California News Pulse February 2023

Posted: March 15, 2023

California | February 2023

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- 2 (-2)
Total Rigs in the United States- 749 (-11)
Total U.S. Rigs 15% YTD

State Permitting Data
Permits Approved – 11

State Highlights

New California Oil Well Ban Put on Hold for Voters to Decide

In order to get a referendum on the Nov. 5, 2024, general election ballot, opponents of California’s new rule prohibiting new oil and gas wells close to houses, schools, and other community areas have amassed more than 623,000 valid voter signatures. The rule prohibits new wells within 3,200 feet (975 meters) of places including schools, houses, daycare and medical facilities, parks, prisons, and publicly accessible businesses. It was signed into law by Governor Gavin Newsom last September. On behalf of Jerome Reedy, a director of the California Independent Petroleum Association, Nielsen Merksamer, a legal company that specialized in ballot issues, filed a referendum to repeal AB 1137.

Nevada governor declares state of emergency after a fuel pipeline leak

Once a fuel pipeline leak was discovered Friday night, a state of emergency was declared by Governor Joseph Lombardo. At a pumping station in Long Beach, California’s Watson area, it was discovered that an above-ground pipeline had leaked 205 gallons of gasoline. In order to analyze the discharge, the Kinder Morgan energy corporation shut down its 566-mile CalNev pipeline. Late on Friday, a fuel emergency was also proclaimed in Clark County. According to the corporate communications manager for Kinder Morgan, only the pipeline that transports unleaded and diesel gasoline to the valley has been impacted; jet fuel supplies to Harry Reid International Airport have not been impacted.

California bill penalizing oil profits makes little progress

Gov. Gavin Newsom of California has suggested a tax on excessive oil industry profits, but the legislation is still pending in the Democratic-controlled Legislature without any information on the tax’s amount or deadline. The law poses a significant danger for Newsom, who was recently reelected in November and is anticipated to run for president in 2024. The oil business continues to be a strong political force, especially among Democrats who represent regions of the state where the sector generates jobs. In the most recent two-year session, the company spent approximately $34 million lobbying the Legislature.

Pipeline Debate at Center of California Carbon Capture Plans

California’s ambitious plan to combat climate change depends on removing carbon from the air and burying it deep underground, but environmentalists’ hostility to the practice and worries about how to transport the gas safely might impede development. California’s carbon capture legislation tries to provide a stronger safety framework than the federal government, but the state is at a disadvantage without clarification on pipeline plans. Although carbon capture has not been demonstrated to be a significant climate solution, proponents contend that it is necessary for oil and gas businesses to develop new revenue streams and job-preserving strategies as California shifts away from fossil fuels.

Rig Count

California Oil Production

California Gas Production

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