It might be smart for oil and gas industry executives to start planning to pack up for a complete pullout from California. Or to at least notify government officials that their exit is being seriously contemplated. It’s not easy to operate a business that has been declared unofficially, but effectively, an enemy of the state.
The vilification began before Gavin Newsom became governor, but it’s been noted that under his “leadership,” the state has become determined to leave its bounty of crude in the ground.
“California would be the biggest oil producer in the world and the first U.S. state to plan a managed decline for the sector,” Climate News Now reported in 2021. At that time, it was producing 394 million barrels a day, “making it the seventh biggest U.S. state oil producer,” and the 27th biggest oil producer in the world if it were its own country.
To this end, lawmakers in Sacramento have introduced legislation, the Polluters Pay Climate Superfund Act, Senate Bill 684. It would set up a climate superfund program that would “require fossil fuel polluters to pay their fair share of the damage caused by greenhouse gases released into the atmosphere” between the 1990 and 2024 calendar years.
“Fair share” is an impossible benchmark to establish, as it is utterly subjective, and there’s no evidence, only speculation, that greenhouse gas emissions had damaged anything. These disputes need to be discussed in the open, but they have instead been weaponized for a state that is bent on wiping out an industry that was not only crucial to its booming growth, but also plays a consequential role in its present and is a necessary cornerstone of its future.
Maybe SB 684 is a multipurpose measure. One, it allows lawmakers to bleed the oil industry of its financial resources. California legislators have long regarded businesses as never-ending fonts of dollars to pay for their unbridled spending.
Two, it’s an unwelcome mat for the oil industry, another piece of the “managed decline.”
The bill is reportedly in trouble – having passed its first committee hearing, the measure became a “two year bill” and will be further considered in 2026. But it won’t derail California’s escalating war on oil.
Refiners are being regulated out of the state (leaving their infrastructure open to government seizure), even though at more than 1.7 million barrels per calendar day, only two states had more refining capacity in 2022; the governor has railed against oil industry profits, threatening “If they won’t lower their prices we will do it for them” (as if consumers would be better off if profits were lower or even nonexistent); and drilling restrictions continue to limit extraction. At the local level, cities have outlawed new gas stations.
California’s history cannot be separated from oil and gas. Long before Hollywood and Silicon Valley were economic forces, there was oil. The first commercially successful oil well goes back to the 19th century, and from 1903 to 1936, California was the country’s top oil producer. Over this time, “many California companies dominated the market,” says the Capitol Museum.
Despite efforts to dismantle it, the oil and gas sector supports more than a half million California jobs (with a labor force of nearly 20 million, this means that one in every 40 workers depends on the oil industry for their livelihood), contributed $338 billion to the state’s economy in 2022 and generates roughly $48 billion a year in state and local taxes, says the Los Angeles County Economic Development Corporation.
The companies that literally fuel the country’s and the state’s economies are no longer welcome, though.
To intentionally erase an industry out of political preference, particularly one as important as the oil and gas sector, is not a mistake nor is it simply shortsighted – it’s a dereliction for which there is no justification.
Of course, like the Democratic candidate for mayor of New York, the industry’s end might give state officials the idea to run refineries themselves, which would be about as bad as the idea of government-run grocery stores.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute and the co-author of The California Left Coast Survivor’s Guide.
