"If the state legislature had adopted a more rational, market-driven transition away from oil, the probability of a supply crisis might be reduced. As it stands, however, it’s probably too late."
"Achieving California’s goal of net zero by 2045 requires rapidly transitioning away from combustible fuel. It’s a risky strategy. If the transition happens too fast, Californians confront energy shortages and high prices.
"When it comes to electricity, Newsom has so far managed to avoid an acute crisis by sensibly prolonging that transition. In 2023, he delayed the planned closures of three natural gas-powered generating plants that together contribute 2.2 gigawatts to California’s electricity grid. In 2022, Newsom delayed the planned 2025 closure of California’s last major nuclear-powered generating plant, Diablo Canyon, preserving another 2.2 gigawatts of baseload power.
"Newsom may not be so lucky with gasoline and diesel fuel.
"To put this into perspective, California still depends on petroleum for 47 percent of its total energy. And despite impressive gains in electric vehicle adoption, 94 percent of all energy consumed in California's transportation sector still depends on petroleum. This fact means that for the foreseeable future, the movement of people and goods in California is overwhelmingly dependent on petroleum.
"To accelerate the transition from petroleum fueled to electrified transportation, the state legislature has disincentivized the production, distribution, and refining of oil in California. Cities and counties have followed suit. That strategy is exemplified in the numbers: In 1986, California’s in-state production of crude oil reached its peak at 402 million barrels against demand of 676 million barrels. In 2024, production had fallen by 70 percent to 119 million barrels, with demand also falling, but only by 24 percent to 511 million barrels. California now imports nearly 400 million barrels a year.
"The problem with replacing in-state oil production with imports – notwithstanding the loss of jobs or the outsourcing of environmental impact – is that California’s oil industry now sits at the precipice of complete collapse, and if that happens, more imports will not prevent lines at the pumps.
"The problems begin with drilling permits, which have to be issued every year in order to maintain production. But CalGEM (California’s Geologic Energy Management Division) has reduced drill permits from over 2,000 per year through 2020, to only 500 in 2021 and 2022, and to barely 100 in 2023 and 2024 . . ."
Californians for Energy and Water Abundance, a project of California Policy Center, was launched to build a coalition committed to abundance-oriented policies in California. The coalition aims to promote these solutions to the public and policymakers, and develop sample legislation to unlock California's energy and water potential to benefit all Californians. Edward Ring is the Director of Water and Energy Policy at the California Policy Center, which he co-founded in 2013.
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