. "That will not happen here in California. This is why I am withdrawing my support for the T-Ridge Project."
It's a stunning reversal.
For two years, the normally earth-friendly governor has been pushing the T-Ridge Project to help solve the budget deficit: more than $100 million this year, nearly $2 billion over 14 years.
The move surprised environmentalists.
"I think the disaster in the Gulf has been a wakeup call about the dangers of offshore oil drilling and we need to quickly make a transition to clean energy sources," said Bill Magavern, director of Sierra Club California.
But Republicans are shaking their heads. They say the platforms in California are very different from the ones in the Gulf, less prone to such environmental disasters.
"The governor is flat wrong," said state Assm. Chuck DeVore (R-Irvine). "He is reacting emotionally to this terrible incident and he's not thinking things through objectively."
Without the governor's backing, drilling off the coast of California is essentially dead for now, but it leaves an even bigger hole in the budget.
"If I have a choice between the $100 million and what I see in the Gulf of Mexico, I'd rather figure out how to make up for that $100 million," said Schwarzenegger.
Twenty-seven platforms currently operate off the coast of California. They produced more than 13 million barrels of oil last year.
No new oil leases have been approved in California since the 1969 oil spill off the coast of Santa Barbara.