California News Pulse June 2023

Posted: July 18, 2023

California | June 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 (-)
Total Rigs in the United States- 682 (-32)
Total U.S. Rigs 10.4% YTD

State Permitting Data
Permits Approved (10/1/2022 to 4/30/2023) – 3

State Highlights

Nation’s First Price Gouging Law in Effect

June 26th was the first day that California’s new “anti-price-gouging” laws went into effect. A recent poll indicated that 89% of Americans support efforts to crack down on gas price gouging. The new law establishes the Division of Petroleum Market Oversight to monitor the industry. It will require daily reports on the market and imports from the oil and gas companies that supply California, and it will increase the accountability of energy companies by requiring monthly reports on refiner’s profit margins. The article credits Governor Newsom’s recent actions to the $1.50 reduction in year-over-year average California gas price.

Center for Biological Diversity: California Must End Neighborhood Oil Drilling, New Fossil Fuel Permits

A recent letter from the Center for Biological Diversity is calling for an immediate moratorium on new drilling permits within 3,200’ of “sensitive sites” like homes and schools. There is pending legislation already considering this sort of regulation, but the lobbyist group is calling for executive action from Governor Newsom to immediately enact this regulation. The article points to an “oil industry-backed” referendum that is stalling the implementation of the regulations they are pushing for. The article quotes Dr. Aradhna Tripati as saying “neighborhood oil drilling [is] poisoning communities of color first and worst”.

Editorial: Cleaning Up California’s Oilfields May Cost $21.5 Billion. Taxpayers Shouldn’t Get the Bill

An editorial from the Los Angeles Times quotes a report that estimates $3.65 billion will be extracted from California’s remaining oilfields in the next two years and that this is 58% of the remaining proceeds yet to be generated from California’s oil patch. The article admits that more P&A permits are now being issued than new-drill permits, which means that the oil patch is gradually being cleaned up in California, but warns that there will be a huge P&A liability left on the State’s hands. Another report indicated that $400 million was spent last year by the oil industry to plug 6,500 idle wells, meaning the average P&A cost was about $62,000/well.

Rig Count

California Oil Production

California Gas Production

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