California News Pulse February 2022

Posted: March 22, 2022

California | February 2022

Field Overview

California, with both onshore and offshore oil production, has been supplying the U.S. with petroleum products since the 19th century. Operations are primarily focused around Kern County, the LA Basin, and the San Joaquin Valley, with the Midway-Sunset oil field in Kern County being the state’s largest.

State Drilling Statistics
Total Rigs in California- 14 (+2)
Total Rigs in United States- 650 (+40)
Total U.S. Rigs 62% YTD

State Permitting Data
Permits Approved – 3

State Highlights

How California Resources is Aligning with the State’s Ambitious Climate Goals

Whether they want to or not, fossil fuel producing companies in California all undertake strict climate goals. California Resources Corp. (CRC) is one company that is going above and beyond to meet and exceed state requirements. The company has goals to reach net zero by 2045 and claims to currently have the lowest carbon intensity production not only in the state but in the country. In a world where the oil and gas industry is demonized for its disregard for the environment, CRC is doing its part to turn the narrative around. 

Huntington Beach Oil Spill Inspires Legislation to Ban California Offshore Drilling

Big changes could come to California’s offshore oil drilling following the major spill last October. A new bill, if passed, would end all offshore drilling in California waters by 2024 in hopes of ending ocean spills and the subsequent environmental damage. The bill would leave room for the current 11 leaseholders to sell their contracts back to the State Lands Commission prior to the ban. This would potentially cost the commission tens to hundreds of millions of dollars. State Sen. Dave Min has this to say about offshore rigs “…it’s a ticking time bomb.” Those leases currently provide the state $90 million in revenue, a drop in the bucket compared to total revenue. 

Just Transition Bill for California Oil Industry Workers Exposes Labor Rift

The more regulations California imposes on the oil and gas industry the smaller and smaller it gets. This leaves and will leave thousands of industry workers without jobs. Hence, a recent bill is being discussed that will provide funds to support and retrain thousands of oil industry workers. There are currently 112,000 oil and gas workers who would need to find a new job, the problem then is where will they go? And how much will these new jobs pay? Many say that transitioning the workers now will result in them leaving their high paying jobs for low paying ones. One proposed solution is for the state to invest in large infrastructure projects such as a light rail system or offshore wind energy. 

Group Alleges US Firm’s Tanker Illicitly Traded Iran Oil

A tanker owned by Fleetscape, a subsidiary of LA-based Oaktree Capital Management, is believed to have been part of an oil trade with Iran despite sanctions. The U.S. has ongoing sanctions on Iranian oil ever since a nuclear deal with Iran, the U.S. and other world powers fell through. A U.S. based advocacy group has tracked the American tanker to the South China Sea where a satellite photo shows the vessel in what seems to be a ship-to-ship oil transfer with an Iranian tanker. Oaktree has stated they are cooperating with U.S. authorities on the matter and have yet to claim responsibility for non-compliance with the sanctions.  

Rig Count

California Oil Production

California Gas Production

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