California | March 2023
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- 748 (-1)
Total U.S. Rigs 7.8% YTD
State Permitting Data
Permits Approved – 8
The big news in California this month is that the country’s strictest state-level regulations for Big Oil have been put in place due to legislation that Governor Newsom has signed. A new bill allows the California Energy Commission (CEC) to establish a fine to hold the oil sector responsible and establishes a dedicated, independent watchdog to investigate price gouging by oil firms on a daily basis. 91 days following the signing of the bill, the law will become effective. The Governor has been challenging the energy sector on several occasions for prioritizing money over people and has now put the pen to paper.
Voters in California will decide in 2024 whether the state should expand its reliance on imported oil or keep producing oil while adhering to the strictest labor, environmental, and health regulations in the world. Some argue that oil produced in California is the only petroleum in the world that complies with the state’s climate restrictions, but imported oil is not subject to these rules. If 15,500 current California wells are closed and the supply is switched to imported oil, gas prices will rise. Over the past ten years, California’s need for petroleum has continuously climbed. In 2024 Californians will decide whether to make the change to imported oil or to continue production.
For well under US$400 million, the Canada Pension Plan Investment Board (CPPIB) recently acquired a 49% share in Aera Energy LLC, the second-largest oil and gas producer in California. Despite talk about California’s oilfields being easily accessible and inexpensive, some say they are also mature and will eventually begin to dry up. By continuing to fulfill California’s conventional energy needs while expanding carbon capture and storage along with a portfolio of renewable energy sources, the partners want to make Aera carbon neutral in ten years. CPPIB, a heavy investor in climate-sustainable projects, has stated that although the Aera deal has been opposed by some as counterproductive to their sustainability mantra, it still meets their climate goals.
A group of shipping companies have reached a settlement agreement of $97 million with the state of California in relation to the 2015 oil spill incident. The spill occurred when a pipeline used to transfer crude oil from ships to trucks ruptured, resulting in thousands of gallons of oil spilling into the Pacific Ocean. The settlement will be used to fund restoration and improvement projects in the affected areas of California’s coastline, and the agreement also includes measures to improve safety protocols and spill response procedures for the shipping industry.
California Oil Production
California Gas Production
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