California | May 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- 7 (No change)
Total Rigs in United States- 753 (+25)
Total U.S. Rigs 60% YTD

State Permitting Data
Permits Approved – 3

State Highlights

California to Eliminate 91% of Oil and Gas use by 2045

The California Air Resources Board released a draft of their “carbon neutrality” road map that calls for all-electric furnaces in future homes, electric shipping infrastructure, and aggressive sequestration. This will ideally allow California to reach its goals by 2045. Still, there will be a period for public comment before the regulatory body makes any final decisions. At present, environmental activists are displeased with the use of carbon capture and the expansion of natural gas power. They would rather see all hydrocarbons phased out. The Western States Petroleum Association said the plan would lead to more bans, mandates, and expensive regulations. As Catherine Reheis-Boyd said in a statement, “Forcing people to pick certain jobs, certain cars, certain homes, and certain times to use energy is out of touch with how ordinary people live.”

California Offshore Lives to Fight Another Day

October’s spill on Huntington Beach has left a bad taste in California’s mouth, yet legislation to shut down 3 offshore rigs failed to win passage in the senate. Senate Bill 953 would have given the State Lands Commission the ability to terminate the offshore leases by 2024 if the operators were unable to negotiate a voluntary buyout between companies operating the platforms. The legislation ignored 23 other rigs in federal waters and focused solely on 3 leases near Orange County. Senator David Min introduced the bill and claims, “The aging infrastructure of these offshore platforms means they are ticking time bombs. Another oil spill — and all of the associated environmental and economic damage — is inevitable unless we act now.”

Kern County at Odds with Environmental Groups and the Law

80% of California’s oil comes from Kern County, affording the area a level of autonomy not seen in other Cali basins. In 2015, county officials used an environmental study to approve tens of thousands of wells over a 25-year period. Courts ended up siding with environmentalists who claimed this was a gross misuse of a single study and that more research was needed. Kern county wrote a new ordinance, but that too is being challenged in court by environmentalists who now want CalGEM to have a more active role in working with the county to approve wells on a case-by-case basis. Environmental groups claim CalGEM’s hands-off approach just avoids claiming responsibility for any hard feelings from environmentalists or producers in the area.

Rig Count

California Oil Production

California Gas Production

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