Governor Newsom’s crusade to shut down oil production in California has reached a new level.
“California has put a near halt on issuing permits for new drilling this year, according to state data.
[The state has] approved seven new active well permits in 2023. That compares with the more than 200 it had issued by this time last year.
… New drilling permits have steadily declined since Gavin Newsom became governor in 2019, but the current rate of approval represents a sudden and dramatic drop.”
Government data show that Newsom’s anti-oil agenda had already resulted in a 25% decline in oil production over his first term in office. If the freeze on permit approvals holds – the state has created a backlog of more than 1,400 permits awaiting approval – then California will lose even more local production in short order.
All the while, state forecasts keep pointing out the obvious: California will still need traditional fuels – and lots of them – for decades to come.
- Even when using an optimistic case for electric vehicle adoption, California Energy Commission forecasts estimate that the state will still need 11.5 billion gallons of gasoline and diesel in 2035. That’s more than 80% of the amount of gasoline and diesel the state consumed in 2020.
- The Energy Commission found in an earlier analysis that the state would still require 16.2 billion gallons of gasoline in 2030 – or more than 85% of what was consumed in 2020.
- As we’ve noted before, the California Air Resources Board’s 2022 Scoping Plan estimates that the state will still need 97 million barrels of in-state oil production to meet demand in 2045 – but Newsom’s current energy policies have the state on course to fall below that threshold by 2026.
- Regarding natural gas demands, the Energy Commission’s 2021 report “Achieving 100% Clean Electricity in California” found that “much of California’s existing natural gas capacity is retained through 2045” in its analysis. A separate analysis by McKinsey concurs, projecting stable natural gas demand for the west coast region into 2040.
In the face of these forecasts, Newsom’s anti-oil agenda puts California on a dangerous path: more frequent supply disruptions and price spikes as the state is forced to compete for more foreign oil imports in volatile energy markets.
The frantic rush to cut production will hurt workers, local economies, and the state’s energy security. It will not change the hard reality that California will still need lots of oil and gas in 2035, 2045, and beyond.