Sep 19, 2023

Governor Newsom may claim that he “doesn’t see oil in California’s future” but new statewide consumption data portend a very different reality.

Annual figures released by the California Energy Commission show the world’s fourth largest economy consumed nearly 528 million barrels of oil in 2022 – up roughly 1% over 2021 consumption levels.

The fact that the Golden State demanded a healthy 1.45 million barrels of oil per day last year certainly complicates Sacramento’s aggressive plans for a rapid energy transition. But the growing oil demands also call attention to Newsom’s ongoing crusade to end local production of an energy source his state still obviously needs in staggering quantities.

Newsom’s policies have led to a nearly 25% decline in oil production in the Golden State, causing a cumulative loss of more than 90 million barrels of production over the past four years.

Weakened in-state production makes California more dependent on foreign imports for basic energy needs – another fact that is born out in the Energy Commission’s data. Indeed, California relied on foreign imports to cover 59% of its oil demands in 2022, a record high. Meanwhile, just 25.8% of California’s oil needs were met by in-state production, a record low.

The revelation that California’s oil consumption is going up, not down, exposes Newsom’s most basic energy policy failures. After all, policies that limit local production of oil and gas do nothing to lower demand for those products. Rather, they force the state to rely on an expensive foreign oil supply chain, leading to increased price volatility and higher costs for working families.

As Stanford University economist Charles D. Kolstad warned in November 2019: “If California consumers continue to demand the same amount of gasoline, it will just come from elsewhere.”

Unfortunately, Kolstad’s warning has become California’s reality. And as Newsom ignores analyst forecasts showing oil demands will remain strong for decades to come, California’s foreign oil dependency problem will only get worse.