Only in California: Falling Oil Production, Gas Plant Closures Are Reasons to Party

We recently documented California’s sharp fall in oil production, noting that even though only two states have more proved reserves of crude, five are producing more oil. This is not due to an accident or bad luck. Or even poor management. It is by design. The state’s dominant political party is obsessed with eliminating fossil fuels as a means to achieve decarbonization.

The governor’s office admits that under Jerry Brown, oil production in the state has fallen 56 percent. Many count this as a victory. Don’t refine. Don’t produce. Just leave that black gold in the ground.

“It’s really critical to stop drilling in California,” Sonoma County Supervisor Lynda Hopkins recently said.

In Texas, North Dakota, Alaska, and a few other states, a crash in oil production by more than half would be cause for alarm. It should cause for concern in California, too. Instead, it’s a reason to celebrate, as is the closing of natural gas plants, which provide nearly half of the state’s electricity.

Achieving carbon-free living is an expensive project. Renewables’ costs aren’t as steep as they once were. But fossil fuels such as crude oil and natural gas are still the cheapest energy sources available. A full transition to renewables will be pricey. For many it will be unaffordable.

So, what will be the financial tally of this grand experiment?

According to the San Francisco Chronicle, “no one can say how much” it will cost. That’s “because no one quite knows how we’ll achieve it.” Not even the California Air Resources Board knows. Neither have “the state’s two largest electric utilities” estimated the economic impact of Senate Bill 100, which mandates that all the state’s electricity must be generated by renewable sources by 2045.

Yet our policymakers have forced it on us.

James Mulligan of the World Resources Institute told the Chronicle, “somebody’s going to have to pay the bill.”

“Whether it’s the taxpayer, the (utility) ratepayer, or the shareholder or what have you — it’s got to come out of somebody’s pocket.”

Those hurt the most are those who have the shallowest pockets. As PRI Senior Fellow Wayne Winegarden has said, “you are actually going to be harming the least-wealthiest people in the state.”

While we won’t know what SB 100 will eventually cost until it’s fully implemented, we’d be foolish to think that it won’t be expensive. Smart people have already told us that a far less ambitious plan to cut fossil fuel emissions could cost California’s economy $23 billion a year. How much more pain will be caused by the mandates of SB 100?

California has simply become unlivable for many because it costs so much to live here. This doesn’t seem to register with policymakers, though, because they keep piling on the costs. If they aren’t stopped, they’re going to sink the state into the ocean before the Big One does.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.


Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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