As California prepares for the upcoming closures of two oil refineries, coupled with challenges in the global petroleum market, Gov. Gavin Newsom is considering boosting oil production in the state. The push for more, but limited, oil production came from within Newsom’s own administration. Last week, Siva Gunda, the Vice Chairman of the California Energy Commission, submitted a set of recommendations around oil refining and production to the governor. Newsom requested the guidance in an executive order earlier this year, after Valero announced it planned to close its refinery in Benicia in April and as Phillips 66 plans to shut down its Southern California facility in October. “We recommend that the State take action to achieve targeted stabilization of crude oil production in California to supply in-state refineries while ensuring that production is consistent with critical health and environmental protections,” Gunda wrote in the letter to the governor. “Specifically, limited production that is needed to achieve targeted stabilization should be prioritized in existing established, and densely developed oilfields, and outside of Health Protection Zones (HPZs) surrounding homes, schools, and other sensitive receptors where new permitting is prohibited by law.” The governor has been at the forefront of California’s aggressive push to cut the state’s use of oil and gas. When KCRA 3 asked the governor if he was on board with the recommendations that involve producing more oil, he said as of Tuesday, he was reviewing them. “We’ve been meeting with refiners. We’ve been meeting with folks in the extraction industry, not just refiners. And we’ve been meeting with experts, all across this country. And I’ve been advised with people around the globe,” Newsom said. “I’m not naive about the imperative of a transition that’s rational and addresses nature of change. And a lot has changed in the global markets. A lot of change in supply chains.” “A lot continues to change as it relates to the price of oil all across the globe,” the governor continued in his lengthy response. “You’ve seen national reports that reinforce these global trends. We’re not immune from them… We’ve got some challenges. And so, this requires some new considerations.” Part of California’s supply challenge involves its reliance on foreign oil. The latest data from the California Energy Commission shows that 63.5% of the state’s oil supply comes from other countries. Most of those countries are in the Middle East and South America, including Iraq and Ecuador. Lawmakers from both sides of the aisle have acknowledged that the ongoing global issues, including the conflict between Israel and Iran, could further hamstring the state’s supply problems. According to the California Independent Petroleum Association, California’s domestic oil production has decreased by 170,000 barrels a day in the last six years. The group blamed the thousands of permits waiting for approval from the state. “Right now, we’re in a drastic situation. It’s actually a catastrophic cliff. And that is not hyperbole. That is not something that’s just to alarm people,” said Bakersfield Republican State Sen. Shannon Grove, pointing to the refinery closures and the state’s lack of oil production. Grove represents Kern County, which has well-established oil fields. Gunda recommended that the governor consider prioritizing production in that county, while ensuring it doesn’t happen near homes and schools, and follows state law that bans fracking and other prohibited extraction methods. “Kern County is the factory floor,” Grove said. “It is the safest way to produce oil. Put it in a pipeline to send it to the refineries, and that would signal to the refineries, following the CEC Vice Chair’s recommendations, that California is serious about limiting our production and relying on foreign countries that are creating havoc in the world and that are hostile to us.” When KCRA 3 asked Grove if she was surprised by Gunda’s recommendations, she said, “It’s not about oil. It’s not about in-state production. The CEC’s vice chair is trying to figure out how to keep gas prices low for all Californians. That’s his goal.” The governor rebuffed any suggestion his administration would roll back environmental policies. “That’s not rolling back anything. That’s actually marching forward in a way that is thoughtful and considered. That’s what a just transition is all about,” Newsom said. The governor said he planned to move quickly on some of Gunda’s recommendations, but did not specify which ones. See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel
As California prepares for the upcoming closures of two oil refineries, coupled with challenges in the global petroleum market, Gov. Gavin Newsom is considering boosting oil production in the state.
The push for more, but limited, oil production came from within Newsom’s own administration. Last week, Siva Gunda, the Vice Chairman of the California Energy Commission, submitted a set of recommendations around oil refining and production to the governor. Newsom requested the guidance in an executive order earlier this year, after Valero announced it planned to close its refinery in Benicia in April and as Phillips 66 plans to shut down its Southern California facility in October.
“We recommend that the State take action to achieve targeted stabilization of crude oil production in California to supply in-state refineries while ensuring that production is consistent with critical health and environmental protections,” Gunda wrote in the letter to the governor. “Specifically, limited production that is needed to achieve targeted stabilization should be prioritized in existing established, and densely developed oilfields, and outside of Health Protection Zones (HPZs) surrounding homes, schools, and other sensitive receptors where new permitting is prohibited by law.”
The governor has been at the forefront of California’s aggressive push to cut the state’s use of oil and gas. When KCRA 3 asked the governor if he was on board with the recommendations that involve producing more oil, he said as of Tuesday, he was reviewing them.
“We’ve been meeting with refiners. We’ve been meeting with folks in the extraction industry, not just refiners. And we’ve been meeting with experts, all across this country. And I’ve been advised with people around the globe,” Newsom said. “I’m not naive about the imperative of a transition that’s rational and addresses nature of change. And a lot has changed in the global markets. A lot of change in supply chains.”
“A lot continues to change as it relates to the price of oil all across the globe,” the governor continued in his lengthy response. “You’ve seen national reports that reinforce these global trends. We’re not immune from them… We’ve got some challenges. And so, this requires some new considerations.”
Part of California’s supply challenge involves its reliance on foreign oil. The latest data from the California Energy Commission shows that 63.5% of the state’s oil supply comes from other countries. Most of those countries are in the Middle East and South America, including Iraq and Ecuador.
Lawmakers from both sides of the aisle have acknowledged that the ongoing global issues, including the conflict between Israel and Iran, could further hamstring the state’s supply problems.
According to the California Independent Petroleum Association, California’s domestic oil production has decreased by 170,000 barrels a day in the last six years. The group blamed the thousands of permits waiting for approval from the state.
“Right now, we’re in a drastic situation. It’s actually a catastrophic cliff. And that is not hyperbole. That is not something that’s just to alarm people,” said Bakersfield Republican State Sen. Shannon Grove, pointing to the refinery closures and the state’s lack of oil production.
Grove represents Kern County, which has well-established oil fields. Gunda recommended that the governor consider prioritizing production in that county, while ensuring it doesn’t happen near homes and schools, and follows state law that bans fracking and other prohibited extraction methods.
“Kern County is the factory floor,” Grove said. “It is the safest way to produce oil. Put it in a pipeline to send it to the refineries, and that would signal to the refineries, following the CEC Vice Chair’s recommendations, that California is serious about limiting our production and relying on foreign countries that are creating havoc in the world and that are hostile to us.”
When KCRA 3 asked Grove if she was surprised by Gunda’s recommendations, she said, “It’s not about oil. It’s not about in-state production. The CEC’s vice chair is trying to figure out how to keep gas prices low for all Californians. That’s his goal.”
The governor rebuffed any suggestion his administration would roll back environmental policies.
“That’s not rolling back anything. That’s actually marching forward in a way that is thoughtful and considered. That’s what a just transition is all about,” Newsom said.
The governor said he planned to move quickly on some of Gunda’s recommendations, but did not specify which ones.
See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel